3 Stocks to Make $350/Month With a Fully Stocked TFSA

With the right dividend stocks in your TFSA, you might be able to start a sizeable enough income to take care of certain expenses.

| More on:

A fully stocked TFSA is a powerful financial asset, and unlike an RRSP, its application doesn’t lie years into the future. You can use your TFSA assets whenever you want, and this flexibility, combined with the tax-free nature of whatever growth and income you generate within this account, makes it a perfect resource for starting a passive income.

And you might not even need to use every last dollar in your fully stocked TFSA to start a monthly income as hefty as $350. You will need about $60,000 invested in the right dividend stocks.

A mortgage company

There are only a few big players in the residential mortgage industry in Canada (apart from the big banks), and First National Financial (TSX:FN) is one of them. The company served over 342,000 borrowers in 2020 alone and had about $118 billion worth of mortgages under its administration. These are amazing numbers for a company with a market capitalization of just $2.4 billion.

The company is also an aristocrat and has grown its payouts for nine consecutive years. And endorsing the company’s potential when it comes to dividend sustainability is its payout ratio, which only broke through the 100% mark once since 2012 (in 2015). The current yield is 5.7%, and if you invest $20,000 in this non-bank lender, you can get about $95 a month.

An energy giant and aristocrat

Despite being the largest midstream fossil fuel (oil and gas) operator in the country, the market capitalization of Keyera (TSX:KEY) puts it far below the giants. And that’s not because the company’s current valuation is a mere fraction of what it used to be. The company has suffered from the decline of the energy sector over the years, and it’s reflected in the 42% slump since its peak in 2014, but the decline has been relatively gradual.

The company pays monthly dividends, and even through the tough phase of the pandemic, the company has managed to sustain its payouts. The payout ratio is still dangerously high, but it’s slightly lower than the 2020s, indicating some measure of improvement. The company is offering a juicy 6.8% yield, and if you invest $20,000 of your TFSA capital in this Dividend Aristocrat, you will get an income of about $113 a month.

A generous REIT

REITs usually offer amazing yields, but Inovalis REIT’s (TSX:INO.UN) current yield of 8.9% stands out, even among the generous dividend payer group of REITs. It’s an office REIT with a completely European portfolio, and it managed to sustain its payouts (and even paid a hefty special dividend), despite the rough phase of the pandemic, especially for Inovalis’s underlying asset class. What’s more, the REIT’s payout ratio remained quite stable.

The REIT is currently both discounted and undervalued and is offering its hefty yield at a payout ratio of 82.6%. And if you invest $20,000 in this REIT at this yield, it will give you monthly payouts of about $148.

Foolish takeaway

The three dividend stocks in your TFSA give you about $356 a month with $60,000 invested. That’s a sizeable enough sum to help you meet a number of small expenses. And if you keep piling it up for a whole year, the $4,272 makes up more than two-thirds of a year’s TFSA contribution room.  

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.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Inovalis REIT and KEYERA CORP.

More on Dividend Stocks

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

golden sunset in crude oil refinery with pipeline system
Dividend Stocks

Best Stock to Buy Right Now: Enbridge vs TC Energy?

Enbridge and TC Energy rebounded nicely over the past year. Are more gains on the way?

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

2 Utility Stocks That Are Smart Buys for Canadians in November

Are you looking for some of the smart buys to consider in November? These utility stocks offer growth and a…

Read more »

View of high rise corporate buildings in the financial district of Toronto, Canada
Dividend Stocks

Is Power Corporation of Canada Stock a Buy for its 5% Dividend Yield?

Is Power Corporation of Canada (TSX:POW) stock's 5% dividend yield worth it? Discover why this resilient stock could be a…

Read more »

hand stacks coins
Dividend Stocks

Here Are My Top 3 Dividend Stocks to Buy Now

These three dividend stocks are ideal for strengthening your portfolio and earning a stable passive income.

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer REIT Stocks to Buy Right Now for Less Than $200

REITs have long been touted as some of the best dividend stocks out there if you want recurring, strong income.…

Read more »