Earn Passive Income: $10/Day the Easy Way

Consider investing in this Canadian dividend aristocrat to create a passive income stream that helps you earn a substantial amount through dividends alone.

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money while you sleep

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Earning money while you sleep is a dream that can become a reality. Earning truly passive income is possible for Canadians. It may require putting in a lot of work to choose the right income-generating investment to meet your financial goals while aligning with your risk tolerance. The problem with most passive income streams is that they require more work, even after making the initial effort and investments to set it all up.

Suppose that you purchase an investment property to generate rental income. You will need to handle the maintenance, work hard for rent collection, and manage the property. Whether you do it yourself or hire someone else to do it for you, it is a hassle you have to contend with.

Truly passive income

Dividend investing offers a much more convenient alternative to real estate investing if you want to create a passive income stream. Suppose that you want to start earning $10 per day in passive income through dividend stocks. That translates to roughly $3,650 per year.

Creating a basket of reliable Canadian dividend stocks and building it up can provide you with the dividend income you’re looking for. However, it is crucial to choose reliable dividend stocks with a track record for regularly paying shareholder dividends. High-yielding investments that offer virtually guaranteed dividend payouts can help you achieve various financial goals.

A Canadian dividend aristocrat to consider

It is crucial to ensure that you do not place all your eggs in one basket when investing your hard-earned money. Diversifying your investment capital across several high-quality and income-generating assets is better to secure a reliable passive income stream. If you are looking for a stock that you could use to begin building such a portfolio, Fortis Inc. (TSX:FTS)(NYSE:FTS) might be an excellent asset to consider.

Fortis is a $28.52 billion market capitalization utility holdings company. It is a Canadian dividend aristocrat with a 48-year dividend growth streak. Fortis owns and operates several regulated utility businesses across Canada, the U.S., Central America, and the Caribbean.

The company generates almost its entire revenue through regulated and long-term contracted assets. It means that the company generates predictable and reliable cash flows.

The company’s management can use its reliable cash flows to comfortably fund its dividend payouts and capital programs to generate more revenue. Fortis stock trades for $60.06 per share at writing, and it boasts a 3.56% dividend yield.

Foolish takeaway

Suppose you want to earn $3,650 per year through dividends alone using Fortis stock. In that case, you would need to invest around $102,530 in Fortis stock to generate the annual returns you are looking for. But remember that it is just a hypothetical scenario.

Ideally, you should diversify your investment capital across a basket of reliable dividend stocks to mitigate risk and build a more resilient passive income stream to meet your financial goals. Fortis stock is a reliable Canadian dividend aristocrat. It could be the perfect stock to begin building such an investment portfolio.

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 FORTIS INC.

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