How to Grow $10K Into a Lifetime of Passive Income

Growing $10K into a lifetime of passive income may sound ambitious, but with the right strategy and patience, it’s entirely achievable. The idea is to focus on dividend growth stocks. These are TSX stocks that pay dividends and consistently increase them. Moreover, reinvesting dividends allows you to buy more shares, which then generate more dividends, and so on. Over the years, reinvesting even modest dividends can multiply your wealth dramatically, thanks to the power of compound interest.

Against this background, here are two fundamentally strong dividend growth stocks that can help generate a lifetime of passive income.

Enbridge stock

For investors seeking to generate a lifetime of passive income, they could consider Enbridge (TSX:ENB), one of the top dividend growth stocks. This leading energy infrastructure company generates stable cash flows regardless of economic or commodity cycles. Its long-term contracts, regulated tolling systems, and low-risk commercial agreements provide predictability to its earnings and add resilience.

Since going public in 1953, Enbridge has consistently paid dividends. Moreover, in December 2024, it raised its quarterly payout by 3% to $0.9425 per share, marking its 30th consecutive annual increase. Over the past five years, Enbridge has returned $35 billion to shareholders and plans to return $40–$45 billion more over the next five, supported by its strategy of utility-like growth, low-cost expansion opportunities, and operational efficiency through automation and scale.

Enbridge’s future payouts will be supported by its highly diversified and low-risk business model. With over 200 asset streams, including three recently acquired premier U.S. gas utilities, it generates high-quality, recurring cash flows from a wide range of sources. More than 98% of its earnings before interest, taxes, depreciation, and amortisation (EBITDA) is protected by regulated or take-or-pay contracts, shielding it from market volatility. Plus, over 80% of its earnings have built-in inflation protection, further bolstering financial stability.

The energy infrastructure company’s demand-driven assets are projected to witness high utilization despite global trade tensions, with minimal exposure to commodity prices and tariffs. Further, its strong balance sheet, high-quality customer base, and focus on reducing debt positions it well to pay and increase dividends in the years to come.

Telus stock

Telus (TSX:T) is another attractive stock to buy and hold for a lifetime of passive income. This Canadian telecom giant has returned over $21 billion to shareholders in dividends since 2004. Further, it raised its dividend 27 times in the past 14 years. This reflects its ability to grow its earnings year after year and commitment to enhancing its shareholder value.

Currently offering a high yield of around 7.4%, Telus supports these payouts with a sustainable free cash flow payout ratio of 60–75%. Its ability to maintain and grow dividends is backed by solid operational performance and long-term growth investments. The company continues to expand its fibre and 5G networks, which translates into steady subscriber gains and earnings growth. In Q1 2025, Telus added 218,000 new customers, while postpaid churn remains under 1%, which is a sign of strong customer loyalty.

Beyond telecom, Telus is tapping into growth areas like the Internet of Things (IoT), while also streamlining operations and expanding sales channels. This multifaceted strategy is driving steady earnings growth and dividend payouts.

With capital expenditures expected to taper off and earnings likely to rise in the coming years, Telus is well-positioned to continue to pay and increase its dividend. Telus is targeting annual dividend increases of 3% to 8% through 2028, making it a reliable passive income stock.

The bottom line

For investors looking to build a reliable source of passive income that lasts a lifetime, Enbridge and Telus make a compelling pair. These TSX-listed companies are known for their consistent dividend payouts and growth, attractive yields, and the kind of stability that appeals to long-term income seekers.

A $10,000 investment, split evenly between Enbridge and Telus, can generate around $670.72 in annual passive income. That income can then be reinvested to boost future returns, helping investors steadily grow their wealth over time.