How You Can Earn $100/Week in TFSA Passive Income — Today!

Turn your TFSA into a passive income machine with Telus (TSX:T)(NYSE:TU) and NorthWest Healthcare Properties REIT (TSX:NWH.UN).

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Many investors have the same dream. They want to turn their Tax-Free Savings Accounts (TFSAs) into long-term passive income machines that will generate enough to ensure a prosperous retirement.

This is a future strategy, of course. It’ll take decades of compounding for your TFSA to pass the million-dollar mark, but it’s certainly possible if you invest smartly, save regularly, and make sure you’re not robbing the account to help pay for life’s little emergencies.

At that point, turning your TFSA into a passive income machine is easy. You simply invest it in a portfolio that yields 4% and withdraw the income every year. A $1 million TFSA will generate $40,000 in annual income at a 4% yield. That might not be enough to retire on a few decades from now, but it’ll still be a great start.

Some folks aren’t that patient, however. They need to use their TFSAs to generate passive income today. Although they won’t be able to generate enough to retire on today, they can still use their TFSAs to have a nice income stream.

Here’s how you can use your TFSA to make $100/week in sweet passive income.

The easy way

Some people have been saving in their TFSAs for years now, diligently putting the maximum aside since 2009. Many of these TFSAs are now worth $100,000 — or more.

This makes earning a decent amount of passive income from the account relatively easy. If you have $100,000 in your TFSA, then you only need to earn a 5.2% yield to turn that capital into a $100/week passive income stream.

One stock that would fit well in that portfolio would be Telus (TSX:T)(NYSE:TU), the telecommunications giant that has been a dividend growth stud over the last decade or so. Telus features a fantastic moat, the ability to raise prices over time, and growth potential as it rolls out its ultra-fast 5G network over the next couple of years.

Telus shares currently yield a hair over 5%, which fits in really well with the yield needed. The dividend should continue to creep up over time too, which is will help ensure this passive income stream keeps up with inflation over the long haul. The payout is sustainable too, even if the COVID-19 slowdown lasts for years.

The harder way

I won’t sugarcoat it. If you’re starting your journey today and you haven’t yet invested in a TFSA it’s going to be harder to generate $100 per week in passive income. You’ll need to get significantly more yield, which means your stocks are more likely to cut their dividends.

In order to generate $100 per week in passive income from a freshly invested TFSA worth $69,500, you’ll need a 7.5% yield. That’s a high yield, especially in today’s world of low interest rates.

But it certainly isn’t impossible to get that kind of sustainable dividend. Many of Canada’s top REITs, for instance, offer payouts that high. One of my favourites today is NorthWest Healthcare Properties REIT (TSX:NWH.UN), which owns health-related real estate across Canada, Europe, Brazil, Australia, and New Zealand.

NorthWest’s portfolio includes medical office buildings, hospitals, clinics, seniors living buildings, and long-term care facilities. Some of these assets have been impacted by COVID-19 and its impact on the health care sector, but over the long term this real estate should perform just fine.

Meanwhile, investors get to pick up shares at a bargain. In 2019, this REIT generated $0.92 per share in adjusted funds from operations, a number that should slowly go up over time. Shares trade at approximately 11 times this number today, a very attractive valuation. The stock also yields a sustainable 7.5%, making it an excellent choice for TFSA passive income seekers.

The bottom line

Whether you’ve been putting cash aside in your TFSA for years or you’re just starting out today, it’s very possible to generate a decent amount of passive income from your account. While $100 per week might not seem like a life-altering amount of money, every bit helps.

Should you invest $1,000 in Canadian Natural Resources right now?

Before you buy stock in Canadian Natural Resources, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Canadian Natural Resources wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Confidently Navigate Market Volatility: Claim Your Free Report!

Feeling uneasy about the ups and downs of the stock market lately? You’re not alone. At The Motley Fool Canada, we get it — and we’re here to help. We’ve crafted an essential guide designed to help you through these uncertain times: "5-Step Checklist: How to Prepare Your Portfolio for Volatility."

Don't miss out on this opportunity for peace of mind. Just click below to learn how to receive your complimentary report today!

Get Our Free Report Today

More on Dividend Stocks

sale discount best price
Dividend Stocks

This Monthly Dividend Stock at $53 Is Too Cheap to Ignore

There are plenty of great dividend stocks on the market to consider buying, but this monthly gem is just too…

Read more »

ETF stands for Exchange Traded Fund
Dividend Stocks

The Best Canadian ETFs $1,000 Can Buy on the TSX Today

If you're looking for ETFs that can turn $1,000 into strong cash flow, then these are the ones I'd go…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

Where I’d Invest my TFSA Savings in the TSX Today

If you want the stability of defence with the growth from tech, this is the ideal stock.

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How I’d Invest $7,000 in My TFSA to Earn $50 in Monthly Income

High-yield stocks like Freehold Royalties, which is yielding more than 9%, are prime candidates for your TFSA.

Read more »

dividend growth for passive income
Dividend Stocks

4 Canadian Dividend Stocks to Buy and Hold for the Next 20 Years

These dividend stocks can certainly stand the test of time, and have already done so for many investors.

Read more »

Stethoscope with dollar shaped cord
Dividend Stocks

I’d Put My Entire $7,000 TFSA Into This Single Dividend Stock

TFSA investors can consider putting their $7,000 limit into a top-performing TSX stock in 2025.

Read more »

Happy golf player walks the course
Dividend Stocks

How I’d Turn $5,000 Into a Passive Income Stream This Year

These two high yield TSX stocks offer secured payouts, making them top bets to start building a passive income portfolio…

Read more »

four people hold happy emoji masks
Dividend Stocks

2 Oversold TSX Dividend Stocks to Watch in 2025

These industry leaders have great track records of dividend growth.

Read more »