How I’d Use $7,000 to Build a Monthly Income Fortress in My TFSA

The TFSA (Tax-Free Savings Account) is a wonderful place to invest for passive income. You don’t pay any tax on the income you earn inside a TFSA. Every dividend that hits the account stays in the account.

The TFSA contribution limit increased by $7,000 in 2025. While it is not a huge amount of cash, you can turn it into a reasonable passive-income stream. That is especially true if you reinvest your dividend proceeds into buying more dividend-yielding stocks.

You can earn a compounding stream of income, even with a small starting amount. If you are looking for monthly income in your TFSA, here are three stocks to split the $7,000 contribution three ways. You could earn as much as $36 per month or $432 annually!

Dream Industrial REIT: A safe way to earn monthly income

Dream Industrial REIT (TSX: DIR.UN) is one of Canada’s largest industrial property owners. It operates urban-focused, multi-tenanted properties in Canada and Europe. These properties are located close to crucial economic regions. Consequently, they enjoy 95% occupancy and prospects for high single-digit rental rate growth.

Right now, the real estate investment trust (REIT) is extremely cheap. It trades at a near 35% discount to its net asset value (like private market value after factoring in the REIT’s debt). You are buying its quality assets for 65 cents on the dollar.

This dividend stock earns a 6.4% distribution yield. Its payout ratio is below 70%, so its distribution is quite safe. A $2,333 investment in Dream would earn $12.37 per month of tax-free income in a TFSA. That equates to $148.40 per year.

Mullen Group: A stock for value, income, and longer-term growth

If you want to take on a little more risk for a higher dividend, you could look at Mullen Group (TSX: MTL). It is one of Canada’s largest logistics and transportation companies.

The company has been a great dividend stock. It has grown by acquiring other smaller transport providers. As its cash flows have increased, so too have its dividends. Since 2020, its dividend per share has increased by a 23% compounded annual growth rate.

Mullen is facing a downturn in the transport industry in North America. Consequently, earnings per share have recently pulled back. Its stock is down 2% this year.

However, with a 5.9% dividend yield and a modest price-to-earnings ratio (below 11), the stock could be attractive for a contrarian investor. A $2,333 investment in Mullen Group would earn $11.48 monthly or $137.76 annualized.

Pizza Pizza: A steady play for monthly dividends

Another stock for monthly income in your TFSA is Pizza Pizza Royalty (TSX: PZA). Pizza Pizza and Pizza 73 have over 750 take-out locations across the country. It may not be the healthiest or the best-tasting pizza, but it is affordable and readily available across the country.

Weekly or monthly pizza is a staple in almost every family’s food basket. As a result, it is a relatively resilient business. Since Pizza Pizza is a royalty company, it carries no operating risk and just collects a royalty from the sales of the franchises it licenses out. It generates a lot of cash flow, which is largely put into its monthly dividend.

This is a low-growth business. However, if you just want monthly income, it is a safe bet. It yields 6.3%. A $2,333 investment would earn $12.17 monthly, or $146 annualized.

Prices as of May 28, 2025.