Establishing a $200 monthly income (or even more) is a great milestone for new and existing investors to target in a portfolio. Incredibly, it’s not only possible to do, but it can be done with a $7,000 investment to start.
Here’s how I would look to build out that $200 monthly income stream starting with just $7,000.
Start with a defensive pick
Canada’s telecoms are among some of the most defensive picks on the market. That defensive appeal comes thanks to the stable business models they adhere to.
In fact, in the years since the pandemic, that appeal has only grown, particularly for wireless and internet users. One telecom investors looking to establish a $200 monthly income from should consider now is Telus (TSX:T).
Among its peers, Telus is one of the most lucrative options to consider when it comes to generating an income. As of the time of writing, Telus offers an insane 7.7% yield through its quarterly dividend. The telecom has also provided investors with handsome annual or better upticks to that dividend going back two decades.
That fact alone makes Telus one of the key components in any portfolio to establish a $200 monthly income stream.
Throw in a big bank with a bigger income
Canada’s big banks are among the best long-term options on the market for investors. That’s because they boast a stable domestic market at home, an expanding presence abroad, and pay a juicy quarterly dividend.
The big bank for investors seeking that $200 monthly income is Bank of Nova Scotia (TSX:BNS). Scotiabank is known as Canada’s most international bank, with an impressive presence in a host of countries.
Over the past several years, Scotiabank’s growth focus has shifted away from certain Latin American markets to focus on the U.S., Canadian, and Mexican markets.
This lowers the overall risk that Scotiabank is exposed to, while also aligning its growth policy with its peers.
Turning to income, Scotiabank really impresses. The company has been paying out an appetizing quarterly dividend for nearly two centuries without fail. As of the time of writing, the dividend on that yield works out to an impressive 6.1%.
How about investing in a REIT?
Finally, let’s diversify that mix some more by adding SmartCentres REIT (TSX:SRU.UN). SmartCentres is one of the largest REITs in Canada, boasting a portfolio of nearly 200 properties across the country.
Those properties are primarily retail-focused, but like some of its peers, SmartCentres is repurposing some of its land to include other types of developments. That list includes residential, office and even self-storage developments.
This provides an element of diversification for the REIT that can bolster its already impressive growth and occupancy levels further.
In terms of a distribution, SmartCentres pays out an appetizing 7.2% yield. That places the REIT along with Telus as some of the top-paying income investments on the market.
It also makes SmartCentres a perfect fit for investors seeking a $200 monthly income.
Can you generate a $200 monthly income?
Telus, SmartCentres, and Scotiabank can provide reliable, growing dividends for any portfolio. Here’s how a total $7,000 investment across all three of those stocks can be allocated:
| Company | Recent Price | Total investment | No. Of shares | Dividend | Total Payout | Frequency |
| Telus | $22.20 | $3,000 | 135 | $1.61 | $217.35 | Quarterly |
| Bank of Nova Scotia | $69.97 | $2,000 | 28 | $4.24 | $118.72 | Quarterly |
| SmartCentres | $25.41 | $2,000 | 78 | $1.85 | $144.30 | Monthly |
Those investments work out to a solid $480 income, which is just shy of a 7% return (yet still far from the $2,400 needed to get to the $200 per month noted).
To accomplish that $200 goal, investors need to do one simple thing – nothing!
That’s right! This is a buy-and-forget option. Reinvesting those dividends over a longer term will not only meet that $200 monthly income threshold, but far surpass it.
In fact, it would take approximately 15 years to surpass $200 per month, assuming some dividend growth. Over that same period, the value of those three investments would surge to well over $25,000 thanks to those reinvestments.
In my opinion, one or all of the above stocks would be a great addition to any well-diversified portfolio.
Buy them, hold them, and watch your future income grow.
