When investors have $10,000 and want to put it to work for annual passive income, the most relatable thing to consider is reliability over excitement. The goal isnât to double the money overnight, but to build a stream of cash that shows up year after year without constant monitoring. That means thinking about businesses that generate steady cash flow, have a clear reason their income keeps coming in, and donât require perfect economic conditions to keep paying shareholders. Yield matters, but sustainability matters more because a slightly lower payout that lasts is far more powerful than a high yield that gets cut. So, let’s look at how to get there.
Getting started
To earn high passive income inside a Tax-Free Savings Account (TFSA), investors need to focus on after-tax reality rather than headline yield. Because TFSA income is completely tax-free, dividends compound faster, and reinvested payouts can quietly snowball over time. The best TFSA income stocks usually share a few traits. These include predictable earnings, conservative payout ratios based on cash flow rather than accounting profits, and businesses that can at least modestly grow earnings to offset inflation. Diversification also matters. Relying on one single income source increases risk, while blending financials, real assets, and different payout schedules smooths cash flow across the year.
Another key consideration for high TFSA income is volatility tolerance. Income investors often underestimate how much price swings can test their patience, even when dividends remain intact. Choosing dividend stocks with long dividend histories, strong balance sheets, and clear management communication helps investors stay invested during market drawdowns.
MFC
Manulife Financial (TSX:MFC) is a strong candidate for turning $10,000 into annual passive income because of its scale, diversification, and improving earnings profile. In its most recent earnings, Manulife reported solid growth in core earnings, supported by higher investment income, strong wealth and asset management results, and improving insurance margins. Management continues to emphasize disciplined capital allocation, with a focus on Asia growth, expense efficiency, and returning capital to shareholders through dividends and buybacks.
From a fundamentals perspective, MFC offers an attractive balance of income and durability. It trades at a reasonable valuation relative to earnings and book value, generates strong free cash flow, and maintains a dividend payout ratio that leaves room for sustainability and growth. With a dividend yield that is typically higher than the Canadian bank average, a $10,000 investment can generate meaningful annual income right away — all while the companyâs global footprint and long-term demographic tailwinds provide confidence that those payments can continue and potentially grow inside a TFSA.
FCD
Firm Capital Property Trust (TSX:FCD.UN) is a lesser-known but compelling option for investors seeking higher passive income from a $10,000 investment. The real estate investment trust (REIT) owns a diversified portfolio of industrial, retail, and residential properties, with a focus on necessity-based tenants and smaller, less competitive markets. Recent earnings showed stable rental income, disciplined cost management, and continued coverage of its monthly distribution from adjusted funds from operations, reflecting a business built around cash generation rather than aggressive expansion.
Fundamentally, FCD.UN stands out for income-focused investors because of its high distribution yield, monthly payout structure, and relatively conservative leverage compared to many peers. While it doesnât offer rapid growth, it offers consistency, which is exactly what many TFSA income investors are looking for. A $10,000 investment can produce a noticeably higher annual cash payout than most large-cap stocks, and when held inside a TFSA, that income remains fully tax-free. For investors comfortable with REIT risk and seeking dependable cash flow, FCD.UN can play a valuable role in building annual passive income.
Bottom line
A TFSA rewards patience, and the biggest long-term gains usually come from holding quality income producers through cycles rather than chasing whatever has the highest yield at a given moment. But MFC and FCD offer it all. In fact, $10,000 could bring in $1,218.92 on the TSX today.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| FCD.UN | $6.03 | 1,657 | $0.52 | $861.64 | Monthly | $9,993.71 |
| MFC | $49.23 | 203 | $1.76 | $357.28 | Quarterly | $9,998.69 |
In short, if you’re an investor seeking consistent, diversified income, these two offer it up in spades.
The post Put $10,000 to Work to Earn $1,219 in Annual Passive Income appeared first on The Motley Fool Canada.
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* Returns as of November 17th, 2025
More reading
- 2 Easy Canadian Stocks to Buy With $1,500 Right Now
- For Passive Income Investing, 3 Canadian Stocks to Buy Right Now
- 1 Dividend Stock Iâd Buy Over Royal Bank Stock Today
- Is Manulife Stock a Buy, Sell, or Hold in 2026?
- TFSA: 2 Dividend Stocks to Buy and Hold Forever
Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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