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Written by Amy Legate-Wolfe at The Motley Fool Canada
If you’re looking at the new year with fear in your eyes, then now is the time to focus in on some strong dividend stocks for passive income. However, if you’re a newer investor, it might seem pretty scary diving into a market right now.
While the market will eventually climb higher, as it always does, which dividend stocks will do so first? Today, we’re going to go with another strong option – the perfect option in my opinion, if you’re looking to create $1,000 each and every month.
First, remain consistent!
The best advice I can give if you’re looking to create an enormous amount of passive income, isn’t by investing all that you can. Instead, it’s remaining consistent. That consistency spans across several different areas.
You want to be consistent when it comes to sticking with a budget. Consistently set aside the same amount when it comes to paying your bills, buying essentials, and paying down debt. Then, remain consistent when it comes to your investments as well.
To put it out of your mind, consider making automated contributions. These contributions can be used for bills, for debt, and yes for investments. You could put $500 towards your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). Then, you won’t ever worry you’re missing out.
Stay focused on your goals
Now before you just go ahead and start investing all that money into whatever you think is set to grow, consider your goals. If you want to create long-term cash flow, or indeed passive income at $1,000 per month, you’re going to need to take that into consideration through your investments.
For instance, are you saving to pay down student debt? That’s something you want to pay down very quickly. But if you’re looking to invest and save towards your long-term goal of retirement, then that investment could look a lot different.
It’s therefore always a great idea to meet with your financial advisor who can help you come up with the best savings and payment strategies. They can also help you create enough cash flow in retirement, and indeed create passive income. But there is certainly an option I would consider these days more than others.
Get monthly cash
If you want monthly cash flow from dividends to create passive income, I wouldn’t stick to buying just one dividend stock. Instead, get a whole portfolio, managed by professionals! No, you don’t need to pay a professional. Instead, consider an exchange-traded fund (ETF) such as iShares Canadian Financial Monthly Income ETF (TSX:FIE).