How to Structure a $50,000 TFSA for Practically Constant Income

If you want to earn passive income, you might as well be investing that inside your Tax-Free Savings Account (TFSA). All income earned inside the TFSA is safe from tax, as are all withdrawals from the account.

Using your TFSA is one of the easiest ways to quickly bolster your investment cash returns. If I had $50,000 and was looking to build a TFSA portfolio that generates steady income, here are four stocks I would happily own.

Choice Properties

Real estate is a great place to earn monthly dividends. Choice Properties Real Estate Investment Trust (TSX: CHP.UN) is Canada’s largest REIT. It owns grocery-anchored retail, industrial, and mix-used properties across Canada.

Its anchor tenant happens to be Canada’s largest grocery brand, so that provides a great solid base of growing rents. It just announced plans to acquire First Capital REIT, which would increase its location quality, tenant mix, and rental rate growth potential.

Choice Properties yields 5% right now. If you put $12,500 to work in Choice Properties, you would earn $52.13 monthly, or $625.56 annualized.

Pembina Pipeline: A solid TFSA income stock

Pembina Pipeline (TSX: PPL) is another bet for regular TFSA income. This is one of Western Canada’s largest pipeline and midstream players.

Over 85% of its business is contracted. That income widely supports its dividend. It tends to do well when energy prices are elevated because it earns a spread through its marketing business. The company has some very attractive growth opportunities such as LNG export terminals and AI power projects.

It yields 4.6% now. A $12,500 TFSA investment in Pembina would earn $146.26 quarterly, or $585.04 annualized.

Topaz Energy

Topaz Energy (TSX: TPZ) is another attractive TFSA stock. It is a unique business because it is a mix of energy royalties and infrastructure assets.

It’s a way to get exposure to the general energy industry, but with less commodity risk. The company has executed very well over its seven-year history. Its stock is up 111% in the past five years. The energy producer just announced strong first quarter results due to growing royalty production. It announced its 10^th consecutive dividend increase since inception.

TPZ stock yields 4.5% now. If you invested $12,500 of TFSA cash in Topaz now, you would earn $140 quarterly or $560 annualized.

Mullen Group: A TFSA stock for growth and income

A final stock to wrap up a TFSA income portfolio is Mullen Group (TSX: MTL). This is a way to get exposure to the freight and industrial recovery in North America.

Even in a tough environment, Mullen has focused on its best margin operations and delivering good service. It has paid off in solid results. MTL stock has outperformed the broader transport sector. Smart acquisitions continue to pay off in expanding its markets and diversifying its service offering.

Mullen stock yields 3.9%. A $12,500 TFSA investment would earn $41.51 monthly, or $498.12 annualized.  

The Foolish takeaway

Each of these stocks has decent growth prospects, attractive yields, and a record of growing their dividends. This diversified $50,000 TFSA portfolio would earn a combined $2,268.72 annually or $189.06 averaged monthly. All those earnings inside a TFSA are tax-free. If not withdrawn, that income can compound tax-free for years.