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 To Use Your TFSA to Earn $2,000 Per Year in Passive Income

To earn $2,000 per year in passive income

from your TFSA, you will need to invest a total of approximately $32,000 in dividend stocks. This is based on an average dividend yield of 6.25%.

Here are some steps on how to use your TFSA to earn $2,000 per year in passive income:

Open a TFSA account. If you don't already have a TFSA account, you can open one with most banks and investment brokers.

Contribute to your TFSA. You can contribute up to a certain amount of money to your TFSA each year. This amount is known as your contribution room. You can find your TFSA contribution room on the Canada Revenue Agency (CRA) website.

Invest in dividend stocks. Dividend stocks are stocks that pay out a portion of their profits to shareholders on a regular basis, typically quarterly. Look for dividend stocks with a good track record of paying out dividends and a sustainable dividend yield.

Reinvest your dividends. If you reinvest your dividends, you will buy more shares of the dividend-paying stocks. This will help to grow your portfolio over time and generate more passive income.

Here are some examples of Canadian dividend stocks that you could consider investing in:

Enbridge (ENB)

Royal Bank of Canada (RY)

BCE Inc. (BCE)

Brookfield Asset Management (BAM.A)

Toronto-Dominion Bank (TD)

It is important to note that past performance is not indicative of future results. You should always do your own research before investing in any stock.

Once you have invested your money in dividend stocks, you can sit back and relax and enjoy the passive income that they generate. You will receive your dividends on a regular basis, and you can choose to reinvest them or withdraw them as needed.

Here are some additional tips for using your TFSA to earn passive income:

Diversify your portfolio. Don't put all of your eggs in one basket. Invest in a variety of dividend stocks from different sectors to reduce your risk.

Rebalance your portfolio regularly. As your portfolio grows and changes, you may need to rebalance it to ensure that it still meets your investment goals and risk tolerance.

Have a long-term investment horizon. Investing in dividend stocks is a long-term investment strategy. Don't expect to get rich quick. Instead, focus on building a portfolio that will generate sustainable passive income over time.