Investing $1,500 every month is a strategy that can completely transform your financial future. The beauty of consistent investing lies in its ability to harness the power of compounding. Essentially, the returns you earn on your investments begin to generate their own returns, and over time, this exponential growth turns regular contributions into a significant source of wealth. By steadily contributing month after month, you’re setting up a snowball effect whereby your passive income potential grows larger with each year., eventually providing a substantial flow of income from dividends and returns. Here’s how to start.
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Go easy with goeasy
When it comes to picking the right investments to maximize this strategy, goeasy (TSX:GSY) on the TSX stands out as a phenomenal option. Goeasy operates as a non-prime financial services company, offering leasing and lending solutions to individuals who don’t meet traditional borrowing criteria. Through its brands, such as easyfinancial and easyhome, the dividend stock has built a strong reputation as a market leader in non-prime consumer credit.
In its most recent third-quarter earnings for 2024, goeasy demonstrated why it remains a favourite among Canadian investors. The dividend stock reported record-breaking loan originations of $839 million, which represents a 16% increase compared to the same period last year. This contributed to total revenue for the quarter of $383 million, showcasing the resilience of its business model even amid a more challenging economic environment. The dividend stock’s quarterly earnings per share (EPS) also surged by over 28% year-over-year, reflecting goeasy’s ability to effectively manage costs and expand its profitability.
What makes goeasy even more exciting for long-term investors is its consistent track record of growth. Over the past several years, goeasy has achieved annualized revenue increases, with 2023 showing a 17.2% jump in revenue compared to the prior year. Its earnings growth is even more striking, with a 69.3% increase in 2023 compared to 2022. This combination of steady growth and profitability has made it a darling of dividend and growth-focused investors alike.
Future outlook
Looking ahead, the future for goeasy appears incredibly promising. Analysts project that the dividend stock’s gross consumer loans receivable could soar to between $4.7 billion and $5 billion by the end of 2025. Total revenue for the same year is forecasted to range from $1.6 billion to $1.7 billion, signaling continued strong growth potential.
Another reason why goeasy is such an attractive option is its generous dividend policy. The dividend stock offers an annual dividend of $4.68 per share, yielding approximately 2.7% based on current stock prices. What’s particularly notable is its payout ratio of just 27.3%. This means the dividend stock has plenty of room to increase dividends in the future while continuing to reinvest in its growth. If you invested $1,500 each month, that would total $18,000. Here’s how much then you could earn in returns and dividends, if shares climb by another 11%.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
| GSY – now | $173 | 104 | $4.68 | $486.72 | quarterly | $18,000 |
| GSY – 11% | $192 | 104 | $4.68 | $486.72 | quarterly | $19,968 |
Bottom line
By consistently investing $1,500 each month into strong-performing stocks like goeasy, you could therefore earn $486.72 in dividends and $1,968 in returns! That’s a total of $2,454.72 in passive income, thus building a powerful engine for generating passive income. This approach not only ensures you’re continuously growing your wealth but also takes advantage of dollar-cost averaging, which reduces the impact of market volatility. Over time, the dividends you earn from your shares can be reinvested, further accelerating the compounding process.
