How to Make $16 Per Month in Passive Income Right Now

Some of the best passive income stocks right now are in the real estate sector. The problem is that it can be difficult to find those that continue to perform well and are cheap. And it can even be heavier to find the ones that pay out monthly.

But today I have at least one passive income stock that can give you a solid monthly income. While I never recommend putting all your eggs in one basket, it can at least give you an example of how to create an income stream. One that pays out like a paycheck every month.

SmartCenters REIT

The monthly passive income stock I would consider today is SmartCenters REIT (TSX:SRU.UN). SmartCentres has a lot to offer. The first? It’s super cheap. SmartCentres stock currently trades at just 4.41 times earnings. What’s more, it can currently cover all of its debt with 99% of its equity. It’s not ideal, but it’s certainly better than having too much debt on hand when things go wrong.

SmartCentres shares are also down 8.5% year-to-date. This gives you a strong entry point and is better than that too TSX is performing at the time of writing this article. Market dips aside, the company has done reasonably well — up 77% over the past decade alone.

Then there’s its dividend. SmartCentres stock offers a current dividend yield of 6.51%. That’s $1.85 per share annually and about $0.15 per share monthly. Additionally, the dividend has grown by a compound annual growth rate (CAGR) of 1.59% over the past decade.

Before you buy

Now you have the information behind SmartCentres stocks. Next, you need to figure out how much to buy for monthly dividends. After all, the passive income stock doesn’t offer that much at just $0.15 per share. And stocks are low, but not just nothing.

So what I would recommend is to set a reasonable goal before you buy. That’s going to be quite a lot Nothing to do with how much money you want to make each month. Instead, it should come down to how much you can afford to invest.

A good starting point is to set aside between 5% and 10% of your monthly salary for investments. I’m not saying everything should go in the direction of this one stock, but we’re just going to use this as an example. If you make $60,000 a year, 5% of that would equate to $3,000 a year in investments.

how much you could get

If you set aside $3,000 to invest in this passive income stock, here’s how that could play out this year. That alone would net you 107 shares, which equates to $198 in passive income this year. That’s $16.50 per month. Not bad.

But let’s assume you do everyone year for the next decade. In addition to considering the growth of your passive income stocks, you should consider the growth of the stock itself. SmartCentres REIT in this case has a CAGR of 5.9% over the past decade.

In this case, if you continue to set aside $3,000 a year and reinvest dividends, you could have a portfolio worth $59,338 over the next decade. Also, your annual dividend income would be $2,616! That’s now $218 per month.

bottom line

Again, this is just one example to show you how investing consistently can create dividends that pay dividends every month. By choosing the right passive income stock, you can set yourself up for long-term growth and dividends that start paying off now.