There is a misconception that there are no fixed returns in the stock market. By investing in high-quality dividend stocks that give at least a 6% dividend yield, you can start earning $300 a month from the next quarter. While your end goal is clear, the next figure you need to complete the equation is when you want to start earning this $300 and how much you can invest at the moment. Once you have these two figures, we can work around various permutations and combinations to achieve our $300/month goal.
Dividend stocks that can give you up to 6% average yield
If you want to start earning $300 as soon as possible, you need to invest $60,000 in stocks that can give you a 6% dividend yield. Now is a ripe time, as many dividend stocks are trading at their lows as interest rate hikes have made their balance sheet debt expensive.
TC Energy
Oil and gas pipeline operatorTC Energy’s(TSX:TRP) stock is under pressure because of a lawsuit and an over-budget pipeline. But the company has several income-generating pipeline projects that make up for any weak projects. TC Energy could grow its distributable cash flow in the coming years as its gas pipelines become operational. These pipelines will open Canada’s liquefied natural gas (LNG) reserves for export in Europe and Asia.
Invest in more than two stocks
While TC Energy is a good stock, it carries energy infrastructure risks, like delays in project approval and fluctuation in oil and gas prices. Thus, it is better to diversify your investment in other sectors that are unaffected by the factors which affect TC Energy.
ADVERTIsem*nT
A good dividend income stock isCT REIT(TSX:CRT.UN). It enjoys the status of a trust, as well as Canadian Tire. So Canadian Tire outsources the development and maintenance of its stores to CT REIT and even pays rent at a 1.5% lease appreciation per year. The REIT doesn’t have to look for a tenant. It already has 100% occupancy before developing a project. As CT REIT is a trust, it distributes a major portion of its rental and sales income to shareholders to enjoy its no-tax benefit. It is the only REIT that grows its distribution by more than 3% annually.
Another good stock for diversification isPower Corporation of Canada(TSX:POW). POW is a financial services holding company with insurance, wealth management, real estate investment, and private equity businesses in its portfolio. All these firms perform differently in different market situations, balancing each other’s weaknesses and strengths. POW gets dividends from its asset holdings, which it passes on to its shareholders.
Like the above two stocks, POW increases dividends annually at an average rate of 7%. However, it paused dividend growth for six years after the 2008 Financial crisis affected all financial services.
How much money do you need to invest to make $300 a month?
If you are looking to earn $300 per month from next quarter onwards, you can invest up to $60,000 in the above three stocks in the following order.
Stock Ticker
Investment
Share Price
Dividend per Share
Share Count
Dividend Income
TRP
$30,000
$52.23
$3.72
574
$2,135.28
CRT.UN
$15,000
$15.56
$0.90
964
$865.86
POW
$15,000
$37.69
$2.10
398
$835.80
Total
$3,836.94
TC Energy stock is trading below $53. If you invest $30,000 in it now, you can buy 574 shares and lock in a 7.1% yield. With a $3.72 annual dividend per share, your dividend income could come to $2,135/year ($177.94/month) from this stock alone. Similarly, a $15,000 investment in the remaining two stocks can give you a cumulative dividend income of $1,701/year or $141.8/month. Your average yield from the three stocks comes to 6.3%. And this income will keep growing as all three stocks have a record of growing dividends.
But if you don’t have $60,000, you can invest $4,000 annually for the next 15 years and accumulate shares of the above stocks. If you are using this method, try to buy stocks when they are at their 52-week low to lock in a higher yield.
Before you consider Ct Real Estate Investment Trust, you'll want to hear this.
Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in July 2023... and Ct Real Estate Investment Trust wasn't on the list.
The online investing service they've run for nearly a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 29 percentage points. And right now, they think there are 5 stocks that are better buys.
Fool contributorPuja Tayalhas no position in any of the stocks mentioned.The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
If you're looking to generate $300 in super-safe monthly dividend income, simply invest $32,000 (split equally, three ways) into the following three ultra-high-yield stocks, which are averaging an 11.28% yield.
Those who are able to save a significant amount beyond their retirement account contributions may be able to generate $200 monthly in interest. “If you have $50,000 in a high-yield savings account offering 5% APY, that's $200 a month right there,” Henry says.
To generate $500 a month in passive income you may need to invest between $83,333 and $250,000, depending on the asset and investment type you select. In addition to yield, you'll want to consider safety, liquidity and convenience when selecting the investments you'll employ to provide monthly passive income.
In the US, the only people for whom a salary of $300 per month would be enough would be kids living with their parents who don't have to pay for their own car, food, shelter, or clothes.
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
For example, if you are able to commit to investing $500 a month in an S&P 500 index fund like the Vanguard 500 Fund (NYSEMKT: VOO), you'll eventually have $1 million, and that includes paying the 0.03% expense ratio in the ETF, meaning you'll pay 3 cents each year for every $100 you have invested in the index fund.
Investing $1,000 a month for 20 years would leave you with around $687,306. The specific amount you end up with depends on your returns -- the S&P 500 has averaged 10% returns over the last 50 years. The more you invest (and the earlier), the more you can take advantage of compound growth.
Assuming that you can earn this 10% average return over your investing career, if you are getting started investing this year and you want to become a millionaire in 30 years, you would need to invest $506.60 per month. This amount may seem like a lot, but it may actually be pretty doable for many people.
Historically, a diversified stock portfolio has earned an average of 10%. But even if you only got 7%, by investing $400 a month for 40 years, you'd have over $1 million to spend in retirement. A good rule of thumb is to invest a minimum of 10% to 15% of your gross income for retirement.
Investing a measly $100 per week can turn into a nest egg topping $1.1M by retirement — but you need to start at age 25. Here are 5 easy 'catch-up' tactics for older Americans. The earlier you start saving for retirement, the better your chances of building a comfortable nest egg.
Jobs that can pay $300 per day include rideshare driving, on-demand food and grocery delivery, freelance writing, graphic design, programming and software development, moving help, event DJing, yard sale and estate sale flipping, handyman tasks, focus group participation, donating plasma multiple times in one day, ...
But even at 9.5%, we're talking about a middle-class income of $4,000 per month on an investment of just a touch over $500K. Below, I'll reveal how to start building a portfolio that could get you an even bigger income stream than this today.
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