A $400 monthly investment paycheque could cover a proper chunk of household life. It could pay a utility bill, help with groceries, or make retirement feel less dependent on the next benefit deposit. Getting there starts with the size of the investment, rather than finding a miraculous dividend. I’d build towards roughly $125,000, using three different businesses as a starting framework.
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The target
The goal is $4,800 a year. At a 4% portfolio yield, dividing $4,800 by 0.04 gives $120,000. I’d allow a little more capital because real share prices don’t fit a spreadsheet perfectly, and I don’t want every dollar of expected income already promised to a bill.
A Tax-Free Savings Account (TFSA) can generally shelter the income and withdrawals from Canadian tax. Deposits must fit personal contribution room, including unused room carried forward. A $125,000 account can include years of growth. It doesn’t give everyone permission to deposit $125,000 today.
Give each business a job
Scotiabank (TSX: BNS) supplies banking income from lending, wealth management, and other financial services. Its latest third-quarter adjusted earnings of $2.28 per share covered the $1.14 quarterly dividend twice. Keeping roughly half those adjusted earnings gives the bank resources to absorb loan losses and support growth.
Fortis (TSX: FTS) adds regulated electricity and gas operations. Its new five-year investment plan supports assets that can earn through customer rates, while management extended annual dividend-growth guidance of 4% to 6% through 2031. For this plan, that’s a route towards future raises, with construction costs and regulatory decisions setting the pace.
Choice Properties (TSX: CHP.UN) adds an actual monthly distribution from commercial property, including grocery-anchored locations. I’d give it a smaller role in a broader portfolio. Its second-quarter adjusted property cash-earnings payout was about 90%, leaving less breathing room than the headline monthly schedule might suggest.
The purchases
Here’s an equal-budget allocation of about $41,667 per holding, using recent closes. Shares and units are rounded down, fees are excluded, and income assumes the latest payments continue.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| BNS | $134.50 | 309 | $4.56 | $1,409.04 | Quarterly | $41,560.50 |
| FTS | $85.03 | 490 | $2.66 | $1,303.40 | Quarterly | $41,664.70 |
| CHP.UN | $15.26 | 2,730 | $0.78 | $2,129.40 | Monthly | $41,659.80 |
| TOTAL | 3,529 | $4,841.84 | $124,885.00 |
The $4,841.84 annual total averages $403.49 monthly, with $115 unspent. Only Choice pays monthly. I’d gather the quarterly bank and utility payments in cash, then make a regular household transfer. The calendar becomes manageable without choosing stocks purely for their payment dates.
Build before spending
Starting with $10,000 and adding $500 at each month-end reaches about $125,000 in roughly 12 years at an assumed 6% annual total return. A 4% return takes roughly 14 years. Contributions do much of the early work, while reinvestment gradually adds more ownership.
Fortis reports a 10% annualized total shareholder return over the decade through September 30, 2026. That’s company history, not this portfolio’s record. I’d use the slower planning rates above. Total returns already include reinvested dividends, so adding the yield again would count the same money twice.
Dividend cuts, refinancing costs, and weaker lending can change the outcome. I’d review the businesses annually and increase contributions when affordable. Inflation also means that $400 will buy less in a decade, giving rising income a job beyond simply making the statement look better.
Bottom line
I’d start building this dividend portfolio with the income reinvested and a cash reserve elsewhere. Reaching the target inside a TFSA takes room, capital, and time. The reward is a payment supported by several businesses, with future contributions and dividend growth helping it take on more of the household budget.
