Creating a growing stream of monthly income with just $7,000 may sound like a stretch, but it’s not out of reach. With a bit of patience, strategic stock selection, and a focus on dividend-paying investments, it’s entirely possible to generate reliable passive income, especially if you prioritize monthly payers on the TSX. One of the top options right now is Chartwell Retirement Residences (TSX:CSH.UN), which offers both income and exposure to a growing demographic trend.
Creating cash flow
The first step in transforming a lump sum into a cash stream is understanding how dividend investing works. When you buy shares in a company that pays dividends, you earn a portion of the profits regularly. If the dividend is monthly, it becomes a dependable source of income. The real benefit shows up when you reinvest those dividends. Over time, this compounding effect boosts your investment, increasing your monthly payouts along the way.
Now let’s look at how that applies to $7,000. To make monthly income work, you’ll want to focus on a stock that pays dividends every month rather than quarterly. Monthly dividends help smooth your cash flow and mimic a paycheque, making these ideal for anyone seeking passive income. You’ll also want a company that’s stable, ideally in a recession-resistant sector with consistent revenue. This is where Chartwell Retirement Residences becomes a front-runner.
Why Chartwell
Chartwell is the largest operator of retirement homes in Canada. It owns and manages over 160 residences, offering independent living, assisted living, and memory care services. These are essential services for an aging population, and Canada’s seniors’ demographic is growing fast. According to Statistics Canada, the number of Canadians aged 85 and over is projected to triple over the next 25 years. This demographic shift supports long-term demand for Chartwell’s residences and services.
From a financial standpoint, Chartwell has been steadily recovering post-pandemic. In its latest earnings report for Q1 2025, the company posted revenue of $252.9 million, up from $196.6 million in Q1 2024. It also swung from a net loss of $2 million last year to a net income of $33.2 million. This turnaround signals improved occupancy rates and cost management, both of which are critical to sustaining and growing dividends.
Dividend growth
Chartwell currently trades at around $18 as of writing. Its monthly dividend stands at $0.051 per share, or $0.612 annually. That works out to a dividend yield of roughly 3.4%. It’s not the highest yield on the TSX, but it’s solid and backed by an essential service. What’s more compelling is the potential for dividend growth. As occupancy improves and revenue grows, Chartwell could choose to increase its dividend. Even small hikes over time, when reinvested, can significantly boost your total return. That’s where the growth aspect of your monthly cash stream kicks in. A consistent reinvestment plan allows your number of shares to grow, which in turn grows your monthly dividend payment.
Of course, there are risks. The healthcare and real estate sectors can face regulatory changes, labour cost increases, and inflationary pressure on operations. But Chartwell has weathered these before and continues to adapt. Its focus on long-term care and senior services makes it less vulnerable to economic cycles than more cyclical REITs or traditional retailers.
Bottom line
If you’re planning to use dividends as part of your retirement income or to cover regular bills, Chartwell offers a reliable starting point. The key is consistency. Start with a manageable amount like $7,000, reinvest the dividends, and keep an eye on performance. As your cash stream grows, you can consider adding similar monthly dividend stocks for further diversification.
In the long run, building a stream of monthly income is less about how much you start with and more about how consistently you grow it. With steady REITs like Chartwell and a long-term view, that modest $7,000 can lay the foundation for an income stream that keeps building year after year, without needing to touch the principal.
