A Simple Way to Turn Your $15,000 TFSA Into $1,487 in Annual Passive Income

How much annual passive income can $15,000 produce? A 7% dividend yield can generate $1,050; an 11% yield can generate $1,650. However, the 11% yield might carry risk of dividend cuts. As more Canadians invest in dividend stocks, the opportunity to earn even a 7% yield is slim. However, you need not settle for a 7% yield when you can earn a 10% yield through diversified income sources and lower downside risk. This investing strategy needs a Tax-Free Savings Account (TFSA).

Two TFSA dividend stocks to invest $15,000

The first step is to find high-yield stocks with stable dividends, invest a lump sum in them, and lock in that yield. Note that not all high yields are investment grade, so do your due diligence before investing.

Slate Grocery REIT for high yield

Slate Grocery REIT (TSX:SGR.UN) still has a 7% annual yield. The REIT caters to grocers in the United States, with Walmart and Kroger among its largest tenants. The United States has a limited supply of retail property, which helps existing stores earn a higher yield. Since all of its rent is earned in US dollars, the REIT converts it into Canadian dollars for Canadian investors, giving you exposure to foreign exchange fluctuations.

Slate Grocery REIT has maintained its dividend per share for the last 10 years. However, forex changes increased its dividend income by an average of 2% in the last 12 years and 7% in 2025. The REIT does not offer a dividend reinvestment option. However, this should not stop you from redirecting the dividend to another stock in which the company grows its dividend.

Cogeco Communications for dividend growth and yield

Often, investors seek dividend growth in large companies. But the real growth comes from lower capital expenditures. Cogeco Communications (TSX:CCA) operates a capital-light mobile virtual network operator (MVNO) model, leasing network infrastructure from big telcos. Since its capex requirements are minimal, it has ample space to grow dividends. CCA stock paid only 30% of free cash flow as dividends, giving it a sufficient buffer for any cash flow fluctuations.

Investors should note that Cogeco is not among the largest telcos in Canada, but its relatively smaller operations give it flexibility to grow. It has been expanding its wireless business in the United States and Canada. Even though Cogeco is facing pressure from price competition, it is restructuring and expects a 2–4% dip in fiscal 2026 revenue. This has pulled the stock price down to $61 from its 2022 high of over $100, and it has remained in the $60–$70 range since then.

Cogeco is comfortably growing its dividends by 7–8%, but the growth rate has slowed from 10% until 2024 as it channels money into wireless network expansion.

How to turn $15,000 in a TFSA into $1,487 in annual passive income

Now that you know the fundamentals of the two stocks, the investing strategy is compounding. Consider investing $15,000 in Slate Grocery REIT. It will buy you 1207 units at $12.43 a unit. These units will pay $1,038 in annual dividends, which you can use to buy Cogeco shares.

Assuming an average share price of  $61, you can buy 17 shares of Cogeco annually. Cogeco can grow your dividends. Assuming you buy 17 shares annually and Cogeco grows its dividend by 6% annually, a $449 annual dividend income source will be generated in five years.

After five years, if you stop reinvesting and take payouts, you can earn $1,487 ($1,038 + $449) in annual passive income.