The goal of establishing a monthly income flow is a dream that all investors share. What new investors may not realize, though, is how easy it is to build out that income stream.
Here’s a blueprint for a juicy income stream, all with $20,000.
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Start here for monthly income
The first stock as part of my blueprint for a monthly income stream is Exchange Income Corporation (TSX: EIF). Exchange is an acquisition-focused company that owns over a dozen subsidiaries.
Those subsidiaries are broadly classified into manufacturing and aviation and aerospace companies. Across that clear categorization is something in common. Both segments provide increasingly necessary services to niche markets.
More specifically, the subsidiaries generate cash by offering products and services to niche verticals where there is limited, if any, competition.
This includes flight schools, medevac, and regional airlines servicing Canada’s remote north on the aviation side. On the manufacturing side, cell tower fabrication and custom manufacturing services for the defence sector are prime examples.
The subsidiaries generate cash for Exchange, which in turn allows the company to invest in growth and pay out a handsome dividend.
As of the time of writing, Exchange’s monthly dividend offers a yield of 3.8%. Prospective investors should also note that Exchange has an established history of providing near annual bumps to that dividend going back almost two decades. This makes it one of the best monthly dividend stocks on the market.
Given the initial $20,000, an allocation of $8,000 towards Exchange will provide nearly $300 in income.
Do you want to be a landlord?
When mentioning monthly income, it’s hard not to think about becoming a landlord. Owning a rental property has been viewed as the tried and true way for building a monthly income stream for decades.
Unfortunately, rising home prices, surging downpayments, and interest rates have priced out many investors from the market. That’s where the appeal of RioCan Real Estate (TSX: REI.UN) comes into focus.
RioCan is one of the largest Canadian REITs. The REIT has a diverse portfolio of commercial retail and mixed-use residential properties.
The properties are located primarily in Canada’s major metro markets, where demand remains strong. For investors, RioCan is a way to establish a diversified monthly income stream.
RioCan offers a monthly distribution that pays out a generous yield of 6.1%. Investing $7,000 of that initial $20,000 investment will generate an income of just shy of $430.
Wrap it up with a highly defensive pick
One final option for those investors seeking a monthly income to consider is Slate Grocery REIT (TSX: SGR.UN). Slate is a grocery-anchored REIT. More specifically, Slate’s portfolio is focused on U.S.-based grocery-anchored properties.
This makes the stock an incredibly defensive pick owing to the sheer necessity those properties provide. Collectively, Slate’s portfolio consists of US$2.4 billion worth of real estate infrastructure across major U.S. metro markets.
Turning to income, Slate really shines. The REIT offers a tasty monthly distribution that pays out an impressive 8.2% yield. This makes it one of the highest-paying income stocks on the market.
Allocating the last $5,000 of our initial $20,000 to a Slate investment translates into just over $400 in income that can augment any portfolio focused on generating monthly income.
Final thoughts: A juicy monthly income stream is possible
Investing in the trio of stocks mentioned above can provide a generous income of over $1,000. Here’s how that investment pans out:
| Company | Recent Price | Amount Invested | No. of Shares | Dividend | Total Payment | Frequency |
| Exchange Income Corporation | $70.31 | $8,000 | 113 | $2.64 | $298.32 | Monthly |
| RioCan Real Estate | $18.94 | $7,000 | 369 | $1.16 | $428.04 | Monthly |
| Slate Grocery REIT | $14.51 | $5,000 | 344 | $1.19 | $409.36 | Monthly |
That works out to nearly $95 per month across all three stocks. Not only is that income diversified, but each of those investments boasts some defensive appeal.
Here’s the real kicker. Investors who don’t have that full $20,000 to invest yet can opt to reinvest that income, allowing it to grow over time.
In my opinion, all three of the above stocks are stellar picks for income-seeking investors.
