How I’d Secure $150 Monthly Dividends With a $25,000 Investment

Having just one income stream is never going to be enough if you want to have a good retirement. A strong retirement plan requires creating more income streams that can support your ongoing expenses and contribute to savings for a nest egg. Canadians have plenty of ways to earn passive income, and they can make it tax-free with the right discipline and smart choices.

Here’s how I would secure over $150 in monthly dividend income with a hypothetical $25,000 investment in two TSX dividend stocks held in a Tax-Free Savings Account (TFSA).

SmartCentres REIT

SmartCentres REIT (TSX:SRU.UN) is a way for you to invest in real estate and earn a monthly income without the cash outlay or responsibilities of being a landlord. SRU.UN is a real estate investment trust (REIT). REITs are companies that pool money from shareholders and invest it into a portfolio of real estate assets, manage it for them, and generate recurring revenue. A REIT pays out money to investors based on the number of “shares” they hold on a monthly schedule.

SmartCentres REIT is a fully integrated commercial and residential REIT with a portfolio of properties throughout the country. While most of its revenue comes from tenants in retail, it is repurposing some of its land to include various other types of development to diversify revenue streams. As of this writing, SRU.UN trades for $25.52 per share and boasts a juicy 7.25% dividend yield.

Telus

Telus Corp. (TSX:T) can be an excellent defensive pick to consider for your self-directed portfolio for passive income. Telus is a $33.51 billion market capitalization telecom company. It is one of Canada’s Big Three wireless providers and holds around a third of the market share. Internet and wireless services have become increasingly essential in the last few decades, making Telus a defensive business.

As of this writing, Telus stock trades for $22.28 per share and boasts a juicy 7.47% dividend yield. Its high-yielding dividends make it more attractive than its peers in the telecom sector. Telus stock also boasts a dividend growth streak spanning two decades, an excellent reason for investors to add it to their holdings for passive income in a TFSA.

Foolish takeaway

It’s never a good idea to put all your eggs in one or two baskets when investing in the stock market. Instead, it’s important to create a diversified portfolio of dividend stocks you can rely on to generate passive income. The table below is an example of how a $25,000 investment split evenly across SmartCentres REIT and Telus stock could provide you with over $150 in tax-free monthly dividend income inside a TFSA.