Most investors dream of creating a monthly income stream. Where that dream starts to fade is when new investors think that they need tens of thousands of dollars to make that monthly income stream happen.
Fortunately, that’s not the case. A great monthly income portfolio can be built with $10,000 or even much less with patience and the right picks.
Here’s a look at some of those right stocks for you to consider buying now.
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A diversified pick with nearly two decades of increases
Have you considered Exchange Income Corporation (TSX: EIF) for your portfolio? Although most investors may not be familiar with the company, Exchange excels at creating monthly income.
Exchange is an acquisition-focused company that owns over a dozen subsidiaries. Those subsidiaries are broadly classed into two segments – aviation and manufacturing.
The subsidiaries also have another thing in common. They generate cash for the company while providing a necessary service in underserved markets where there is little, if any, competition.
By way of example, on the aviation side, Exchange owns one of the largest flight schools in Canada. The company also operates airlines that provide cargo and passenger services to Canada’s remote north.
Turning to manufacturing, examples from that segment include custom manufacturing for the defence sector as well as fabricating cell towers.
The stable revenue those segments generate helps Exchange to pay out a dividend, which is a key ingredient for creating monthly income. As of the time of writing, Exchange offers a 3.6% yield.
Another great fact – Exchange has provided annual bumps to that dividend for nearly two decades.
From that initial $10,000 investment, allocating $5,000 to Exchange will provide investors with a healthy start to any long-term portfolio.
Invest in a grocer?
REITs are incredible investments that can provide a supercharged income for any portfolio. Even better, many offer frequent payouts, making that goal of creating a monthly income that much easier.
Slate Grocery REIT (TSX: SGR.UN) is a great example of a REIT that can provide that juicy monthly income. Slate is a U.S.-anchored grocery REIT with approximately 110 properties that are located primarily in metro markets.
Prospective investors should note that grocers are highly defensive businesses.
Many of Slate’s tenants represent some of the largest names in retail, and this provides an additional defensive element to an already impressive moat. Adding to that appeal is the fact that Slate’s properties include the adjoining retailers next to those grocers.
That includes pharmacies, banks, restaurants and smaller retailers, all of which add an element of diversification to an already impressive portfolio.
Perhaps best of all is Slate’s distribution, which is a brilliant means for creating a monthly income. As of the time of writing, that distribution pays out an impressive, if not lucrative, yield of 8.1%.
Allocating $3,000 of our initial $10,000 to Slate will provide an ample starting point for building a portfolio.
Go on – be a landlord
It would be hard, if not impossible, not to mention RioCan Real Estate (TSX: REI.UN) as another option for creating monthly income.
The REIT is focused on commercial retail sites and, more recently, mixed-use residential.
RioCan’s properties are in major metro markets across the country, where higher demand can fetch higher rents.
When considering RioCan, the appealing factors are evident when investors compare owning a REIT against the traditional alternative – owning a rental property.
An investment in RioCan comes without the tenant, maintenance, or tax issues. Instead, investors can collect that monthly distribution, which, as of the time of writing, works out to a tasty 6.2%.
Investing $2,000 of our $10,000 initial investment in RioCan will provide a springboard for further growth.
Creating monthly income is easier than you think
The three stocks mentioned above offer growth, income, and defensive appeal that can provide years of growth to investors.
Even better, that initial $10,000 can be a catalyst for any future income thanks to reinvestments. Here’s how that would pan out:
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| Exchange Income Corporation | $72.62 | 68 | $2.64 | $179.52 | Monthly |
| Slate Grocery REIT | $14.50 | 206 | $1.20 | $247.20 | Monthly |
| RioCan Real Estate | $18.95 | 105 | $1.16 | $121.80 | Monthly |
In total, that works out to be nearly $550 in income from those three monthly payers. And that’s just the beginning.
