Passive Income: Earn $ 28 a day for life

June 8, 2021

Canadians lost about 68,000 jobs last month thanks to COVID-19. It was another month that unemployment continued to fall due to third wave restrictions, according to Statistics Canada. Even if the economy seems to be recovering, with the TSX At all-time highs, we are still a long way from a full recovery. Because of this, passive income remains one of the best ways to tackle not only lower funds but also unemployment in general.

If COVID-19 has taught us one thing, it is that we need to be prepared for financial repercussions. It doesn’t just come from losing a job. It also comes from tragedy, which is a pandemic. Suddenly you or a family member have been hospitalized for an extended period of time. That means you will lose income. You need a method of creating an emergency fund. This is where passive income comes in.

A good place to start is to set up an emergency fund equal to three months’ wages. But even if you don’t end up needing it, get in the habit of working towards a passive income of $ 28 per day. That’s an extra hour of work without lifting a finger. So let’s see how to get there.

Driven by passive income

Your emergency fund can be powered by passive income by realizing a solid truth. Passive income is usually tied to dividends when you invest in stocks. And dividends come every quarter, and sometimes every month, like a paycheck. Unless there is a financial crisis, these dividends are unlikely to be cut by blue-chip companies. So you can look forward to growth rather than volatility in stocks.

What’s also great is, once you’ve established the habit, or even an automated payment plan, of reinvesting in your passive stocks, the hard work is done! All you have to do is sit back and wait and see when you need or want your cash treasure. Given that inflation will only rise at a higher rate of 2% or more over the next few years, this is also an excellent way to fight inflation.

Earn $ 28 a day for life

A great blue chip company that offers a solid dividend yield is Selection properties REIT (TSX: CHP.UN). The Real Estate Investment Trust (REIT) is offering a dividend yield of 5.10% as of press time. This dividend is paid monthly rather than quarterly like many other dividend stocks. To reach $ 28 per day in passive income, you would need to invest $ 200,256.76 at the time of writing.

But no fear! To achieve this goal, you need to save the money first. This can be accomplished within a decade by setting aside about $ 20,000 per year or $ 1,600 per month. That way, you will achieve that goal by reinvesting your shares in the stock and also using your residual income.

The reason I picked Choice REIT as a great passive income stock is because it’s a solid rebound game. The company invests in everything from industrial property to residents, including Loblaw. It’s a diverse, $ 10.54 billion company that owns and growing 724 properties.

Bottom line

Investing in residual income seems easy, but it takes a systematic approach in order for it to work to your advantage. By reinvesting in dividend stocks and creating those habits, you will soon have an emergency fund, or at least a nest egg, to set you up for life. This passive income gives you the security and stability you need to achieve financial freedom.