I’ve spent the past few months running the numbers on the Tax-Free Savings Account (TFSA), trying to figure out what it would take to collect $800 a month in dividends, all sheltered from the Canada Revenue Agency (CRA).
An $800 a month in dividend income translates to an annual payout of almost $10,000. It sounded like a stretch until I did the math.
To generate $9,600 a year out of a fully maxed $109,000 TFSA starting today, you would need an average forward yield of 8.81%.
A high dividend yield might sound attractive, but it’s often a warning sign. In addition to the dividend yield, you need to analyze a companyâs potential cash flow growth, the payout ratio, and long-term debt.
Basically, ensure a high dividend yield is backed by stable cash flow, making the payout reliable across market cycles.
Is Timbercreek a good TSX dividend stock?
One high-yielding name, Timbercreek Financial (TSX:TF), caught my attention. A small-cap Canadian dividend stock, Timbercreek offers you a yield of 11% in August 2026.
Timbercreek Financial is a mortgage investment company. It lends against income-producing commercial real estate across Canada, including multi-residential, office, and retail buildings.
Because the underlying properties already generate rental income, that cash flow helps service the loan and lowers the odds of default.
The company also targets a segment banks tend to avoid: shorter-term, structured loans for real estate investors who need faster execution and more flexible terms than a traditional bank can offer.
Timbercreek currently pays a monthly distribution of $0.058 per share. With the stock trading around $6.10, that works out to an annual yield near 11%.
To reach $800 a month, divide $800 by $0.058. You would need roughly 13,794 Timbercreek shares. At $6.10 per share, you need to invest about $84,144, comfortably inside the $109,000 TFSA limit, with room left over.
During the company’s recent annual meeting, Board Chair Blair Tamblyn highlighted the governance framework behind these payouts, noting that “the company has adopted a majority voting policy, and therefore, the company will follow that policy in respect to the results of each of the relevant motion.”
That kind of transparency around how the board handles voting outcomes, including a bylaw amendment shareholders voted down at that same meeting, is a detail income investors should appreciate.
It signals a management team willing to be held accountable, which matters when you are trusting a company with an 11% yield.
Balance high-yield with reliable dividend stocks
Building a reliable TFSA income stream takes research, patience, and a willingness to dig into company fundamentals and management commentary.
Timbercreek looks like a reasonable piece of a monthly income portfolio, and the math above shows it could theoretically get you to $800 a month on its own. But I would not put an entire TFSA into a single 11% yielder.
Timbercreek is sensitive to interest rates and credit conditions in the commercial mortgage space. Moreover, a single stock concentration removes your margin for error if the payout ever gets trimmed.
A more durable approach is pairing a modest position in a higher-yielding name like Timbercreek with blue-chip Canadian dividend stocks in energy infrastructure, commercial real estate, and royalty businesses that typically yield between 5% and 7%.
That mix could realistically generate $500 to $620 a month, with regular dividend increases and reinvested distributions pushing you toward that $800 a month target over the following years.
Should you invest $1,000 in Timbercreek Financial right now?
Before you buy stock in Timbercreek Financial, consider this:
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* Returns as of July 30th, 2026
More reading
- This 10% Dividend Stock Pays You Every Single Month
- An 11% Dividend Stock to Buy for $231 Every Month
- The 5 Highest-Yielding TSX Stocks, and the Risk Hidden in Each Payout
- Here’s an 11% Dividend Stock That Pays Out Monthly
- The Smartest Over 8% Dividend Stocks to Buy With $1,000 Right Now
Fool contributor Aditya Raghunath 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.
