How To Earn $1,000/Month Tax-Free and How Anyone Can Do It

Remember, this blog shares what I have done and learned through years of research and experience. It’s never financial advice. Please consult a professional before making investment decisions that affect your personal situation.

Imagine waking up every month to find an extra $1,000 tax-free in your bank account—not because you worked a second job or launched a side hustle (which can be fun!), but simply because your investments are literally paying you while you live life. Sounds like something only financial experts or the wealthy can pull off, right? Actually, it’s a lot more realistic than most people think, especially for everyday Canadians.

Just five years ago, I made a big shift in my investing style. When I first started income investing, I bought traditional dividend stocks like Suncor, Enbridge, BMO, and Telus because they were familiar names. But honestly, I wasn’t thrilled with their relatively low yields of only around 4% or 6% and often quarterly payments...ugh! This drove me to seek out higher-yield options with managable ,risk and that’s when I discovered high-yield income ETFs paying anywhere from 13% to 20% and monthly payouts — way better! Switching to these funds has changed my life by providing a steadier and larger income stream. Having a steady, reliable income from dividends has given me and my family peace of mind and real financial flexibility.

So, how can you build your own $1,000 per month dividend portfolio? Let me walk you through what I’ve done, what works, and how it might help you.

"I wish I would have known about this years ago? Why aren't we being taught this?"

Why Growth Investing Isn’t the Only Game in Town

If you’re like most investors, you’ve probably been told to buy growth stocks—companies that (hopefully) keep going up in price so you can cash out for a profit someday. But let’s be honest, this kind of investing can be stressful, lots of work and usually not very profitable as:

• You’re glued to your screen, watching every market twitch.

• You’re hoping the next big winner shows up—sometimes for years.

• You worry about downturns wiping out your gains.

• And worst of all, you don’t always feel like you’re steadily getting closer to your financial goals.

That’s a rollercoaster, and it’s exhausting.

Why I Prefer Income-Oriented ETFs (And Why You Might Too)

Instead of putting all my eggs in growth stocks, five years ago I made a big shift into income-oriented ETFs—funds that pay out regular dividends, often very high ones (think 13% to 20% annual yield in Canada).

For me, here’s why these income-oriented funds make sense:

• Diversification: Each fund often holds dozens of different stocks, so I'm not betting on just one company to do well which reduces my overall risk.

• Steady Income: Many of these ETFs use something called a covered call strategy to generate reliable monthly income—whether the market is up, down, or sideways.

• Flexibility: I can choose to either reinvest those dividends to grow my portfolio faster, or withdraw some cash to help with monthly expenses, travel, or buy other investments such as a growth stock if it looks attractive - the point is I have more options and flexibility than before.

• Tax Efficiency: When held inside a TFSA, dividends and withdrawals are tax-free, making my money work even harde. RRSPs provide tax deferral, which can be another smart tool.

There Are Even Higher Yields Available in U.S. Funds

If you’re open to investing beyond Canadian ETFs, you should know there are U.S.-based high-yield ones paying anywhere from 20%, 50% and even 100% and more—yes, 100%! These funds often use sophisticated strategies like leveraged covered calls and options to generate massive income streams. I hold several of these which boost my yield and income each and every month.

💡Tip: To avoid the 15% U.S. withholding tax on dividends, it’s best to hold these U.S. ETFs inside an RRSP. That way, you keep more of your income instead of handing it over to the IRS.

What Are Covered Calls? Are They Risky?

Covered calls might sound complicated or even risky, but here’s the gist: high-yield income ETFs sell “options” on stocks they already own. Think of it like renting out those stocks to other investors for a fee (called a premium). That fee turns into extra income that the ETF pays out to you. While this strategy can limit how much the stock price can rise, instead it can pay out a more steady, predictable income—which is exactly what I, and others, as an income investor want. It also gives some downside protection too should the market take a dip. Think of it like trading some growth for regular income with a safety net.

How to Build Your Own $1,000 Per Month Income Stream

Building a steady $1,000 per month dividend income isn’t magic—it’s a matter of doing some learning (like you are now!), having a strategy, being consistent, and leveraging time. Here’s one simple framework to get you started:

1. Choose Income-Oriented ETFs: Focus on ETFs with strong, sustainable dividend yields. Some examples which I use myself include Canadian ETFs like CDAY (Hamilton Canadian Equity Day MAX), HHIS (Harvest Diversified Enhanced Income Shares), BANK (Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund), which yield between 17% and 25%. If you’re comfortable and looking for even more yield, explore the universe of high-yield U.S. ETFs from fund families such as Yieldmax, NEOS, Roundhill, RexShares and many others.

2. Open the Right Account: Use your TFSA for tax-free income and flexibility and stay within your TFSA room and annual contribution limits. Consider your RRSP for U.S. ETFs to avoid the 15% foreign dividend withholding taxes and to get tax deferral benefits. I use and love DIY online brokerages: Wealthsimple and Questrade.

3. Start Investing Consistently: Fund your investment account. Even $300/month can grow substantially over time. The key is consistency and reinvesting dividends to accelerate growth.

4. Reinvest or Use Your Dividends: You can reinvest dividends to build your portfolio faster, or use part of them for expenses or lifestyle goals. The choice is yours. Leevrage the power of compounding and snowballing.

5. Be Patient and Stay the Course: The power of compounding over 5, 10, 15, or 20 years can turn modest monthly contributions into a very substantial, reliable income stream such as your personal pension plan.

Real People, Real Results.

Example 1: Maya, 42 years old needs an extra $1,000 per month

Maya needs an extra $1,000 per month to cover bills and has $80,000 in a high-interest savings account earning 3%. With income ETFs paying around 15% annually, she needs about $80,000 invested to generate $12,000 per year in dividends or $1,000 per month. Maya shifts her $80,000 into her TFSA and buys some income-oriented ETFS which start paying her dividends within the first month so she can generate $1,000 - plus which is tax-free as it's inside her TFSA. In those months where she doesn't need all of the money, she reinvests the dividends to help grow her portfolio and dividends without adding an extra "dime".

Example 2: George and Donna create an extra $1,000 per month with just $25,000

George and Donna have a young and growing family which is becoming more expensive. Donna is a stay-at-home mom and would like just an extra $1,000 per month to provide a more comfortable financial buffer and peace of mind to help support their lifestyle especially as the kids are getting a bit older with more activities on the horizon. Together, they have accumulated about $70,000 inside a spousal RRSP sitting mostly as cash and GICs. They decide to re-allocate $25,000 of it into income-oriented investments. They choose high-yield U.S. income funds from Yieldmax (YMAG, AMDY) which are paying about 50% annual yield which generates a monthly income stream of $1,041 per month. As Donna earns less than George and the funds are in a spousal RRSP, the funds withdrawn do not create a substantial tax burden for them. They don't always need this extra income but when they do they are grateful knowing that this additiona income is available and that they have reduced their income risk by creating for themselves another souce of income over which they have complete control.

The Best Part? Anyone Can Start, Right Now

This style of investing isn’t just for the wealthy or finance pros but rather for everybody at any age and stage in life. Whether you have $0, $5,000, or $50,000 to start, whether you’re 25 or 65, you can create your own reliable income machine. Unlike growth investing where your success depends solely on stock prices going up (which can be stressful and unpredictable), income investing lets you build steady, predictable cash flow month after month giving you greater flexibility and options about how to use this extra cash. You’re moving toward your financial goals with confidence—not hope.

Building a $1,000/month dividend portfolio is absolutely doable and doesn't require $1,000,000 to get started or tons of financial expertise. Start small, stay consistent, take advantage of tax-advantaged accounts like the TFSA and RRSP, and consider adding precious metals for extra security.

✨ As someone who specializes in building greater financial independence, safety and security, I can help you design a personalized income portfolio with or without physical precious metals so you can finally get started on adding more income, stability, growth and peace of mind. Email me at preciousmetalscoach@proton.me so we can discuss what's possible for you and your loved ones.

Ready to build your personal cash machine? Ready ti reduce your stress and anxiety? There’s no better time than now. Your future self will thank you.

To your financial health 🥂,

David

The Precious Metals Coach + Money Mindset Mentor

Real Money For We The People

preciousmetalscoach@proton.me