woman data analyze
Establishing a passive-income stream that covers all expenses in retirement is the dream of every investor. Among the milestones in meeting that eventual goal is the coveted $500-per-month level. But how much do investors need to invest to get $6,000 each year?
Perhaps surprisingly, itâs not as hard as you may think. Hereâs a look at how you can invest to get $6,000 each year (or even more).
Step #1: The disclaimer
The first thing prospective investors need to understand is that it will take time, and there will be bumps and falls along the way.
Most investors, particularly those with a few decades still before retirement, donât have a few hundred thousand dollars lying around to invest $50,000 across four stocks today. Thatâs OK!
Investing is a long-term play that needs plenty of patience and discipline.
And finally, no stock, even the most defensive one, is without some risk. Thatâs precisely why investors should establish a diversified portfolio across several segments of the market.
Step #2: Start with the right stocks for income growth
With expectations established, the next step is to find the perfect stocks to invest in. These should be well-diversified picks that provide both growth and income-earning potential for decades.
The first stock to invest to get $6,000 each year will be Enbridge (TSX:ENB). Not only does Enbridge offer investors some defensive appeal, but it also boasts a crazy 7.78% dividend.
Adding to that appeal, Enbridge has provided annual upticks to that dividend for three decades and plans to continue that annual cadence.
To start, letâs consider a $30,000 investment in Enbridge. At the current stock price, that amounts to 645 shares, which provides an income of $2,360.70. Thatâs still far from our goal, but long-term investors need to keep in mind that this is a long-term play comprising multiple stocks.
In short, investors should be looking to invest in Enbridge today and let reinvestments provide growth over a decade or two. As a final bonus, Enbridge also happens to be trading at a 12% discount over the trailing 12-month period.
Step #3: Sprinkle in some defensive appeal
Another great stock to consider buying to invest to get $6,000 per year is Canadian Imperial Bank of Commerce (TSX:CM). CIBC is a stellar long-term pick that also boasts a dividend with a juicy 5.44% yield.
Given a $30,000 investment into the big bank, investors can expect to earn just over $1,645.02. And, as with Enbridge, investing early and allowing that investment to grow over time through reinvestments is key.
Despite its current inflation-induced pullback, Canadaâs banks remain stellar long-term picks. They boast strong growth, reliable revenue streams, and very juicy dividends.
Step #4: Add a defensive titan that trades down a lot right now
Even the most defensive pick will respond to market volatility. Thatâs the case with the next stock to invest to get to $6,000: BCE (TSX:BCE).
As one of the largest telecoms in Canada, BCE is no stranger to volatility or defensive appeal. The company has been paying out dividends for well over a century without fail, which covers nearly every market crash, boom, and recovery in memory.
And thanks to rising interest rates and, more recently, BCEâs transformation initiative, the telecom now boasts an utterly insane 9.02% yield.
This means that investors who drop $30,000 into the telecom today will earn an income of $2,681.28. And like the other stocks mentioned above, BCE has provided annual upticks for over a decade without fail.
Step #5: Roll it all together and wait it out
All the stocks mentioned above have three common themes: they all offer growth and income-earning capabilities, they all provide some defensive appeal, and they are all trading at discounted levels.
Given the investments noted above, prospective investors who invest to get $6,000 will not only hit that milestone but pass it if they invest (over time) $30,000 into each stock.
Should you invest $1,000 in BCE right now?
Before you buy stock in BCE, consider this:
The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now⦠and BCE wasnât one of them. The 10 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 âeBay of Latin Americaâ at the time of our recommendation, youâd have $15,578.55!*
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 â 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 32 percentage points since 2013*.
See the 10 stocks * Returns as of 3/20/24
More reading
Fool contributor Demetris Afxentiou has positions in BCE and Enbridge. The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy.
News Related-
The best Walmart Cyber Monday deals 2023
-
Jordan Poole took time to showboat and got his shot blocked into the stratosphere
-
The Top Canadian REITs to Buy in November 2023
-
OpenAI’s board might have been dysfunctional–but they made the right choice. Their defeat shows that in the battle between AI profits and ethics, it’s no contest
-
Russia-Ukraine Drone Warfare Rages With Dozens Headed for Moscow, Amid Deadly Winter Storm
-
Trump tells appeals court that threats to judge and clerk in NY civil fraud trial do not justify gag order
-
Can Anyone Take Paxlovid for Covid? Doctors Explain.
-
Google this week will begin deleting inactive accounts. Here's how to save yours.
-
How John Tortorella's Culture Extends from the Philadelphia Flyers to the AHL Phantoms
-
Tri-Cities' hatcheries report best Coho return in years
-
Wild release Dean Evason of head coaching duties
-
Air New Zealand’s Cyber Monday Sale Has the 'Lowest Fares of 2023' to Auckland, Sydney, and More
-
NDP tells Liberals to sweeten the deal if pharmacare legislation is delayed
-
'1,000 contacts with a club': Tiger Woods breaks down his typical tournament prep to college kids in fascinating video