5 Ways to Invest $5,000 for Long-Term Financial Security
Written by Puja Tayal at The Motley Fool Canada
Financial security is about having enough money to withstand expected financial situations. There are multiple elements in financial security. You can buy life, car, home, and medical insurance for contingencies. You can build an emergency fund for unexpected events. But what about securing your finances from inflation?
A financial security portfolio should cater to five things, and these instruments will help you with that.
You can start investing $1,000 each in two income-generating stocks that grow their dividends annually by 3% and offer a dividend-reinvestment plan (DRIP).
CT REIT (TSX:CRT.UN) gives you dividends from rental income paid by Canadian Tire for its retail stores. The real estate investment trust (REIT) has the advantage of first choice to develop and buy stores for the retailer. It has been growing its dividend annually every July for the last 12 years and can continue to do so.
A $1,000 investment today can buy 63 units of CT REIT, which will pay dividends of $59.7 in a year. This amount may look small, but if you opt for DRIP, the dividend amount will be used to buy more income-paying units and compound your income in the long term.
|
Year |
CT REIT Stock Price |
Stocks Purchased |
Total Share Count |
Annual Dividend Per Share |
Annual Dividend Income |
Total Investment |
|
2025 |
$14.51 |
134 |
1185 |
$0.8982 |
$1,064.78 |
|
|
2024 |
$14.77 |
124 |
1051 |
$0.8982 |
$944.42 |
$1,944.42 |
|
2023 |
$16 |
106 |
927 |
$0.8982 |
$832.95 |
$1,832.95 |
|
2022 |
$16.94 |
94 |
821 |
$0.854 |
$700.82 |
$1,700.82 |
|
2021 |
$15.69 |
96 |
727 |
$0.821 |
$596.85 |
$1,596.85 |
|
2020 |
$16 |
88 |
631 |
$0.793 |
$500.31 |
$1,500.31 |
|
2019 |
$12.94 |
111 |
543 |
$0.757 |
$411.14 |
$1,411.14 |
|
2018 |
$14.36 |
86 |
432 |
$1.000 |
$432.28 |
$1,432.28 |
|
2017 |
$14.92 |
79 |
346 |
$0.700 |
$242.04 |
$1,242.04 |
|
2016 |
$12.71 |
88 |
267 |
$0.680 |
$181.31 |
$1,181.31 |
|
2015 |
$11.9 |
89 |
179 |
$0.663 |
$118.42 |
$1,118.42 |
|
2014 |
$11.15 |
90 |
90 |
$0.650 |
$58.30 |
$1,058.30 |
If you invested $1,000 on January 1 for the last 12 years, your $1,000 investment plus the dividend earned will help you accumulate around 1,185 units by 2025. These units would pay over $1,000 a year.
TC Energy (TSX:TRP) is another income-paying stock that gives quarterly dividends from the toll money it collects for transmitting natural gas through its pipelines. It has a history of paying and growing dividends for the last 25 years. Last year, the company split its gas and oil pipeline business. As per the management’s long-term target, it plans to grow its dividend by 3-5% annually. The dividend will keep growing as Canada exports most of its natural gas to the United States and is looking to export to other countries.
link
