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21 June 2021
20:55 hour

5 passive income ideas I’d consider

The Motley Fool UK

10/06/2021 - 17:58

Christopher Ruane looks into five passive income ideas he would consider to try and start receiving money without having to work for it. The post 5 passive income ideas I’d consider appeared first on The Motley Fool UK.


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  1. My passive income list right now would have these 2 ideas on it (12/03/2021 - The Motley Fool UK)
    Coming up with ways to earn money without working doesn’t have to be hard. A passive income list can contain simple, practical ideas that are immediately actionable. A key part of my approach to passive income is putting away spare money in a Stocks and Shares ISA, then investing it in income generating shares. Sometimes shares which generate income can cut or cancel their dividends. That would impact my passive income. That’s why I always try to have more than one stock idea on my passive income list. The link between free cash flow and passive income Looking at earnings can tell a lot about a company’s financial success. However, earnings are an accounting measure. Free cash flow is the surplus money the company generates. That matters when looking at passive income ideas, as paying out juicy dividends for many years requires the right level of free cash flow. That’s why one of my passive income ideas is Imperial Brands (LSE: IMB). I already own it, but would consider buying more at the current price. The owner of brands such as John Player Special and Lambert & Butler is a cash generation machine. However, its policy of growing dividends by 10% each year meant that dividend coverage from free cash flow slipped. While the difference between earnings and free cash flow may seem academic, that illustrates why it’s worth understanding it when looking for passive income ideas. The upshot was that Imperial cut its dividend by a third. So, you may wonder, why is it still on my passive income list? The City has apparently cooled on Imperial, which means its share price has fallen compared to recent years. At its current price, the shares yield 9.9%. That means that, for every £100 I put into Imperial, I would expect £99 in passive income each year. If the company raises the dividend, that could increase. Dividends aren’t guaranteed and as tobacco consumption is falling in many markets, free cash flows could be affected down the line. Basing my passive income list on what I know I don’t think passive income should require a lot of work. That is why it is called passive, after all. So that influences me to stick to my circle of competence when assessing passive income ideas. Instead of trying to understand industries or companies I don’t know, I often start by thinking about companies which seem to be well-regarded by my social circle. Then I look into whether they are listed. Sometimes, well-known, well-run companies are already fully priced by the market. But not always. Consider Direct Line for example. The insurer is a household name with an iconic brand. Yet these FTSE 250 shares come with a 7% yield. That makes it worth considering for me as a passive income idea. Insurance can be cyclical, though, which can negatively impact pricing. That could affect the dividend, and indeed last year it cancelled its final dividend amid the pandemic, although it did later pay a special dividend. I also find it discouraging that over the past year, directors have sold but not bought shares with their own money. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading A UK share I’d buy to double my money in the next decade The Imperial Brands share price has fallen. Here’s why I’d still pick its 10% yield Two passive income streams I use 2 cheap UK shares to buy now 2 UK dividend stocks with 9% yields I’d buy today christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post My passive income list right now would have these 2 ideas on it appeared first on The Motley Fool UK.
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  2. Passive income ideas I’d use with £500 a month (09/03/2021 - The Motley Fool UK)
    Passive income ideas can help one get money without having to work for it. From letting property to owning shares, there are lots of ways in which one can supplement actively earned income. Putting aside some money each month to invest in a passive income idea can help create a revenue stream. That is because a lot of shares pay dividends, which are payments to shareholders while they hold the shares. It’s basically like becoming a part owner of the business, and getting a slice of the profits several times a year without having to do any of the work. With £500 a month invested in a Stocks and Shares ISA, I think it should be possible to create a passive income stream in a matter of months. Finding passive income ideas When scanning the stock market for passive income ideas, I look at how much income I expect a company to generate in future. A company which is still investing heavily in new technology or building its business, such as Ocado, may not produce enough income to pay dividends. That doesn’t necessarily make it a bad investment. But it does mean that it isn’t likely to supply me with passive income any time soon. By contrast, a well-established company in a mature industry may be able to generate substantial surplus profit. It can return that profit to shareholders as dividends. For example, Imperial Brands is mostly focussed on selling cigarettes. While it does have some next gen products, cigarettes don’t require large research or capex investment at this stage in their product cycle. So the company can pay out a lot of money as dividends – last year, Imperial paid out £1.3bn in dividends to shareholders. But one of the downsides of a mature industry is that it could decline, or returns could shrink. For example, in many of Imperial’s key markets, cigarette consumption is set to fall. It can compensate to some extent with price increases. But over time, falling demand could equal falling profits. Pick and mix That is one reason I try to spread my investments over multiple shares. That provides some diversification, so that even if one share performs worse than I hoped, I can still hope my passive income ideas will pay out over all. Some companies in the same industry may be better than others, but all could be affected by a downturn. So I don’t just diversify between companies, I also make sure to use passive income ideas in more than one sector. £500 a month is substantial enough to enable me to diversify between different passive income ideas before long. Future income growth Any passive income is welcome for me. But if I was looking at different jobs, I’d consider whether the wages might rise in future or would stay the same. I think it makes sense to do the same with passive income. For example, some companies have a long history of increasing their dividends. DCC has raised its dividend annually for over a quarter of a century. Dividend history doesn’t necessarily indicate future payouts. But a company with an ethos of growing dividends often prioritises dividend payouts and considers how to grow dividends into the future. That is why companies with long dividend growth histories rank highly among my passive income ideas. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Royal Mail share price is soaring in 2021. Should I buy now? 3 UK shares I’d buy before the Stocks & Shares ISA deadline! Will the stamp duty holiday be extended further? ISA deadline: 1 FTSE 100 stock I’d buy before April 2 of my top share picks for March and beyond christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use with £500 a month appeared first on The Motley Fool UK.
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  3. Passive income opportunities: how I choose (24/02/2021 - The Motley Fool UK)
    There are all sorts of passive income opportunities, from setting up an Etsy shop to investing in property. But not all passive income opportunities are created equal. How I explain my approach to assessing and ranking passive income opportunities. Looking at income potential Different passive income ideas dangle anything from a few extra pennies a month to life-transforming riches. But it is worth looking at the actual income potential in detail. Just because someone else has got an idea to work doesn’t mean that anyone can. So while I admire people who can set up successful online stores selling clothes, for example, I don’t think I would make a good income on it myself. Instead I would rather invest in a company like Associated British Foods, which owns Primark. They have the experience and know how to profit from clothes retail. By buying shares and receiving any future dividends, I would be able to gain income from that without having to sell the clothes myself. I also look at the question of when I might receive income. Many shares pay out income quarterly. If I buy shares in British American Tobacco today, for example, I would expect to start receiving income in May, with a dividend due on 12 May. After that I would expect a dividend each quarter. By contrast, if I set up new passive income opportunities like online shops, I may need to pay out capital now to get it going I may then have no idea of when to expect any income – if ever. Passive income opportunities ranked by time investment There’s no such thing as a free lunch, goes the saying. I think the same is true of passive income ideas. To start with, one usually needs to be willing to invest time or money. So it’s possible to use passive income ideas which don’t require money – but often they will take a lot of time. But that’s not really passive. The whole point of passive income is that the money comes in without having to work long hours for it. If the passive income is a side hustle eating into my spare time and weekends, I wouldn’t say it’s really passive. That’s another reason that shares are one of my passive income opportunities. By investing in a diversified portfolio of large, reputable companies, I don’t need to spend a lot of time monitoring my investments. In fact, I would feel comfortable going months or even years at a time without checking how they are doing, just enjoying the income rolling in. While I might be able to get higher returns actively trading faster growing companies, I am happy to have a genuinely passive income.  British American Tobacco, for example, yields 8%. While tobacco usage may decline in many markets, I don’t feel the need to monitor my investment in BAT closely. But that’s partly because I make sure to diversify my holdings so I am not too reliant on one stock for income. That way, even if a company suspends or cuts its dividend, I can still receive passive income.   There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Is Moneysupermarket stock a buy after its recent jump? UK investors: you can buy into this US billionaire’s hedge fund with just £25! Covid-19: what to know about 2021 weddings from the PM’s four-step plan What to look for when investing for income Here’s why I’m bullish on Argo Blockchain shares christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended Associated British Foods. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income opportunities: how I choose appeared first on The Motley Fool UK.
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  4. How to use ETF’s for passive income? (10/06/2021 - Reddit Stocks)
    So I recently have gotten a good chunk of money and want to invest it into an etf so I can start to earn passive income and just keep reinvest and let it snowball into a nice nest egg, my question though is am I suppose to keep switching between etfs or just pick one and hold out on it for as long as it shows promise?   submitted by   /u/DilpickleOriginal [link]   [comments]
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  5. Passive income ideas I’d start using with £10 a day (03/03/2021 - The Motley Fool UK)
    Passive income ideas range from buy-to-let property to setting up an online business. Some appeal to me but require a lot of time or effort so don’t really seem passive. That is why I prefer passive income ideas which require as little of my time as possible. By putting a little money aside regularly into a Stocks and Shares ISA, I am able to build up a nest egg that generates passive income. With £10 a day, I can accumulate over £3,600 a year which I could invest. Why I like blue chip shares for passive income There is an intuitive allure to get rich quick schemes, but a lot of passive income ideas leave me cold. Either they seem far-fetched to me, or I don’t think they are really passive. That’s why I prefer to invest in blue chip companies such as Unilever or Diageo. With business expertise and armies of talented professionals, they are in a position to generate surplus cash. If that gets paid out as a dividend, then as an investor I can gain passive income from the companies’ efforts without scrabbling round trying to earn it myself. Unilever, for example, is the powerhouse behind familiar brands such as Dove and PG Tips. Diageo owns brands such as Guinness and Johnnie Walker. Sure, I could set up my own online business to try to generate passive income. But I would happily let these established companies take the strain instead. £10 a day on Diageo shares would be a more rewarding use of my money than £10 a day on the company’s whisky! A good brand portfolio and experienced management can help a company to prosper, but things don’t always go according to plan. For example, reduced demand for cleaning products after the pandemic could cut Unilever’s revenue. Similarly, if healthy lifestyles lead to people drinking less beer, that could mean a revenue hit for Diageo. A well-rounded company will already have some diversification itself, but spreading one’s portfolio over a number of companies helps with this too. How much income and when Some passive income ideas are speculative, so it’s unclear when income will come in – if it ever does. By contrast, many companies pay out dividends on a set schedule, annually, biannually, or quarterly are the most common frequencies. A dividend typically reflects the company’s recent business performance, so they are not guaranteed. For example, a company may decide to stop dividends due to a change in business prospects. Again, though, a diversified portfolio should help here. When looking at shares, a big consideration for me is how much income they offer. For example, while I like Diageo as a company, its current yield of 2.4% pales next to Imperial Brands, which yields 10%. With passive income as my objective I would look to maximize income by hunting for higher yielding shares. But if I am looking for a future passive income stream, I would also think about a company’s future prospects. For example, Imperial has a lot of debt. Its core product of cigarettes is in decline in many markets. Will it therefore be able to maintain its current dividend level? The answer is always that nobody knows for sure. But in hunting for passive income ideas, I try to focus on shares whose free cash flows look set to cover their dividends. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Cellular Goods share price slips. Is this Beckham-backed cannabis stock a buy? The Aston Martin share price: will it be a 2021 winner? The Renishaw share price is rising! Should I buy the shares now? Should couples split bills 50/50? Why the Yu Group share price soared over 10% today christopherruane owns shares of Imperial Brands and Unilever. The Motley Fool UK has recommended Diageo, Imperial Brands, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d start using with £10 a day appeared first on The Motley Fool UK.
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  6. Passive income ideas I’d use now with £50 a week (15/03/2021 - The Motley Fool UK)
    Sometimes it takes money to make money. Passive income that takes a lot of time doesn’t seem passive to me – but to be honest the alternative is often putting some sort of capital to work. The good news is that I think it’s possible to activate some passive income ideas starting with just £50 a week. Putting a small amount of capital to work each week can be very income-generative. Here’s how. Saving a little regularly is habit forming Putting aside £50 a week on a regular basis is a way of getting into the saving habit. £50 a week would be a couple of hundred pounds within a month. After three months, the pot would already be £650. That is a decent amount, in my view, and I’d be happy to start buying ‘passive income’-generating shares within a Stocks and Shares ISA. If I wasn’t charged dealing fees, I’d start buying almost immediately. But if fees were levied on each transaction, I’d wait a little while to put more money to work at once. That would give me time to look at the market and decide what sort of shares to buy. Passive income ideas in the stock market Not all shares are a good source of income in the short term. Shares that are focused on growth such as The Hut Group or rebuilding their business like Saga often don’t plan to pay out dividends any time soon. For passive income ideas, I would instead look for companies that generate substantial amounts of free cash with which to pay dividends. In many cases, they might not be fast-growing businesses. That is why they are able to pay out the money as dividends instead of investing it in their own future growth. For example, one of my favourite passive income ideas currently is Imperial Brands. The tobacco giant is able to throw off a lot of cash from its portfolio of cigarette brands. Consumption in many markets is set to decline, which could affect this. But pricing power will hopefully allow the company to mitigate some of that impact. Tobacco stocks seem to be fairly out of fashion. With its share price languishing, Imperial currently yields 9.8%. So putting just £50 into the stock ought to generate me a future annual passive income stream of around £4.90 every year. The power of saving every week suddenly becomes clear – every week of putting £50 away adds another possible £4.90 of future annual passive income. Diversifying spreads risk But what if Imperial doesn’t successfully navigate the challenges in the tobacco market? A high yield is sometimes an indicator that analysts worry about a company’s future performance. I don’t know whether such fears will turn out to be justified. Spreading my passive income ideas across different sectors therefore helps me sleep more easily. So, for example, as well as Imperial I hold Unilever. The food to detergents powerhouse yields 3.7%, which is a lot less than Imperial. But holding different blue-chip names is part of my strategy of spreading my risks across different passive income ideas. Finding the right names and sticking to my strategy, I feel confident there are lots of rewarding passive income ideas even if I just put away £50 a week. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Should I buy these cheap FTSE 100 stocks before the ISA deadline? How to shop ethically and sustainably The ITV share price is recovering. Should I buy now? The Roblox share price surged 60% in its first day of trading! Should I buy the US stock? How old is too old for life insurance? christopherruane owns shares of Imperial Brands and Unilever. The Motley Fool UK has recommended Imperial Brands and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use now with £50 a week appeared first on The Motley Fool UK.
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  7. Passive income ideas I’m using now (22/02/2021 - The Motley Fool UK)
    The idea of passive income is attractively simple. Rather than having to work for every pound, at least some income comes in ‘passively’ – for little or no work. From rent on a let property to a royalty payment for creative work, there are lots of practical examples of passive income. But I find a lot of passive income ideas also quite wacky. Setting up new business doesn’t sound passive to me at all! That’s why I prefer to put some money in a Stocks and Shares ISA and choose shares as passive income ideas. Why I like shares as passive income ideas I think one thing a lot of people overlook about passive income is that it’s meant to be passive. For example, I’ve noticed a lot of people are starting to eat meat alternatives. I could set up my own business selling alternative meat online to try and monetize this trend. But why go to all that work? A company like Unilever has vast food experience and marketing expertise. They already have distribution and sales networks. With their ‘Future Foods’ initiative, they are aiming to sell a billion euros a year’s worth of plant-based meat and dairy alternatives. Simply by buying Unilever shares, I hope to benefit from their success, without having to do any work for it myself. Plus the company has a range of well-known cleaning and beauty brands, so it’s not just a speculation on the growth in meat alternatives. With a yield close to 4%, Unilever is among the income investing ideas that let me sit back and get passive income every quarter. I’m not guaranteed such income, though.  It’s not yet known whether Unilever’s push into areas like meat alternatives will be as rewarding as its wider portfolio. Some analysts also worry that the cleaning product sales boom engendered by the pandemic will tail off and hurt profits. That’s why, as with any share, I diversify so that my Stocks and Shares ISA isn’t overly reliant on one company. How I choose shares  Lots of shares may seem like attractive passive income shares at first glance. So how do I decide which ones to buy? First it’s helpful to distinguish between growth and income shares. Growth names like S4 Capital are expected by many investors to grow. They tend to be early-stage companies with a lot of market space still left open to them. They can be attractive – but not as passive income ideas. For passive income, I would focus on income shares. Often in more mature markets, these companies generate money and pay some of it out to shareholders as dividends. A highly cash generative business like tobacco can equate to a strong income stream. Tobacco company Imperial Brands is paying out 10% right now, for example. But tobacco faces an uncertain future. So while I do hold Imperial, I’d also limit my exposure to it. Looking at the likely future demand for a company’s products and indeed a whole industry is one way I assess a share’s attractiveness on my passive income list. Instead of just looking at historical dividend data, I dig in to available information and try to understand whether the company is likely to continue paying dividends in future. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The ULVR share price is under 4,000p. Here’s what I’d do Rolls-Royce share price is around 100p. Here’s what I’d do The ITM share price is up more than 250% in the last year! Should I buy the shares now? A UK share I’d buy in my ISA in March for the new bull market These 12 shares are the FTSE 100’s dogs since 2016. How many do you own? christopherruane owns shares of Imperial Brands, S4 Capital plc, and Unilever. The Motley Fool UK has recommended Imperial Brands and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’m using now appeared first on The Motley Fool UK.
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  8. Should I drop my 401k with Amazon for stocks in KO? (25/03/2021 - Reddit Stocks)
    I have a lot I could say but I'd like to keep it brief as I can. I make only a fair income and I would like a long term solution for a nice retirement through stocks that will pay big in the long run. My problem with my 401k is it can't make me passive income. Ideally I would have passive income through dividends and retire before 64. If you are knowledgeable about the KO stock, what advice would you give me about this?   submitted by   /u/STRAIGHT_BI_CHASER [link]   [comments]
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  9. How I’d aim to make £90 a month in passive income by buying dividend shares (16/06/2021 - The Motley Fool UK)
    Passive income is money one receives without working for it. Passive income isn’t necessarily about funding a luxurious lifestyle of beach holidays and Ferraris. It can be as simple as a little more money each month to help pay a mobile phone bill or cover a fancy meal out with a loved one. Here’s how I would plan to make £90 a month in passive income, by investing in dividend shares. What are dividend shares? Shares are effectively fractions of a company. When I buy a share, I basically own a tiny bit of that company. If the company generates profits, it can choose to distribute them as dividends. That doesn’t always happen. Companies may keep some funds back to use in their business. But dividend shares are ones that often pay out dividends. Dividends are never guaranteed, which is one reason I try to diversify my portfolio across a variety of shares and business sectors. Dividend shares as passive income I like dividend shares as a form of passive income. Unlike some passive income ideas, there really is little effort involved for me. Once I buy a share, I can sit back and watch the money come in when dividends are paid. I don’t have to set up an online shop. I don’t have to find customers. I don’t have to chase unpaid invoices. Unlike some passive income sources, though, I can’t start earning passive income with no money upfront. To buy dividend shares for passive income, I’ll need to have some money. This can be a lump sum, or it could be something I build up over time by putting a little money each month into a Stocks and Shares ISA. Doing the maths How much would I need to invest to try and generate £90 a month in passive income? That depends how much the shares I buy ‘yield’ – in other words, what percentage of the share price the dividend represents. If I buy shares with a yield of 1%, I’d need to invest £108,000 to generate £90 in monthly passive income. But if the shares yield 5%, I’d only need £21,600. Higher yields aren’t necessarily better, though. They can also be a danger signal that the market is worried a company’s payout level is unsustainable, for example, due to future profit declines. I never buy shares based on yield alone. I do some research to help me understand a company’s future prospects. Choosing the passive income ideas I’d try to reduce my risk by diversifying my share picks. But I would focus firmly on dividends. So, for example, there may be shares I think have growth prospects but don’t pay dividends. For passive income, I wouldn’t buy them. By contrast, I’d be willing to invest in companies that I think have limited growth prospects, such as National Grid and Imperial Brands, because of their attractive dividend yields. Using the average yield of 5% example above, I’d be looking to buy less than £22,000 worth of shares. I’d split the money between at least five business sectors for diversification, and choose no more than two companies in any one sector. Here’s an example of a passive income portfolio I could build on that basis. The post How I’d aim to make £90 a month in passive income by buying dividend shares appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading Here’s why I’m not buying Lloyds shares What’s going on with the Sareum Holdings share price? What’s going on with the Synairgen share price? What’s behind the Bitcoin price boost? Are BT shares worth buying? Christopher Ruane owns shares in Imperial Brands. The Motley Fool UK has recommended Imperial Brands and National Grid. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  10. Passive income ideas I’d use to try and earn £100 a month (19/05/2021 - The Motley Fool UK)
    Passive income is money that comes in without needing work. The concept sounds attractive to me – but passive income ideas are not always as easy as I’d like. I don’t fancy the potential hassle of setting up a drop shipping scheme or devising a digital course. Instead, I simply invest in shares. Targetting £100 a month Let’s say I wanted to earn £100 a month. That would need dividends of £1,200 or so a year. As dividend payment times vary, I’m talking about £100 as a monthly average, not a payment of £100 each and every month. The FTSE 100 yield has hovered around 3.5% on average over the past couple of decades. At that rate, I’d need to invest around £34,000 to generate £100 of dividends per month. That is quite a large capital outlay upfront. However, some shares offer a higher yield than this average. By investing in such passive income ideas, I could try to generate £100 a month using less capital upfront. Balancing risk Sometimes, shares offer a high yield for a reason. Maybe the market doesn’t think they can sustain their payout levels, for example. When picking my passive income ideas, I wouldn’t just focus on historical dividends. I’d look at what I thought a company could pay in future. Additionally, I’d seek to diversify across different companies and sectors. High-yield tobacco Tobacco shares often have high yields. Partly that reflects the strongly cash generative business model. But I think it does also point to concerns about the durability of customer demand. Lower cigarette sales risk smaller revenues and profits. I’d still pick British American Tobacco for my passive income stream, though. The company offers a strong brand portfolio, massive cash flows, and a progressive dividend policy. It currently yields 7.6%. So putting in £6,150 should generate almost £39 of dividends per month for me. Financial services Next on my list of passive income ideas is financial services name M&G. The well-known financial services brand grew its dividend this year. With a yield of 7.7%, £6,150 invested in M&G shares would give me a prospective yield of around £39.50 monthly. One risk is any financial downturn, which could reduce demand and profitability in the business. Passive income ideas on my shopping list My third passive income idea would be supermarket operator Tesco. At 4.3%, its dividend yield is lower than my other two choices. That would still come out to about £22 a month on average from dividends. Tesco has the largest market share of any UK supermarket. As well as an extensive store estate, it has been building its online operation rapidly. But an intensely competitive market risks lower profit margins in future. Putting my passive income ideas into action For £18,450 today, I could set up a passive income stream equivalent to £100 a month. What’s more, I only need to pay once for the shares. But if the companies keep paying out dividends in future, my passive income stream could continue indefinitely. Dividends are never guaranteed, though. There is a risk that they could be cut or cancelled. Imperial cut its last year, and Tesco stopped dividends for several years before restarting them in 2018. Dividends are often paid quarterly or biannually, so I wouldn’t expect the passive income to be received every month. If monthly timing is important, I could set up a passive income stream designed around that objective. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 1 FTSE 100 investment trust from my best stocks to buy now list I was right about the Lloyds share price. Here’s my outlook now How I’d invest £500 in UK shares How much can you earn on Universal Credit 2 UK shares to buy now for June christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use to try and earn £100 a month appeared first on The Motley Fool UK.
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  11. Realistic passive income ideas I use (16/02/2021 - The Motley Fool UK)
    Passive income is money one receives without working for it each time. Writing a novel, producing a movie, or owning thousands of acres of farmland could all generate passive income. But these aren’t realistic passive income ideas for a lot of us. Similarly, for a lot of people, setting up an online business or becoming a digital nomad aren’t realistic passive income ideas. I prefer passive income ideas that require very little of my time and are genuinely passive. How I earn passive income My favourite way to earn passive income is putting some money regularly into a Stocks and Shares ISA and using it to invest in dividend yielding companies. That really is passive. I can just sit back and wait for dividend income to start rolling in. My approach to realistic passive income ideas extends to my choice of shares too. While emerging technologies could do well in the future, they could also flop. So for income, I prefer to focus on companies that operate in well-established markets. With fairly predictable cash flows and proven business models, they are more likely to provide the sort of income stream I am looking for. An example is Diageo. Its portfolio of drinks brands offers some diversification. Meanwhile, its finely honed business model has seen it raise its dividend each year for over three decades. The yield of 2.3% isn’t great – but with the company’s strong cash generation and dividend history, I think it is fairly secure. Of course there are risks, such as a downturn in alcohol consumption by health-conscious consumers. But for now, Diageo is the sort of passive income pick I’d be happy to hold. Realistic passive income ideas can be simple Passive income ideas don’t need to be sophisticated or hard to copy. For example, buying shares in British American Tobacco is not exactly a novel idea. But it is still one of my favourite passive income ideas. The tobacco giant owns brands such as Lucky Strikes and Gauloises. That gives it a lot of free cash flow and helps support a dividend yield of over 7%. No dividend is ever guaranteed. But with over twenty years of dividend increases behind it, BAT is one of the realistic passive income ideas that clicks with me. In terms of risks, tobacco usage is going down in some markets, and the stocks does not align with the growing trend toward ethical investing. The insurance business is straightforward and unexciting. But that can be good for its reliability as a source of passive income. Legal & General shares yield 6%, which would be a very agreeable passive income for me. They continued to pay throughout the pandemic. The company has also set out a policy to keep increasing dividends for the coming few years. That depends on performance ultimately, but I feel confident in L&G’s expertise. Some of the most realistic passive income ideas can be some of the most ordinary and dull. That isn’t a bad thing in my opinion. Rather than rely on hare-brained or unproven schemes, getting regular passive income from stable, well-established companies strikes me as an easy step to more financial success. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Should I buy airline stocks today? Here’s my view on the struggling sector What is a double-dip recession? The Royal Mail share price is rising – should I add the stock to my portfolio? Stock market rally: should I buy Vivo Energy shares? Stock investing: one of the best FTSE 100 shares I’d buy today christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended Diageo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Realistic passive income ideas I use appeared first on The Motley Fool UK.
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  12. How I would earn passive income for the cost of a takeout coffee each day (26/02/2021 - The Motley Fool UK)
    Lockdown has been difficult for many people. But one small positive thing is it has enabled a lot of us to do things differently and make some positive changes. For example, during lockdown I have had more time than normal to work on my passive income ideas. When things get back to normal, instead of spending a couple of pounds each day on an expensive coffee I don’t need, here’s how I will put that money into passive income ideas instead. Some investment beats no investment Passive income is really only passive in my opinion if it involves no work. But income for no work usually requires some capital. It is easy to think that a lot of capital would make everything easier – and in some ways it likely would! But passive income seekers tend to be self-starters who want to make the most of their situation. So what if one has no capital to start? Putting aside just a couple of pounds a day soon adds up. Why buy the coffee when one can buy shares in the coffeemaker? That’s possible – while Costa owner Coca-Cola and Starbucks are American companies, UK-listed coffee sellers include Greggs and Wetherspoons. But as passive income ideas, I wouldn’t be looking at either of those names right now. That’s because the hospitality industry has been hard hit by lockdown. Wetherspoon made its first loss in decades, and like Greggs it suspended dividend payouts. Instead, for income I’d look at companies whose income streams aren’t needed to fix pandemic damage to their business and instead can be used for dividend payments. Consider as an example Legal and General. The company has taken a pause in increasing dividends for a year, but it hasn’t stopped them. The general insurer plans to restart increasing dividends and keep clicking them up for the next few years. Even if the business environment worsens and makes that difficult, the shares currently yield 6%. That makes it attractive to me among passive income ideas. Passive income ideas and timing Legal and General pays a couple of times a year. That might not make it as attractive as other passive income ideas which pay more regularly. For example, British American Tobacco and Unilever pay out four times a year. Their dividends are split evenly, whereas some other quarterly payers like Imperial Brands pay out two larger and two smaller payments over 12 months. For some people that might not matter, but if payment timing is important then it can be worth looking into it when considering passive income ideas. For example, if I was foregoing my fancy coffee each day and hadn’t received a penny of dividends seven or eight months later, my will to keep hunting for passive income might wilt. Starting to see passive income coming in on a fairly regular basis would be positive reinforcement for me foregoing overpriced coffee and putting a couple of pounds each day into a Stocks and Shares ISA instead. Once life gets back to normal, everything doesn’t have to go back to the way it used to be. Instead of poring over a menu of overpriced brews, I’d rather focus on discovering underpriced passive income ideas. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading This is why FTSE 100 stock IAG’s share price is flying right now What’s considered fair in a divorce settlement? Can the BP share price rally if the US follows through with this pivotal agreement? FTSE 250 stock Aston Martin sees extreme share price volatility. Should I invest? Warren Buffett letter investment lessons led me to buy this share christopherruane owns shares of British American Tobacco, Imperial Brands, and Unilever. The Motley Fool UK owns shares of and has recommended Starbucks. The Motley Fool UK has recommended Imperial Brands and Unilever and recommends the following options: short April 2021 $110 calls on Starbucks. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I would earn passive income for the cost of a takeout coffee each day appeared first on The Motley Fool UK.
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  13. Passive income ideas I’d use for £20 a week (08/04/2021 - The Motley Fool UK)
    Passive income ideas can be easy to find. But I find they are not created equal. For example, many involve a lot of effort. So I don’t really see them as passive. Others simply don’t produce much income. Instead of dabbling in those sorts of passive income ideas, I prefer to invest a small amount of money regularly in a Stocks and Shares ISA. I target shares paying dividends to provide a source of passive income. Here are some passive income ideas I’d use for just £20 a week. Buying into products I use Sometimes there’s a product I really like. It makes me think it could be an attractive business to own. Take Guinness for example. The iconic stout is in a league of its own. While there are other stouts and porters, I believe Guinness has a unique brand image and loyal following. That gives its owners – listed company Diageo (LSE: DGE) – the opportunity to sustain or even improve profit margins. It also suggests a long future for the brand. Diageo’s dividend yield is about 2.2%. That isn’t massively attractive to me, but it would be income. Say, for example, I put away £20 a week for a year in Diageo. That would give me over £1,000 to invest. I’d expect £22 in dividends each year in future.  Interestingly, Diageo has raised dividends annually for over three decades. That could suggest higher future income, though dividends are never guaranteed. They can be cut or cancelled at any time. Other risks include a decline in alcohol consumption by health conscious consumers, and increased competition from new products like hard seltzers. High-yield passive income ideas I’d try to reduce my risk by diversifying across multiple shares. Saving £20 a week, it might take some time to do this but as soon as I could, I would. Looking for passive income ideas, I’d also scan high yielding shares. These could produce a more substantial passive income because their dividend payouts are higher. For example, tobacco stocks often offer higher yields than the wider market. But a high-yield can also be a warning signal. For example, maybe the market is pricing in risks. For tobacco, that could be a decline in smoking or future regulatory tightening. For high-yielding miners, it could be the anticipation of cyclical price falls, for example. So there are risks in a tobacco stock like Imperial Brands. Nonetheless, with a yield of 8.9%, it is one of my favourite passive income ideas. Long-term focus Whether it’s a possible £22 a year from Diageo or £89 a year from Imperial Brands, the numbers might sound fairly small at first. But part of the reason I am attracted to putting £20 a week aside to generate passive income is the cumulative effect. £20 a week isn’t a massive amount for many people. But over time, it adds up. If I had invested in Diageo 30 years ago, for example, I would have enjoyed growing passive income from that holding every year since – even if I didn’t put any more money in after the first year. If I had kept putting aside £20 a week, the passive income would have been even greater. That won’t necessarily be true in future. But with the right passive income ideas to hand, I am hopeful I can turn £20 a week into a lifelong passive income stream. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading 1 top growth stock for April 2021 The Moderna share price: have I missed the boat? How much rent will Universal Credit pay? 2 cheap penny stocks I’d buy in my ISA for the new bull market This is what I’d do about Tesco shares right now christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Diageo and Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use for £20 a week appeared first on The Motley Fool UK.
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  14. Passive income ideas I’d use to generate £100 a week (17/04/2021 - The Motley Fool UK)
    Investing in stocks and shares is, I believe, one of the best ways to generate a passive income. Indeed, it’s possible to start investing in shares with just £50 a month. Other strategies to generate a passive income require tens of thousands, or even hundreds of thousands, of pounds upfront investment.  Investors also have lots on offer when it comes to choice. For example, I can choose to own a portfolio of income funds, or single stocks in different sectors.  And with that in mind, here are several passive income ideas I think would be great ways to invest £100 a week.  Passive income ideas I believe the renewable energy industry is one of the most exciting areas of the market right now. There are a couple of businesses in the sector I’d buy to generate a passive income. The first is the Gore Street Energy Storage Fund. This is unlike any other business on the market. The company buys and builds facilities to help the electricity grid manage renewable energy supply and demand. Some of the profits are reinvested back into the business, with the remainder returned to investors. At the time of writing, the stock supports a dividend yield of 6%. A company following a similar strategy is Greencoat Wind. However, rather than investing in energy storage facilities, this business buys and builds wind farms. It currently offers a dividend yield of 5%. Both of these stocks are changing hands for around £1 each. That means investors can buy these passive income investments with just a few pounds. Of course, they aren’t risk-free. As the renewable energy industry grows, companies are throwing money at new projects. This suggests Gore Street and Greencoat will see lower returns on their assets going forward if they have to pay higher prices. This could have a knock-on effect on profit margins and cash returns to investors. Still, as a way to generate a passive income and invest in the renewable sector at the same time, I’d buy these stocks.  Funds for income  An alternative way to generate passive income is to invest in income funds and investment trusts. I believe this allows me to access the best of both worlds. I can own funds managed by some of the City’s best fund managers, which control a diversified portfolio of income stocks, as well as picking my own favourite income plays.  There are a couple of funds I’d buy to generate a passive income. The City of London investment trust currently offers a dividend yield of 5%. Meanwhile, the Murray Income Trust yields 4%. Both of these trusts own a diverse portfolio of income stocks, which removes the need for me to pick individual investments. The downside of these trusts is investors have no control over the companies they own, and management fees can be high. These two trusts charge 0.4% and 0.6% in annual management fees respectively.  These downsides aside, I’d buy both stocks for my passive income portfolio today.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading 2 things more important to house hunters than location now 5 passive income streams I’d consider using now I think these 2 FTSE 100 stocks might be among the best shares to buy today The Lloyds share price is rising, but I’d buy these stocks instead The Tesco share price is falling: should I buy now? Rupert Hargreaves owns shares in the Murray Income Trust. The Motley Fool UK has recommended Greencoat UK Wind. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use to generate £100 a week appeared first on The Motley Fool UK.
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  15. Passive income ideas I’d choose without learning new skills (09/02/2021 - The Motley Fool UK)
    Passive income can sound like a great idea – receiving money without having to work hard for it. While that may sound too good to be true, it’s a reality for millions of people. Landlords, share owners, musical copyright owners are all used to receiving regular payments without the grind of work each time. There are lots of passive income ideas. But some involve setting up new, unproven businesses, or learning a new skill set. I don’t think that’s really passive – it sounds like a lot of work! I prefer to focus on passive income ideas I can use without learning new skills like “dropshipping” or programming. I’d invest regularly I’d earn income by investing money in a Stocks and Shares ISA and using it to buy shares. That could be with a lump sum. But if I didn’t have any money to start, I’d simply start putting aside a few pounds a week to get going. Passive income ideas can still generate income, even without a lot of capital. Then I would start looking at shares I could buy in my Stocks and Shares ISA. To make this as passive as possible, I’d focus on companies I already knew and had an opinion about. For example, most people will need to do some research to understand the details of an industrial company like Victrex or ITM Power. But I already know companies like Greggs, Domino’s Pizza, Tesco, and Trainline from my own experience as a customer. So to keep things passive, I’d focus on my own area of knowledge. One thing to note, though, is that a good business doesn’t automatically translate into a winning investment. A company could be saddled with debts, or maybe it’s so popular that investors have driven the share price up high. For example, I think the Trainline business is easy to understand. But I wouldn’t invest in it because I think it’s overvalued. Its market capitalization (the total value of all shares) is over £2bn, but train demand is currently low and may take years to recover. The company has a leading brand and many investors obviously see it as poised for recovery. But I think I can discover more reliable value elsewhere. So while I’d pick names I was familiar with, I’d still do some research upfront to see how financially attractive a share might be. Passive income ideas need to pay income I’d then sort through my shortlisted companies to see which paid out money to shareholders. Many companies keep money in their business to help it grow, instead of paying it out to shareholders. That’s what a company in its growth phase like Trainline does. That doesn’t mean it’s a bad investment, but for passive income, I’d seek out shares that pay excess cash to shareholders as dividends. For example, Domino’s currently yields 2% and Tesco 3.7%. That means that for every £1,000 I put into Tesco I could expect around £37 a year in passive income. Of course, dividends aren’t fixed and can be cut or scrapped altogether. So I’d try to diversify my portfolio. But over time, by focussing on companies I already know and like, I’d expect these passive income ideas to start generating an agreeable passive income stream. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The dizzying links between income and mental health and what you can do about it 3 steps I’d take when buying dividend shares for income in 2021 Are value or growth shares best to buy for 2021? UK share investing: why I’d ignore Lloyds and buy these 2 cheap FTSE 100 shares UK stock investing: one of the best dividend shares I’d buy right now christopherruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Dominos Pizza, Tesco, and Victrex. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d choose without learning new skills appeared first on The Motley Fool UK.
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  16. Passive income ideas I’d use for the cost of a beer each day (28/04/2021 - The Motley Fool UK)
    With summer weather appearing more often and pubs no longer mothballed, it is tempting to round off the day with a glass of something refreshing. Whether it’s an ale, chardonnay, or a fresh fruit juice, this small daily indulgence can feel rewarding. But for the price of a daily tipple, I think some passive income ideas could generate extra money for me – without having to work for it. Here are a few such passive income ideas I could use with around £5 a day. High-yield shares One of my favourite passive income ideas is to invest some money into shares with a high yield. The dividend payouts can soon add up. For example, if I put £5 a day into British American Tobacco shares, I’d be investing roughly £150 a month. With its current yield of 7.8%, that means that after a year of investing each day, I’d be looking at a prospective passive income stream of around £140 each year from my initial outlay. With its wide portfolio of brands and global geographic exposure, BAT allows me to benefit from the profitable tobacco industry. One risk is declining usage in some markets. However, just today the company announced that it remains on target to meet its revenue and profit targets for this year. Dividends are never guaranteed and one of my key risk management principles is diversification, so I would look for other passive income ideas I could use alongside BAT. Strong dividend growth One such name is Judges Scientific. The company specialises in the manufacture of high precision scientific instrumentation for users such as labs and research institutes. With a yield of just 1%, this company offers far less passive income than an equal investment in BAT. So why would I also consider Judges for my list of passive income ideas? The reason is its history of strong dividend growth. It has doubled its ordinary dividends over the past five years. Even in the midst of the pandemic last year, it boosted its ordinary dividends by 10%. It also sometimes pays special dividends, for example declaring a £2 special dividend in 2019. I think the company can continue to grow profits and sustain a growing dividend. Its customers need accuracy from their instruments, so are willing to pay a premium price for quality. With revenue of just £80m, I see lots of potential growth for the company. However, the pandemic led some labs to close, which damaged sales somewhat. That could happen again. Other risks include increased competition from other suppliers damaging profit margins. Passive income ideas without the work Another approach I’d consider would be to think about possible passive income streams, then see whether a listed company already uses that idea. For example, a popular passive income source is selling items online. But I don’t think I can compete with the experts when it comes to this. Retailer Morrisons sells online including through Amazon. It yields 4.1%. Rather than trying to set up my own online shop, I could simply drip feed my daily beer money into Morrisons shares. One risk with Morrisons is reduced profit margins due to a very competitive marketplace. For example, the rise of discounters like B&M has increased pricing pressure. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading The Rolls-Royce share price has fallen. Should I buy? The Saga share price is rising: should I buy now? The Lloyds share price is headed back to 50p. Would I buy it? Autumn holiday bookings surge amid summer travel uncertainty Is penny stock Quadrise Fuels (LSE:QFI) a good investment? John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. christopherruane owns shares of British American Tobacco. The Motley Fool UK owns shares of and has recommended Amazon. The Motley Fool UK has recommended Judges Scientific and Morrisons and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use for the cost of a beer each day appeared first on The Motley Fool UK.
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  17. 5 passive income ideas I’d use (22/05/2021 - The Motley Fool UK)
    My list of passive income ideas includes investing in shares. That way I can sit back and enjoy any dividends which come my way, without needing to work for them. Here are five shares I would consider buying today to boost my passive income streams. Passive income from financial services Insurer and financial services provider Legal & General has a dividend yield of 6%. Better still, it has set out plans to increase payouts over the coming four years or so. There is never a guarantee of future dividends, but I take that as a positive statement of intent. I think the company’s business could benefit from excess savings some people have amassed during lockdowns. Any economic boom could also lift demand for financial services, which might boost revenues. Risks include price competition — some lines of insurance are notoriously cyclical and lower premiums could hurt profits. Tech choice for passive income UK software company Sage specialises in accounting tools for small and medium-sized enterprises. I think that is an attractive niche. There is a clear need and once customers start using the software, moving to a different platform would incur time and effort. Sage shares currently yield 2.6%. The company has raised its dividend each year for two decades. Risks include a transition from physical installations towards cloud operations. That could incur additional costs and so hurt profits. Energy choice UK oil major BP has been reorienting itself towards alternative energy in its future product mix. Last year it cut its dividend. So why would I have it as one of my passive income ideas? Despite the cut, the company still offers a yield of 4.7%. While it has ambitions outside of fossil fuels, I also feel sure that it can continue to pump oil for many years yet. As it pays its dividends in dollars, one risk for a UK income investor like me is any negative swing in the exchange rate. High-yield passive income Yielding over 7%, I think British American Tobacco earns its place on my list of passive income ideas. The owner of brands such as Lucky Strike is a cash generation machine. Like Sage, it has a record of raising dividends annually for the past couple of decades. A risk is declining demand for cigarettes in some markets, which could hurt profits and revenues. Passive income blue chip Like BAT, Diageo has a long history of dividend raises – in its case, over more than three decades. As the owner of brands such as Baileys and Talisker, it enjoys premium pricing power. The company recently restarted its share buyback programme. I take that as a sign of management confidence. The 2% yield is the lowest on my list, but I like the quality of its portfolio. For many drinkers, there is no substitute for their preferred tipple. I think that should help Diageo do well even if it decides to trim its marketing and sales costs. One risk which does concern me is its heavy focus on alcohol. As consumers consider healthier lifestyles, that could lead to falling sales. The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Best shares to buy: I’m building my portfolio around these 4 stocks 5 UK shares to buy with £5k 3 of the best cheap UK stocks to buy today 5 renewable energy stocks to buy The Fresnillo share price looks cheap to me. I might buy christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended Diageo and Sage Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 5 passive income ideas I’d use appeared first on The Motley Fool UK.
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  18. How I’d earn passive income for £100 a month (15/05/2021 - The Motley Fool UK)
    Passive income is exactly what it sounds like. Money that comes in – without having work for it. That might sound too good to be true. But examples of passive income abound, from inheritance trusts to people who rent out their empty parking places. Here is my plan to earn passive income by putting aside just £100 a month. Shares as passive income ideas With £100 a month, I’d start saving regularly in a Stocks and Shares ISA. £100 a month might not sound that much. But it adds up to a four figure sum each year. That’s enough for me to start generating passive income streams. Just putting money away wouldn’t earn me passive income, though. That’s why I’d start to invest in shares. To maximise my passive income streams, I would look for high yielding shares. These are stocks where the dividend is large relative to the share price. Passive income example For example, today I could buy a share of British American Tobacco for around £28.32. This year its dividend payout is 215.6p. That equates to a dividend yield of 7.6%. In other words, if I put £100 into BAT shares this month, I would expect to receive £7.60 over the coming year. I’d also receive any dividends declared in future after that. I’d still own the shares. I could sell them in future if I wanted, though might not recoup my purchase price. Risks But things might not work out that way. For example, BAT has paid out a growing dividend since the turn of the millennium – but that is no guarantee of future dividends. Dividends are funded by cash flows. While BAT’s brands such as Lucky Strike allow it to generate meaty cash flows, smoking is declining in many markets. BAT also has a lot of debt it needs to service, eating into free cash flows. To help lower risk in my passive income plan, I’d diversify. That involves spreading my risk by investing in different shares, across a range of sectors. Identifying high yield shares How can I discover high yield shares? A lot of information sources publish historical share yields. But to generate passive income my interest is in what a share’s future dividends might be. Past dividends are not a reliable guide to future ones. Take GlaxoSmithKline, for example. The pharma company currently yields 5.8%. For a blue chip name that is attractive. But a little research reveals that GSK has already indicated a likely reduction in its overall dividend level when it splits into two companies soon. I try to avoid what might be a ‘value trap’. A value trap can be dangerous for unwary investors. Historical data can make it look attractive, but future prospects can be sharply different. That is why I always research my income picks, to try and identify any signs of a possible value trap. I focus on future passive income prospects, not purely historical data. Compound effect and passive income Over time, if I keep putting £100 each month into new passive income ideas, I will add more shares to my portfolio. But I would also hope for regular dividends. Instead of spending this income, I could combine it with my monthly £100 when buying more shares. That compound effect should help my portfolio grow over time – and the passive income will hopefully also increase. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading I like these FTSE 100 shares with 5%+ yields for passive income Beyond Meat isn’t the only ‘green’ stock I’d buy for my ISA today! Responsible investing: a stock I might buy for the ‘green revolution’ 2 of the best cheap UK shares to buy now! As the Rolls-Royce share price remains cheap, I’d invest £3k christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’d earn passive income for £100 a month appeared first on The Motley Fool UK.
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  19. Passive income ideas I’d use for the price of car insurance premiums (27/02/2021 - The Motley Fool UK)
    The freedom of the open road has a lot of allure, especially right now. Another form of freedom which appeals to me is not having to work for every pound I earn. That is where I start to think about passive income ideas. Passive income is money that comes in without having to work for it. If that sounds too good to be true, think about the last time you filled up at a petrol station. The attendant was there helping you, likely getting paid for every hour they worked in the petrol station. But the petrol station owner may not have had to lift a finger for years, instead receiving regular rental payments from the petrol company. It may take a lot of money to buy commercial property like a petrol station. But not all passive income ideas need be so expensive. For example, drip feeding money regularly into a Stocks and Shares ISA can be a structured way to start building up funds with which to invest. That can generate a passive income. Best of all in my view, one doesn’t need to start with a single penny beforehand. Just putting in a small amount each month can form the base of future passive income. The average British car owner spends about £38 a month on insurance — a little more than a pound a day. Profiting from car insurance Think about your daily expenses. Each month, for example, millions of British drivers pay out for car insurance. No matter how tight things may seem financially, they pay to protect themselves and others when they drive. Similarly, putting aside £38 a month could form the basis of some passive income ideas. Insurance can be a very lucrative business. But most drivers are only on one side of the equation. They pay money to insurers, but it is the insurers who profit from such situations. Savvy motorists may be in an insurance co-operative which shares profits between its members. But there are other passive income ideas based on motor insurance. One is to invest in shares of the insurer. Some leading insurers pay out attractive levels of dividends. For example, currently Legal & General pays out 6.8%. Direct Line pays out 2.3%, which is less attractive to me, although I think diversifying across different passive income ideas can be a good way of reducing my risk. Just as a safe driver can be involved in an unexpected accident, a well-run company can also fall foul of unforeseen business shifts. Passive income ideas beyond household names Those are household names but there are other insurance-related shares which also merit investigation in my view. For example, Sabre Insurance is an insurer yielding 5.2%. Its focus is squarely on the motor insurance market. That could be good or bad over time – more diversified insurers such as Legal & General are somewhat protected against downturns in premium prices for motor insurance. But equally, when the premium cycle turns upward, they reap less of the benefit than a pure play motor insurer. The insurance market tends to be cyclical, and when premiums turn down, than can negatively affect all motor insurers. With enough road ahead, however, I think putting away the cost of car insurance each month into passive income ideas can be a rewarding drive. I’d start filling up immediately! A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading What might this director sale mean for the Judges Scientific share price? 2 cheap UK stocks to buy now What is a conservatorship? Will the Rolls-Royce share price reach 150p? Should I buy Tesla shares after the US tech sell-off? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use for the price of car insurance premiums appeared first on The Motley Fool UK.
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  20. How I would earn passive income with £50 a week (10/02/2021 - The Motley Fool UK)
    Passive income, or money one receives without working for it, has obvious appeal. Rather than having to work for every pound, at least some of one’s income arrives by cheque or bank deposit without having to lift a finger. A lot of passive income ideas seem a bit far-fetched to me. Instead, I prefer the simple option of putting a bit of money away regularly in a Stocks and Shares ISA then investing it in dividend-paying shares. Here’s how I would start to build a passive income stream by putting aside £50 a week. Set an income target If someone starts a new job, they usually have an idea of what sort of salary they want. It can be useful to apply the same sort of discipline to passive income. Deciding what sort of income one wants can inform your investing strategy. Some companies pay fairly low dividends but have a long record of dividend increases. For example, Spirax-Sarco yields just under 1%, which isn’t attractive to me as an income hunter. What is attractive, however, is that the company has increased its dividend annually for over half a century. That doesn’t mean it will keep doing so, but it is an encouraging sign that the company is committed to dividends. Energy group DCC doesn’t have Spirax-Sarco’s half century of raising dividends, but it has nonetheless raised payouts annually for over a quarter of a century. At 2.5%, its yield is more attractive than Spirax-Sarco’s. I think both companies are well-run and have attractive business models, so would hope for future income from either. By contrast, a higher income target might lead one to higher-yielding passive income ideas. British American Tobacco yields almost 8%, for example. But its core market of smokers has an uncertain future, and it wouldn’t appeal to all investors. Similarly, Evraz yields 11%. But it is in the cyclical mining industry, which makes me wonder whether it will pay out at such a rate in future. Sometimes, higher-yielding shares pay out big dividends for a reason: they have limited new opportunities in which to invest excess cash, for example. Sometimes a high dividend is a signal the market expects lower returns in future. But the market isn’t always right. So, if one’s target income is high, it can be worth looking among the higher-yielding shares to see if any seem more likely to continue offering passive income at the right level. Two passive income ideas I’d buy I think British American Tobacco is such a share. Its 7% yield reflects investor concern about the future of the tobacco market. In developed countries, fewer people are smoking and that could hurt revenues. However, smokers are willing to pay a lot for cigarettes. That gives the company pricing power. With its portfolio of strong brands, long experience, and agreeable yield, British American Tobacco is one of the passive income ideas I’d tuck into my portfolio. I would also pick Legal & General. The well-known insurer’s shares yield just under 7%, which is still an attractive income stream for me. While the financial market can be volatile, Legal & General’s strong brand should help build customer loyalty. It’s another of the passive income ideas I’d pick to sit back and start earning. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Rolls-Royce share price: could the company be a Tesla competitor in the future? This FTSE 100 stock yields over 5%, making it a great passive income opportunity! Should I sell my Diageo shares today? Argo Blockchain: exciting or irrational? 1 FTSE 100 stock from my best shares to buy now list christopherruane owns shares of British American Tobacco. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I would earn passive income with £50 a week appeared first on The Motley Fool UK.
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  21. Help a newbie out (09/03/2021 - Reddit Stock Market)
    Greetings fellow humans I am a med student so i don't have time to make money (start a business or have a job) i want something with a passive income and i have some money accumulated and i always hear from people that the worst thing to do with your money is not investing it i was wondering what to invest that money in and i did some research and found a company called PGI global that you get a passive daily income of 0.5-3% of your investment so i thought that is too good to be true So long story short should i do it or are there better places to invest my money in? Whats your advice? What do you suggest? Thank you for your time   submitted by   /u/Mstafa-K [link]   [comments]
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  22. Passive income investing: 2 ways I can make £450 a month (02/04/2021 - The Motley Fool UK)
    To supplement the stocks that I own for the purpose of capital growth, I like to hold stocks that generate income. In this way, I can focus most of my efforts in trying to generate outperformance on the active side of my investing ideas. The passive-income investing side (once up and running) should require only a little attention to work well for me. Here’s a few ways that I can get dividend stocks to help me out. A lump sum The first way I can go about passive income investing in via a large lump-sum investment. For example, let’s say I get an inheritance windfall or have sold my house and am downsizing. This surplus amount can go straight into dividend shares that can offer me regular income.  Making £450 a month this way would be fairly simple. If I assumed I could get an average dividend yield of 6%, then I’d need to make £5,400 a year. To generate this, I’d need to invest a lump sum of £90,000.  This probably isn’t the most popular way to go about passive-income investing, as such events to accumulate a large amount of money in one go are slim. But if this happens to me, it’s definitely a viable way to make things work. The benefit of this idea is that I get to put all the money to work in one go. The downside is that I’m overly concentrating my focus purely on dividend stocks. A wiser idea in my opinion if I had such a lump sum would be to put half of it in dividend stocks, and use the other half for other ideas. Passive income investing in chunks A second way I can get to £450 a month via passive income investing is by buying dividend stocks each month. I won’t be able to generate sizeable dividend income straight away, but it will build up over time. For example, let’s say I invest £1,000 each month into stocks I am positive on. I’ll assume again that I can get around a 6% dividend yield on average. I’ll also presume that I reinvest any dividends I get paid. In this case, it would take me just over six years to achieve my goal. At this point, my investment pot would be at that £90,000 figure, allowing me to then enjoy the £450 a month on average from passive-income investing. The benefit of this idea is that I can manage my cash flow better. Putting away a chunk every month is an easier way for me to manage my finances, and puts less stress on it. The downside is that I will need to wait for several years before I get to start enjoying the passive income.  I can solve for this by not reinvesting the dividends, but this will lengthen the time by a year and a half.  Whichever way I decide to invest, it’s clear that I can make a success of passive-income investing, and make it work for me. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading 5 penny stocks to buy for a Stocks and Shares ISA 2 UK dividend stocks I’d buy to try and average £200 a month in passive income What is a store credit card? Why I’d buy Next shares now Why the easyJet share price doesn’t tempt me Jonathan Smith has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income investing: 2 ways I can make £450 a month appeared first on The Motley Fool UK.
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  23. How I’m investing in dividend stocks to aim for £100 a week in passive income (07/06/2021 - The Motley Fool UK)
    Dividend stocks are one avenue that I like to use to generate passive income. Passive income enables me to earn money without having to put high levels of effort in. So I can continue to try to make profits from more active stock picking that require more research. When I blend the two together, my overall pot should be able to work harder for me than just doing one or the other. Passive income from dividend stocks One element that makes dividend stocks appealing for passive income is the yield. Technically I make passive income from my Cash ISA, but the amount is negligible. For companies that pay out a dividend, the income can be generous.  The way I calculate this is by looking at the dividend per share paid out relative to the price of the share. This is known as the dividend yield. The higher the yield, the more I’m squeezing the lemon.  I do need to be careful about high yields, as sometimes it can be too good to be true. A falling share price might inflate the dividend yield for a period. But the struggling company (hence the share price fall) might have to cut the dividend in the future. This would then reduce the dividend yield. So to make sure I get sustainable passive income from dividend stocks, I want to be sensible. The FTSE 100 average dividend yield sits just below 3%, which I think is still attractive. By being selective, I’d be happy targeting a yield of 5% without having a very high overall risk level. Crunching the numbers With a sustainable dividend being paid out into the future, I can now turn my mind to thinking of numbers. Let’s say that I want to make £100 a week on average in passive income from dividend stocks. It has to be an average as dividends often get paid once or twice a year. Even if I bought a dozen stocks, I’d struggle to get a payment each week! From here I just need to plug in the numbers and work backwards. I know my yield is 5% and my end goal is £100 a week (£400 a month). For a lump sum investment, I’d need to buy shares totaling £104,000. This sounds a lot to buy in one go. An alternative way could be to build up to the passive income target from dividend stocks. I could invest £1,000 a month, reaching my end goal just after seven years. From my point of view, working away at my goal for a few years to avoid a huge drain on my liquidity makes sense. So I’d prefer to do the second option. Either way, I can show that making good dividend income in a passive way is possible.  One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading American Express Shop Small is back: how can you make the most of it? Property prices are soaring! Should I buy top UK property stocks now? Where will the Shell (RDSB) share price go in June? The 2 best dividend stocks paying 7% today 2 hot UK mining stocks to buy today jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’m investing in dividend stocks to aim for £100 a week in passive income appeared first on The Motley Fool UK.
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  24. Strategies on cash backed put options (31/03/2021 - Reddit Stock Market)
    I’m reading up on options writing and learning from various yt channels. So as a result, my somewhat newbie kind of mindset makes me believe that writing cash backed puts is the way to go for steady income generating, as compared to a more passive income and dividend focused portfolio approach. Armed with this semi-knowledge, I’m now wondering how to best build a strategy around this. What kinds of patterns to look for in a stock, for example. I also think timing is important. Would really like to find out what others are doing in this area and how it compares to their passive long term allocations.   submitted by   /u/Timstertimster [link]   [comments]
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  25. Passive income investing: 2 pieces of advice from Warren Buffett (20/04/2021 - The Motley Fool UK)
    Generating income via dividends from stocks is one of the most appealing ways for me to build wealth. There are plenty of ideas out there to look at for passive income investing. And in this regard, I often listen to Warren Buffett’s pearls of wisdom. I tie his ideas in to dividend stocks and income investing, to help me hopefully pick the best ones to reach my goals. Playing the long game As someone who has been investing successfully longer than I’ve been alive, Warren Buffett is clearly someone to listen to. As it turns out, longevity is one of the things that makes passive income investing work. Buffett once said that “someone’s sitting in the shade today because someone planted a tree a long time ago.” What he meant by this is that good things can take time to happen, but the end result is well worth the time. It’s the same with getting dividends from stocks. For example, I might be aiming to make £1,000 a month in passive income. With a small pot to begin with, this isn’t going to happen overnight.  I’ll have to regularly invest small amounts so that over several years, my investment pot will be large enough to give me a yield to equate to £1,000 a month. But once I’ve got there, it’ll be worth the wait. Looking for sustainable passive income  Warren Buffett once commented that “risk comes from not knowing what you’re doing”. This can be applied to many situations in investing, especially when targeting passive income.  The tendency for a new investor might be to simply buy shares in companies that have the highest dividend yields. If it was me, I might reason that I’d  get the highest income that way.  In reality, companies with the highest dividend yields often carry the highest level of risk of a dividend cut. This is because the yield could look high just because the share price is falling. After all, a lower share price makes the dividend per share a larger proportion overall. If I didn’t know this or hadn’t done my research on the share price, I could make a bad call here. To deal with this, I just need to make sure I’m not focused solely on the monetary dividend values for passive income investing. It also needs to be about the company. What are the prospects for 2021? How has the business coped with the pandemic? In this way, the dividends I get paid will be more sustainable, even if it means taking a slightly lower dividend yield. Overall, by looking at the thoughts of Warren Buffett, I can give myself a better shot at making my passive income investing strategy a success. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Can I get a mortgage without a deposit? Should I buy Argo Blockchain shares at the current price? The FTSE 100 has hit 7,000. Here are 4 reasons I think it could rise further 2 cheap penny stocks and 1 FTSE 100 share to buy in my ISA! 2 penny stocks to buy in a Stocks and Shares ISA today jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income investing: 2 pieces of advice from Warren Buffett appeared first on The Motley Fool UK.
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  26. 5 passive income ideas I’d use to generate £5k a year (24/04/2021 - The Motley Fool UK)
    I believe buying stocks and shares is one of the most straightforward ways of generating a passive income. The great thing about this strategy is that any investor can get involved. I can buy a basket of income stocks with just a few thousand pounds. I’d have to invest tens of thousands to generate a passive income from an asset like buy-to-let property. As such, here are five passive income stocks I’d buy today to generate £5k a year.  Dividend investing risks  Buying dividend stocks can be a great way to generate passive income. However, dividend income should never be taken for granted. Dividends are paid from company profits and, therefore, if a firm’s profits collapse, it may have to cut the payout. This is just one reason why a company may cut its dividend. Other reasons include paying down debt or funding an acquisition. Put simply, dividends can be used to provide a passive income, but investors shouldn’t rely on them as their sole source of income. Still, I’m comfortable with the level of risk involved with buying dividend stocks for a passive income. That’s why I’d buy the stocks below for my portfolio today.   Passive income investments To generate an income of £5k a year from dividends stocks, I estimate I’d need to invest around £100k. That’s assuming an average dividend yield of 5% for stocks in the portfolio.  That seems like a lot, but there’s no demand for me to invest this amount overnight. I can build up my pot over time.  One of the easiest ways to buy an instant dividend portfolio is to acquire an investment trust. The City of London has one of the best dividend track records of all investment trusts. Its portfolio contains some of the market’s best income stocks such as HSBC and GlaxoSmithKline. At present, it offers a yield of just under 5%. However, if the majority of the company’s portfolio investments were to slash their dividends, the City of London may have to follow suit. That’s the most considerable risk of this investment right now.  Two other stocks I’d buy for a passive income are Shell and BP. These two oil producers currently offer dividends yields of around 5% as well. These firms may not be suitable for all investors for ethical reasons. Their exposure to the volatile oil price may also put some investors off.  Bumper profits  FTSE 100 telecoms giant Vodafone currently offers a dividend yield of 5.8%. I think this is an income champion as revenues from telecoms contracts tend to be stable and predictable. That’s why I’d buy the stock as a passive income investment. That said, the company has a lot of debt which could be a risk as we advance.  Finally, I’d buy miner Rio Tinto. This stock currently supports a dividend yield of 7%. That’s one of the highest in the FTSE 100. The iron ore miner is expecting bumper profits this year due to record high prices. Unfortunately, this may not last. Commodity prices are highly volatile, and just because Rio is earning big profits today doesn’t the good times will last.  One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’m following Warren Buffett’s advice 3 reopening stocks that I reckon will rally now When will the FTSE 100 get back above 7,000 points and stay there? Investment lessons from a high-speed crash E.On compensation for early direct debit payments Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 5 passive income ideas I’d use to generate £5k a year appeared first on The Motley Fool UK.
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  27. How I’d earn passive income for the price of a bus ticket each day (28/02/2021 - The Motley Fool UK)
    Working for one’s money can be hard. Between long hours, demanding deadlines, and managing workplace politics it’s no surprise a lot of people aren’t missing the daily grind right now. But work is an important source of income for most people. That’s why a lot of people now are keen to set up passive income streams – ways of getting money without having to work for it. Some of these are capital intensive, like buying a property and renting it out. But some passive income streams can be built for just a couple of pounds a day, the price of a bus ticket. Here I explain how. Why I like shares for passive income My own approach to passive income is that shares can be a good way for me to earn it. If I just tuck away a couple of pounds each day into a Stocks and Shares ISA, I will hardly miss it. But over time that can help me build a tax-efficient savings pot with which to invest in shares for passive income. Not all shares generate income. Some companies are in growth mode, so prefer to reinvest their profits in the business. That is why companies like The Hut Group wouldn’t be on my passive income list. While their shares may grow, I don’t expect them to pay dividends soon. Indeed, their boss said last month that he has no plans to start paying dividends and will instead focus on building the business. So for passive income I would look for a share I expect to pay dividends consistently in the future. Dividend policies can change, but a helpful starting place is the company’s payout history. Have they paid out dividends regularly in the past and do they look likely to have the financial means to do so in the future? Utilities are often a popular pick for this reason. Not only are they often substantial dividend payers, but a regulated pricing regime can provide forward earnings visibility which many non-utility companies don’t have. So, for example, the near-5% yield of United Utilities looks like an attractive passive income source. Keeping it passive One mistake many people make when seeking passive income is investing in shares and then spending hours every week monitoring them. That is a mistake in my view not because it isn’t right, but because it means the income isn’t passive. I’ve learnt that truly passive income should keep flowing in even if I go away for months or years and pay no attention. That’s why a popular passive income pick is old blue chip companies with fairly steady markets, such as Unilever, Diageo, and Morrison’s. Their fortunes may ebb and tide but in general, long-established companies which are cash generative are the sort of passive income pick which let me sleep at night without thinking about them. If markets change, for example, because shopping habits shift or alcohol consumption falls, the companies’ fortunes could change. However, one technique I have selected to help manage such risks is diversification. As I put a little money away often, I can invest in different companies on my passive income list. That way, even if one company I’ve discovered does badly, I would still expect to be earning passive income overall. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading How to prepare for divorce The DS Smith share price is rising! Here’s what I’d do now The Avon Rubber share price has fallen 40% in 3 months. Should I buy now? Passive income ideas I’d use for the price of car insurance premiums What might this director sale mean for the Judges Scientific share price? christopherruane owns shares of Unilever. The Motley Fool UK has recommended Diageo, Morrisons, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’d earn passive income for the price of a bus ticket each day appeared first on The Motley Fool UK.
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  28. 5 passive income ideas I’d use to generate £10k a year (09/05/2021 - The Motley Fool UK)
    I think investing in stocks and shares is one of the most straightforward ways to generate a passive income. With that in mind, here are five stocks I would use with the goal of generating a passive income of £10,000 a year. Building a portfolio  I’m targeting an average portfolio yield of around 4%. Based on this target, I estimate I will need a savings pot of £250,000 to generate a passive income of £10,000 a year. I’m not just going to buy any old dividend stocks for my portfolio. Dividends are never guaranteed, which means investors have to be careful when selecting dividend stocks. A high dividend yield can be a sign the market does not believe the payout is sustainable.  So, instead of buying the highest dividend yields for my portfolio, I would buy a mixture of companies. I think this strategy could provide me with a sustainable passive income and the potential for income growth, as well as some protection against dividend cuts. Passive income investments The first place I would look for income is the utility sector. Here I would buy National Grid and United Utilities.  National Grid operates the UK’s electricity infrastructure, while United Utilities is a water provider. Both of these businesses are highly defensive. That means there’s a steady stream of income available for these firms to support their dividends. Both sectors are also highly regulated. As such, regulators have a lot of control over how much profit these companies can return to shareholders. Unfortunately, this may hurt their ability to increase their payouts in the long run.  Still, with dividend yields of 5.8% and 4.4%, respectively, I think these companies would make great additions to my passive income portfolio.  Another company I would buy for my income portfolio is the banking giant Lloyds. As it stands, the stock currently supports a dividend yield of 1.3%. However, that is expected to increase to 3.7% next year, and I think further growth could be on the cards, although it’s not guaranteed. Another coronavirus wave could cause significant loan losses at the lender, which would inhibit its ability to increase its distribution. Still, considering its income growth potential, I would add this stock to my passive income portfolio. High yield  A company with a market-beating dividend yield I’d buy is insurance group Phoenix. This stock currently supports a dividend yield of 6.7%. As this income is derived from the management of pension assets, which can be a very steady business, I think it looks attractive. Nonetheless, the organisation may have to rethink its dividend plans if there’s a sudden increase in interest rates, which may upset its balance sheet. The final stock I’d buy for my passive-income portfolio is LXI REIT. This company invests in commercial property assets with very long leases stretching up to 30 years. A high-quality tenant portfolio means the group collected 99.8% of its rent for the second quarter of 2021. This high rent collection should support the REIT’s dividend yield, which currently stands at 4.2%. However, as this is backed by income from property, management may have to reduce the distribution if rental income slumps, which it may do in a sudden economic downturn.  CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading How much is the Helium One share price really worth? What’s the difference between a leasehold and a freehold? This FTSE 100 share is up 64% in 1 year. I like this ‘secret’ stock! Best UK stocks to buy in an ISA Does my ex have to pay half of the mortgage? Rupert Hargreaves owns no share mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 5 passive income ideas I’d use to generate £10k a year appeared first on The Motley Fool UK.
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  29. 2 side hustle ideas I would consider using – without the hustle (24/03/2021 - The Motley Fool UK)
    With more time on their hands and less steady income, a lot of people have spent the past year hunting for side hustle ideas. From driving for Uber to selling on Ebay, it seems there are all sorts of ways people are looking to make some extra income. But the thing I don’t like about the “side hustle” is that it often still is a hustle. Many side hustle ideas take a lot of time and physical energy. That’s why I like side hustle ideas such as putting a bit of money each month into shares that could generate some passive income for me.  Passive income from selling everyday items Instead of sitting on my floor making candles or homemade food to sell online, I would look at companies who already have experience of doing such activity profitably. For example, the UK’s biggest supermarket chain Tesco sells everything from craft food brands to scented candles. It usually distributes some of its profits to shareholders as dividends. Right now, the yield is around 4.2%. That means that for every £100 I put into the shares, I would hope to get £4.20 back each year while I held the shares. I reckon Tesco knows far more than I ever will about selling household goods – whether online or in store. Plus tucking this money away in Tesco shares, I won’t need to do any work. I can just sit at home and wait for my passive income stream of dividends. However, dividends are never guaranteed. Tesco could decide to spend the money in growing its business instead, for example. A tougher retail environment with growing discount retailers could damage profits, as could a strategic mis-step by management. That’s one reason I would invest in shares of more than one company as my side hustle. Digital side hustle ideas A lot of side hustle ideas are aimed at digital nomads, who want to sell their expertise and deliver it online. That could be anything from tutoring to programming. But I think I can earn passive income from such side hustle ideas without having to do the work myself. An example is investing in Sage (LSE: SGE). This well-established accountancy software provider has over 12,000 employees. With the company’s brand name, expertise, and financial firepower I think it is better suited than I am to monetise the delivery of expertise online. Historically, like many software companies, Sage physically installed its software. Now it is increasingly moving to a software-as-a-service model. The Sage Business Cloud model allows the company to earn money by delivering the company’s software expertise remotely. I like the target market of small and medium enterprises, as their accounting needs should stay fairly consistent. I also like the scaleability of software delivered through the cloud. More customers allow the development costs to be spread wider, which could boost profit margins. Sage yields 2.9%. The dividend has been raised each year for two decades. However, there are risks – for example, competitors could develop better software. The costs of developing cloud  infrastructure could also eat into profits. Tesco and Sage are side hustle ideas I would consider – without the hustle. I would consider investing in them to try to generate passive income using some of the principles of a side hustle but not the effort. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Is Sage Group a dark horse or should it be cut loose? Why I think Tesco’s share price is set to rise I’d buy and hold Tesco shares for the next 10 years Sage shares have pulled back. Should I buy? Scottish Mortgage Investment Trust: 2 peers paying bigger dividends christopherruane has no position in any of the shares mentioned. The Motley Fool UK has recommended eBay, Sage Group, Tesco, and Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 2 side hustle ideas I would consider using – without the hustle appeared first on The Motley Fool UK.
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  30. 2 ideas I’d add to my passive income list (19/03/2021 - The Motley Fool UK)
    Passive income is money one receives without working for it. Simple passive income ideas include owning a lockup garage and renting it out, or renting an advertising hoarding on a field one owns. But a lot of passive income ideas aren’t as straightforward – they involve spending time and often money to set up a business now, in the hope of a passive income stream in the future. That doesn’t attract me for several reasons. First, if I have to spend a lot of time on the activity, it isn’t really passive. Secondly, why take the risk of starting a new business when I lack the expertise? Instead of setting up a new online clothing business, for example, I’d rather figure out which online clothing businesses are already successful and see whether I can invest in their success. Instead, I put money aside regularly to buy shares. With those shares, I am building my own passive income stream. Riding the online retail boom A lot of listed companies sell clothes online, from Boohoo to Next. But the rag trade is a very competitive business and so those might not be good income picks for my portfolio. Boohoo hasn’t paid a dividend, while Next’s current dividend yield is under 1%. That could increase, as it was cut during the pandemic. But even that makes me dislike it as an income pick. Some retailers maintained dividend payouts throughout the pandemic. As passive income ideas, that sort of historical reliability commends them to me. For example, Morrison’s has paid dividends throughout the pandemic and yields around 4% annually. That means that if I put £10,000 in today I’d expect around £400 of passive income each year in future. Plus, occasionally the company pays out special dividends. It announced this week, for example, that it would pay out a special dividend of 4p per share, deferred from the prior year. Online exposure Morrison’s is well-known for its chain of supermarkets. But it is also a significant manufacturer, owning everything from a flower packer to fish wholesaler. That vertical integration gives it a competitive moat in British retail. Its online operations are more substantial than many people realise and online sales tripled over the past year. However, the cost of picking and distributing can make online sales less profitable while pulling some shoppers away from physical stores. Also the UK retail market remains very competitive. To maintain its dividend in future, Morrison’s will need to stay competitive and make enough profits to fund the dividend. My passive income ideas include Tesco While looking at Morrison’s, I have also been thinking about arch rival Tesco. Tesco is the market leader in UK retail. It also offers a decent dividend yield, around 5%. Having sold off its Asian business lately, the company can focus on its core European operations. They tend to be lower margin, however, so Tesco will need to work hard to keep profitability at its prior level. Tesco also faces a lot of the challenges Morrison’s faces. These include consumers shifting online and the rise of discount retailers like B&M. However, Tesco’s vast estate, brand recognition, and long experience make it a formidable retailer. I wouldn’t pick it for my growth portfolio, but a 5% yield lands it a spot among my passive income ideas. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading Penny share in focus: why did the Futura Medical share price soar 125%+ today? Why I’ve bought more Plug Power stock despite it crashing 100% in 2 months 1 FTSE 100 stock I think could soar on the retail investing boom! Just 14% of Brits are investing in stocks and shares – but more are keen to get started 4 common mistakes I’d avoid when trying to make passive income from dividend stocks christopherruane has no position in any of the shares mentioned. The Motley Fool UK owns shares of Next. The Motley Fool UK has recommended boohoo group, Morrisons, and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 2 ideas I’d add to my passive income list appeared first on The Motley Fool UK.
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  31. How I’d earn passive income while still working (22/03/2021 - The Motley Fool UK)
    A lot of people like the idea of passive income. Getting money without having to work for it sounds more attractive than the daily grind. But in reality, a lot of people spend most of their waking hours working. Here’s how I’d earn a passive income even while working. Working provides capital While work may cost time, the good thing is it provides money. That makes it easier to build up capital which one can then invest with the aim of producing passive income. Let’s say one puts away 10% of a monthly wage. Data from the Office for National Statistics and HMRC last October suggested the average monthly wage of full-time workers is around £1,919. 10% of that would be close to £200. With £200 a month, after just a few months, I’d look to make my first passive income investment. Beginning with just one share, I’d want to limit my risk in the absence of diversification. So I’d go for a blue chip company whose prospects I found attractive, like Morrison’s. With its 4% yield, the supermarket chain should generate about £8 of passive income each year for each £200 I put in. So after a year, for example, my monthly contributions to date could already be making me about £96 of passive income for no work on my part. But dividends aren’t guaranteed. For example, if Morrison’s suffers from increased competition due to discounters like B&M, its earnings could fall. So, once I had enough capital, I’d start to buy shares in more than one company. Passive income ideas That extra time would let me look around the market to see what sort of shares could meet my own passive income goals. For example, some companies currently pay high dividends but their share price is low in anticipation of a cut. These are known as “yield traps” or “value traps”. That’s why I don’t just rely on historical dividend data. I also look at a company’s likely future earnings and free cash flows. To maintain and hopefully grow payouts, a company will need to grow its profits as these form the basis of dividends and thus passive income. Looking at growth I could look here for companies whose earnings I expect to grow because they are in improving markets. For example, consumer goods giant Unilever sells products in over 190 countries, at a variety of price points. As middle class populations grow in countries like China, India, and Ghana, I would expect demand for branded consumer goods to increase too. That could be good for Unilever, which already yields 3.7%. Alternatively I could hunt for passive income ideas where I think a company might be able to grow income without necessarily growing sales. That sort of pricing power can be due to a unique product or strong brand loyalty. While cigarette use overall may well decline in coming years, Imperial Brands believes that it can offset that by increasing prices. With a 9% yield, that could help them protect the dividend – and my passive income. But what if pricing power isn’t as strong as Imperial hopes? What if competitors opt for a price war? In such a situation, sustaining earnings in a declining product category could prove difficult. That’s why Imperial Brands is only one of my diversified portfolio of passive income ideas – and I keep hunting for more. 5 Stocks For Trying To Build Wealth After 50 Markets around the world are reeling from the coronavirus pandemic… And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains. But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times. Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down… You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm. That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away. Click here to claim your free copy of this special investing report now! More reading Why I’d buy these 2 property shares to ride the UK housing boom Can the Rolls-Royce share price surge if it overcomes this huge trend? What are examples of passive income? Despite a rising Natwest share price the government has been selling at a loss. Here’s how I’d react. Interest rates maintained at 0.1%: what this means for your money christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands and Morrisons. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’d earn passive income while still working appeared first on The Motley Fool UK.
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  32. My plan to earn passive income for a pound a day (26/03/2021 - The Motley Fool UK)
    Passive income is money that comes in without having to work for it. From dividends to online sales royalties, passive income can be a helpful source of extra funds. I really think it’s possible to start earning passive income without doing much if any work. Having money to start with would help. But even starting with no money, putting aside just one pound a day could start to build passive income streams. Below I explain how I’d put that approach into action. Saving funds to invest Putting aside a pound a day, I’d build up an investment pot. This could be invested in shares. This pot would grow slowly at first. But the key thing is that even small daily contributions mean it would indeed grow. It would likely take a few months before there was enough capital to start investing efficiently. I’d want to minimize my risk if I was starting with a single company. So, I’d concentrate on blue chip names. For example, National Grid is an energy company. As its name suggests, National Grid owns a large part of Britain’s electricity transmission infrastructure. Its shares yield 5.6%. So just over three months into saving £1 a day, let’s say I’d amassed £100. Putting that into National Grid shares, I’d hope to earn £5.60 in passive income each year. That doesn’t sound like a lot. But I’d remember a couple of things. First, the dividends would hopefully keep coming in. So, that passive income stream might continue each year just from my initial investment. It could even increase over time, although utility dividend rises tend to be regulated. Note that dividends come from cash flows, so are never guaranteed. If grid operation costs unexpectedly push the company into a loss, for example, it could suspend dividends. Secondly, I would now own the shares. So at some stage in the future, I could sell them again. If the price had fallen, I might make less than I paid. But if the share price had risen, I could recoup more than the initial £100 outlay. The passive income during my holding period would be a sort of bonus. Higher yield for passive income Within a few months more, just £1 a day would let me start to diversify my holdings. I would do this because diversifying across companies is a way to reduce risk. For example, tobacco company Imperial Brands is yielding 9.3%. So putting my next £100 into that would provide close to a double-digit return in passive income. Cigarette sales are under threat from falls in demand and regulatory controls, though, so I would try to keep diversifying. At the moment I quite like Tesco for its yield of 5.1%. Changes in the retail market could affect its success. But I do see some defensive qualities in its brand name and customer relationships. In less than a year, on just a pound a day, I’d own three blue chip names, with a projected passive income of £20 each year, based on current prices. That’s just the beginning. If I kept saving, as well as holding these shares and collecting future passive income, I could buy more. Or I could find new companies in which to invest, to try to build my passive income stream more and more over time. All on a pound a day! “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Tesco share price looks great value to me Why hasn’t the Tesco share price risen more? National Grid share price: I think this is one of the best FTSE 100 stocks out there 2 side hustle ideas I would consider using – without the hustle Why I think Tesco’s share price is set to rise christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended Imperial Brands and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post My plan to earn passive income for a pound a day appeared first on The Motley Fool UK.
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  33. My passive income list really is this simple (23/02/2021 - The Motley Fool UK)
    The appeal of passive income is easy to understand. Rather than working hard for every pound, sitting back and letting money come in without effort sounds alluring. While passive income is appealing, a lot of passive income ideas don’t make my list. I keep things simple by making sure my passive income list follows these rules. A list needs more than one thing on it A single idea doesn’t make a list. So, for example, although I look to make passive income from shares, I always make sure that I have multiple shares on my list. It can be tempting to look at a share like Imperial Brands, whose yield has touched 10% this week, or Vodafone with a 6% yield, and imagine the income from concentrating in one such share. But investing in only one company is a risky strategy, no matter how good the company seems. Market demand can change, or a company can have bad luck. Both Imperial and Vodafone have cut their dividends in recent years, for example, and could do so again in the future. What’s interesting is that some of the possible negative factors they face – such as declining tobacco use or the cost of mobile licenses – are industry wide. That’s why I don’t just diversify my passive income list across different companies, but also between industries. No matter how high yielding an industry may be, it is risky to put too much of one’s assets into it. The sleep easy passive income list Another thing about my passive income list is that I want it to be genuinely passive. I want to invest some money, sit back, and receive dividends regularly. That means that I don’t invest in companies that require a lot of monitoring. Instead, I prefer companies in established industries with fairly predictable results. Consider for example, McBride and Unilever. While the detergent maker McBride looked cheap to me a few months ago, its small size and limited pricing power mean it has struggled to grow profits in recent years. A new chief executive unveiled a focused strategy, which could change the results. For a growth pick, that might be attractive. But for a regular source of passive income which I don’t need to spend time thinking about, it seems like too much monitoring the company news for my liking. So it doesn’t make my passive income list. By contrast, consumer goods behemoth Unilever has been growing its dividend for years and paid out all the way through the pandemic. That doesn’t mean Unilever is worry–free: a sustained fall in demand for its products could affect dividends, as for any company. While it is adding new business areas whose long-term results are as yet unproven, the bulk of its revenues are derived from well-established business franchises such as Dove and Ben and Jerry’s. So I feel comfortable putting some money into Unilever and expecting passive income from it, without having to worry about its short-term business results impacting payouts. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading HSBC share price: can it bounce back? The Ocado share price is around 2,300p. Would I buy now? ‘Covid passports’ back on the table The Synairgen share price: here’s why I’d buy and hold this stock Cineworld and easyJet shares: should I buy the reopening trade? christopherruane owns shares of Imperial Brands and Unilever. The Motley Fool UK has recommended Imperial Brands and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post My passive income list really is this simple appeared first on The Motley Fool UK.
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  34. How I’d start earning passive income for the cost of weekend brunch (20/03/2021 - The Motley Fool UK)
    As spring bursts forth and lockdown restrictions are set to ease, outside eating is set to return. Weekend brunch in the park or a café is ordinarily a staple of many people’s social diaries. But while brunch only lasts a mealtime, a passive income stream could last a lifetime. Here’s how I’d start earning passive income for just the cost of weekend brunch. Regular saving The cost of brunch varies a lot. But let’s say that one spends £20 a week on brunch. Putting that away each week comes to a little over a thousand pounds a year. I would use that money to start buying shares instead. It wouldn’t even mean I couldn’t have brunch in future – but whether I did or not, I’d still make a point of keeping this saving habit. In the beginning I couldn’t afford to buy many shares so I’d seek to manage my risk by buying only a conservatively run, blue chip company. For example, a company like Tesco or National Grid would be on my consideration list here. Both yield between 5% and 6%, so I would expect £50–60 a year in passive income per year from them in future from my first year of saving if the dividends are maintained. That passive income could pay for a few brunches! Over time, though, I would try to buy a wider selection of shares to diversify. Tesco faces risks from fast growing discount retailers, while National Grid could have profits constrained by regulatory changes. Investing in a broader basket of shares as my cash pile grew could help expose me to more names and so reduce my overall risk from any one investment. Two passive income picks I find good passive income ideas often emerge in industries that are mature and maybe even in their sunset years. That is because the companies are able to throw off substantial amounts of cash thanks to their long-established customer base. However, there are limited opportunities to redeploy that cash in the business for growth. So it can be distributed to shareholders as dividends, although as with any shares there is no guarantee of future dividends no matter how good the dividend history. An example is tobacco. The two leading FTSE 100 tobacco companies are British American Tobacco and Imperial Tobaccco. BAT yields 7.5%, while Imperial yields 9.5%. That is a very attractive yield to me. Instead of spending money buying cigarettes after brunch, I could be earning passive income from millions of customers doing that. However, high yields can sometimes signal higher risk. For example, cigarette use is declining in many markets and the industry operates within very tight marketing constraints. Both companies are looking into next generation products like vaping, but for now I don’t think they will be as popular or profitable as cigarettes once were. I hold both names and they are passive income favourites of my portfolio – but I am also realistic about the threats to the industry. That is why I am constantly looking for other passive income ideas I can use to build a profitable, diversified portfolio. That sounds as tasty as brunch! One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading 3 FTSE 100 growth shares I’d buy now 3 cheap UK shares to buy for high dividend yields The Bereavement Support Payment explained How does the UK State Pension compare with Europe? A UK share I think matches the Warren Buffett investment style christopherruane owns shares of British American Tobacco and Imperial Brands. The Motley Fool UK has recommended Imperial Brands and Tesco. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’d start earning passive income for the cost of weekend brunch appeared first on The Motley Fool UK.
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  35. How I’d create a passive income with £500 a month (22/05/2021 - The Motley Fool UK)
    I firmly believe that buying stocks and shares is one of the most straightforward ways to generate a passive income. Indeed, unlike other passive income strategies, investors can buy dividend shares with just a few pounds. This could allow virtually anyone to start generating income with just a few clicks.  And this is the approach I would use to generate a passive income with an investment of just £500 a month starting today.  Passive income investments Using dividend shares to generate a passive income can be a good strategy. However, dividend income is never guaranteed. This became painfully apparent last year when many companies had to scrap their dividend payouts as revenues plunged during the pandemic.  The risk of a dividend cut is always going to be present with income stocks. As such, this passive income strategy might not be suitable for all investors. Nevertheless, I’m comfortable with this uncertainty, which is why I’m happy to use the process.  I also think I can reduce the risk of being exposed to a dividend cut by using a fund. There are a couple of options investors can choose from when looking for income funds. These include the iShares UK Dividend UCITS ETF, the SPDR S&P UK Dividend Aristocrats UCITS ETF, and the WisdomTree UK Equity Income UCITS ETF. All of these ETFs follow a slightly different investment strategy but have one overriding aim. That is to invest in a diversified portfolio of dividend stocks to produce a steady dividend income for their investors.  At the time of writing, the funds offer dividend yields of between 3% and 4%. It all adds up  By investing £500 a month, I think I can use these funds to generate a passive income. A monthly deposit of £500 will yield a total pot of £6,000 after a year. A dividend yield of 4% could provide an annual passive income of £240.  That may not seem like much at first, but this income will compound with additional contributions providing a virtuous cycle. Of course, returns of 4% per annum indefinitely are by no means guaranteed, but over five years, even with no capital growth, this could produce a pot of £33.1k with an annual passive income of £1,324.  The one significant risk of using this strategy is the risk of a capital loss. Stocks can go up but also down, which is one of the biggest challenges of relying on income from dividends. A sudden market decline could cause capital losses, which may exceed dividend income. In addition, if there are widespread dividend cuts in the market, the funds listed above may also have to reduce dividend distributions. These are the most significant risks and challenges investors following this passive income strategy face.  Still, I think this approach is a great way to generate income. That’s why I am using it myself, despite the risks outlined above.  The Motley Fool UK's Top Income Stock… We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading 3 FTSE 250 dividend stocks to buy Lower returns beckon: here’s how to avoid them Can the stock market rally continue? Why now is a great time for me to buy Cineworld shares The easyJet share price is falling: should I buy now? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post How I’d create a passive income with £500 a month appeared first on The Motley Fool UK.
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  36. Is Staking Crypto Worth it? Passive Income? (22/04/2021 - Reddit Stock Market)
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  37. Is Staking Crypto Worth it? Passive Income? (25/04/2021 - Reddit Stock Market)
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  38. Is Staking Crypto Worth it? Passive Income? (24/04/2021 - Reddit Stock Market)
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  39. How to Create Passive Income by Staking Your Crypto on Coinbase (30/04/2021 - Reddit Stock Market)
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  40. How to Create Passive Income by Staking Your Crypto on Coinbase (29/04/2021 - Reddit Stock Market)
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  41. Dividends/Passive Income - Novice w/ Q’s for the Midas Touch (20/04/2021 - Reddit Stock Market)
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  42. How to Create Passive Income by Staking Your Crypto on Coinbase (17/05/2021 - Reddit Stock Market)
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  43. 5 passive income ideas for a Stocks and Shares ISA (03/04/2021 - The Motley Fool UK)
    Due to the tax benefits offered with a Stocks and Shares ISA, owning stocks inside one of these wrappers can help investors generate a tax-free passive income. Indeed, this is a strategy I use myself. However, it might not be suitable for all, as different investors may have different tax considerations or goals. Here are five passive income investments I’d buy for a Stocks and Shares ISA today. Passive income investments Owning income stocks such as Admiral and Direct Line could be one of the easiest ways to generate a passive income from the stock market. These equities currently offer dividend yields of 7% and 7.9% respectively, although these are just projections at this stage. There’s no guarantee either company will meet these forecasts.  Still, I like these companies because they provide a product, which is a legal requirement in the UK, car insurance. This gives them a huge market to sell in, although it’s also viciously competitive. It can be incredibly profitable for the market leaders such as Admiral and Direct Line. That’s why they’re dividend champions and why I have them in my portfolio.  The primary risks they face are competition, as noted above, as well as regulatory headwinds. A higher level of insurance claims could also destabilise their carefully-calibrated business models. Stocks and Shares ISA holdings Some of the market’s best passive income stocks are utility providers — companies such as United Utilities and Severn Trent. These are some of the largest water businesses in the UK. As consumers will always need access to water, this is a relatively defensive market. And one that will always be there. All these companies have to do is manage regulatory demands and capital spending effectively to achieve the best balance of profit growth and investment. At the time of writing, these companies support dividend yields of 4.8% and 4.4% respectively, based on analyst projections. Unfortunately, they also have to deal with some significant challenges and risks, despite their defensive nature. For example, regulators control how much profit they’re allowed to make. They also have a lot of debt, which means they’re exposed to interest rate increases. These factors could reduce their ability to produce a passive income stream for investors in the future.  Still, considering their defensive potential, I’d buy both United and Severn for my Stocks and Shares ISA.  Growth and income One of the best ways to find a passive income stock is to buy and hold a growth investment. A company that’s reporting strong growth is more likely to increase its distribution to investors rapidly over the long term. Take generic drug producer Hikma, for example. Over the past six years, this company’s per share dividend to investors has increased at a compound annual rate of 9%. Today, the dividend yield is 1.7%. While there’s no guarantee this dividend growth will continue, I think it shows its potential. Hikma faces multiple risks, such as competition, regulation and the need to invest in its pipeline continually. If it doesn’t, competitors may overtake the business and leave it struggling to develop new products. These challenges aside, I’d buy this company for a passive income portfolio in my Stocks and Shares ISA today.  The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading The Tesco share price: is now the time to buy this FTSE 100 stock? How to get a bank statement Should I buy Hammerson shares after the big 2020 loss? What does it mean to ‘buycott’? How much is the UK State Pension for a married couple? Rupert Hargreaves owns shares in Direct Line and Admiral Group. The Motley Fool UK has recommended Admiral Group and Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 5 passive income ideas for a Stocks and Shares ISA appeared first on The Motley Fool UK.
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  44. How achievable is passive income? (06/03/2021 - The Motley Fool UK)
    Earning a decent level of passive income is a great financial goal to set for yourself. I’m going to break down all you need to know about making money this way and how you can make it an achievable goal. [top_pitch] What is passive income? Passive income involves making an income with little direct effort or energy in maintaining the flow. Ideally, it’s a way of making money while you sleep! Our lives shouldn’t just be about making money. Earning this way means it happens in the background of your life so you can prioritise more important things. In an ideal passive situation, there’s no direct relationship between the amount of time you work and the amount of money you make. It’s not a get rich quick approach, but it is a realistic way to earn on autopilot. How can I earn passive income? There are loads of different ways to start earning some passive income. Depending on your situation and skill set, routes to consider include: Renting out your property or even just a room in your house Sharing your skills by creating online courses or content for platforms such as YouTube Selling your own creations, such as stock photos Writing and self-publishing a book straight to Amazon Creating a blog or website to monetise through advertising or affiliate links Investing in stocks and shares that pay dividends Whichever route you choose, it will probably take some initial work to get things rolling. Although there are plenty of tried and tested ways to create passive income streams, thinking outside the box could also work in your favour. [middle_pitch] What is an easy way to earn passive income? This is where things get exciting. There are plenty of things that you can do to help build up some passive income. You don’t have to be an entrepreneur or even be on a high salary to get started. Investing is a great place to start because you can kick things off with a relatively small amount. So could find yourself earning a small passive income almost immediately. However, it’s probably not going to be enough to live on. So you’ll need to consider what you want your passive income to cover. How do I earn passively with investments? Here are two great ways to begin earning some passive income with investments: 1. Stocks and shares ISA This is a great account for investors because growth and proceeds from aren’t subject to further tax. You can put up to £20,000 into a stocks and shares ISA each tax year. Proceeds from investments in a stocks and shares ISA are not classed as part of your yearly income. So if you invest wisely, you can gradually build up a bigger stream of passive income that’s shielded from tax. If you want a more stable source of income from your investments, you could look at something like dividend investing. This means picking companies that pay dividends to their shareholders. Investing this way can be less volatile when you’re no longer looking for growth and want a more steady stream of passive income. 2. Investing solutions Although the option above is good for selecting your own investments, it can be time-consuming. An investing solutions platform can be a way to create passive income. Instead of spending lots of time researching and maintaining your portfolio, you can let the experts do it for you. Some accounts also give you the benefit of including ISAs. This way, you don’t have to put in lots of effort or time managing your investments and passive income. Investing in this way used to be really expensive, but that’s changing. For example, InvestEngine has lowered its minimum investment amount from £2,000 to £100 and they’re currently offering a £50 welcome bonus. So you can get set up with an immediate boost on your way to earning some passive income. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading The Restaurant Group share price: is now the time to buy? AstraZeneca share price: back to sub-£70 levels. Should I buy now? The Rolls-Royce share price: is this best investment for 2021 and beyond? 1 FTSE small-cap biotech stock I’d buy now Women vs men: who’s investing in what? The post How achievable is passive income? appeared first on The Motley Fool UK.
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  45. Passive income investing: my 4 steps to go from £0 to £500 a month (23/03/2021 - The Motley Fool UK)
    I really like it when I write myself a list of things to do. And if I need to do something, I like to have several steps I can follow to get the job done. I think this concept is helpful at breaking up large tasks into smaller ones. In fact, I think it can be applied very well when thinking about passive income investing when starting from scratch. Getting up and running The first step I’d take if I was making £0 in passive income a month is to simply get myself started. To begin with, I need to look at how much I can afford to invest each month in dividend stocks. I want to look at the end goal (making £500 a month from passive income investing). At the same time, I can’t reach this level for several years, so I want to focus on right now and how much I can put away.  Let’s say I decide on putting away £1,000 a month and can move on to step two. This involves deciding the kind of dividend yield I want to target. Usually, the higher the yield, the more risky the stock. I also need to think about the yield in relation to both the FTSE 100 average, and other passive income investing ideas.  For example, the FTSE 100 average dividend yield at the moment is 3.13%. The highest individual yield is around 9%. So for step two, I’d probably decide to go for a target yield of around 6%. Going for the highest yield is risky as the company may be struggling with a falling share price, artificially pushing the yield up. Step three now involves looking at the different companies that fit the bill of giving me around a 6% dividend yield. In order to be a truly passive investment, ideally I want to be able to invest in a company and leave my money there for years to come. I don’t want to keep having to buy and sell due to dividend cuts or company-specific issues. This makes step three (that is, doing my homework on which businesses to invest in) very important. Passive income investing conclusions After deciding and buying the group of stocks, there’s one final ongoing step in my passive income investing timeline. This involves ensuring I keep up my regular investments of £1,000 a month. It also involves reinvesting the dividends I receive, to enable me to get to my goal of £500 a month in dividend income quicker. So how long should it take me to go from £0 to £500 a month in income? Steps one-to-three can be done in a few days, depending on how much time I can devote to the research. Assuming I start investing the £1,000 in month one, I’ll get to my goal of averaging £500 a month in passive income around halfway through year seven. But I have to remember that my 6% growth isn’t guaranteed. Stocks can go down and. dividends can be cut. So I need to be prepared for it to take longer than seven years. At least I should be able to assume I won’t have to wait 30 years to achieve my goal. also good for me to remember that although step four is ongoing, I can get up and running with passive income investing in a relatively short period of time. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading 1 passive income stock I’d buy before the Stocks & Shares ISA deadline The Yu share price is up 400% in 1 year! Should I buy now? 1 stock I’d buy and 1 I’d avoid for my Stocks and Shares ISA FTSE 100: 3 of the best shares to buy today How Amex Preferred Rewards Gold cardholders can get 5 TIMES their regular points per pound! jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income investing: my 4 steps to go from £0 to £500 a month appeared first on The Motley Fool UK.
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  46. How is passive income taxed? (16/04/2021 - The Motley Fool UK)
    HMRC requires everyone to report any additional income they earn. Additional income is income that is not related to employee income. If you don’t report this income, it might be perceived that you are evading tax. An example of such an income is passive income. This income is taxed, but not in the same way that employee income is taxed. Here’s what you need to know. Before we continue, it’s worth noting that tax treatment depends on an individual’s specific circumstances and may be subject to change in the future. [top_pitch] What is passive income? Passive income is money earned in ways that don’t require daily effort. You might put in some effort to get these passive income streams up and running initially, but only a little effort is needed to maintain them once they are running. Common examples of passive income include capital gains, interest, royalties, digital sales, dividends and income from rental properties. Do you have to report passive income?  Yes. Failing to report passive income is illegal. HMRC has measures in place to determine when a person is not reporting passive income. One of the most effective measures is Connect – HMRC’s analytical tool. HMRC feeds taxpayers’ data from different databases (banks, online payment providers, online sales and purchases and government departments and agencies) into Connect. The goal is to determine whether your declared income matches your lifestyle. Keep in mind that this tool works. [middle_pitch] How do I report passive income? You can report passive income by filling out a self-assessment tax return online or downloading and filling in the main SA100 tax return form. If you need to fill in more sections, maybe because of different sources of passive income or individual-specific circumstances, supplementary pages may be required. These include SA102, SA103S, SA103F, SA104S, SA104F, SA105, SA106, SA108 and SA109. With the range of different forms that may be required, it is understandable that there can be confusion when filing a tax return. However, there’s no need to worry. The gov.uk website offers guidance on how to get help with your tax return.  If this is your first time filling out a self-assessment tax return, it might be wise to get advice or guidance from an independent accountant. The steps: Determine whether you are filing your self-assessment tax return online or sending the SA100 form by post. HMRC recommends filling it online as it arguably has more benefits. If you choose to fill it out online, you have to register. Read the ‘How to fill in your tax return notes’ booklet that can be found on the gov.uk website. The notes answer all of the questions you might have and guide you through filling in the different self-assessment tax return form sections. Fill in the form. If anything doesn’t make sense to you, seek help before continuing to fill in the form. File your self-assessment tax return before the deadline. Wait for HMRC to calculate your tax. If you want to have an idea of how much tax you might pay, check the last page of the “How to fill your tax return notes” booklet. There is usually a leaflet with a rough guide to your tax bill. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading I think this unloved FTSE 100 company is one of the best stocks to buy today The NIO share price has plunged! Here’s what I’d do now 3 growth stocks I’d buy for this incredible bull market The Argo Blockchain share price is crashing. Should I buy now? These 2 FTSE 100 stocks have doubled in a year! I’d still buy them The post How is passive income taxed? appeared first on The Motley Fool UK.
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  47. 2 passive income streams I’d use for £10 a week (17/03/2021 - The Motley Fool UK)
    Passive income is money one gets without having to earn it through work. For example, if one rents out a field to a local farmer or earns interest on a savings account, it’s a form of passive income. Finding passive income streams which are simple to understand and don’t require much time or money can be a challenge. But by putting aside just £10 a week, I think it’s possible to start building solid passive income streams. Here are two passive income streams I’d consider. High-yield shares as passive income streams £10 a week might not sound like a lot but it’s just over £500 annually. That would be enough to get started investing in shares. I’d drip feed the weekly payment in until I felt I had enough to make my first investment. I’d consider looking for shares with a high yield. That means they payout a relatively high percentage of their cost price each year to shareholders, as dividends. Right now, the FTSE 100 index of leading shares yields around 3%. So £10 a week should throw off about £15 a year in dividends. But some shares have a much higher yield. For example, Imperial Brands yields over 9%. So investing at the current price, I’d expect £520 to generate passive income of around £46 per year in future. That isn’t guaranteed, though. Dividends can be cut and indeed Imperial cut its dividend last year. Its main business is cigarettes. Smoking is declining in many markets. On the positive side, if dividends do continue, I wouldn’t just get passive income next year. It should continue for as long as I held the shares, based on the dividend payouts. So putting in £10 a week now could still be earning me passive income far into the future. Growth potential Alternatively, I could pick shares that offered some income but also growth potential. In theory, all shares have growth potential – Unilever could continue to grow profits as more consumers buy branded products. Even Imperial could grow, for example by raising prices or expanding into new markets. But some shares already paying out income have much clearer pathways to growth. If I was willing to accept a lower yield I might also get some future growth as well. For example, B&M European Value Retail had paid 24.3p in dividends – including special dividends – this year and still hasn’t declared its final dividend. That means the yield is at least 4.5% but will probably be higher. Even if 4.5% is the final yield, on £10 a week that would amount to almost £24 of passive income a year. That depends on the dividends being maintained, though, and special dividends in particular tend to vary each year. But B&M also continues to grow its business fast. It’s one of my favourite ideas for passive income streams. But it could also produce some share price gains. B&M has proven its ability to thrive in a tough retail landscape. But with retailing facing challenges from quiet high streets to online shopping, B&M’s recent success might not continue. Its model could be copied by competitors, as happened with many dollar stores in the US. So I’d diversify my £10 weekly investment across multiple shares to help reduce my exposure to any one company’s fortunes. The high-calibre small-cap stock flying under the City’s radar Adventurous investors like you won’t want to miss out on what could be a truly astonishing opportunity… You see, over the past three years, this AIM-listed company has been quietly powering ahead… rewarding its shareholders with generous share price growth thanks to a carefully orchestrated ‘buy and build’ strategy. And with a first-class management team at the helm, a proven, well-executed business model, plus market-leading positions in high-margin, niche products… our analysts believe there’s still plenty more potential growth in the pipeline. Here’s your chance to discover exactly what has got our Motley Fool UK investment team all hot-under-the-collar about this tiny £350+ million enterprise… inside a specially prepared free investment report. But here’s the really exciting part… right now, we believe many UK investors have quite simply never heard of this company before! Click here to claim your copy of this special investment report — and we’ll tell you the name of this Top Small-Cap Stock… free of charge! More reading How much does in-home care cost? Will the Hammerson share price recover in 2021? Why I’m tempted to buy this turnaround FTSE share right now Should I buy Argo Blockchain shares today? 4 free homeschooling resources for parents christopherruane owns shares of Imperial Brands. The Motley Fool UK has recommended B&M European Value and Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post 2 passive income streams I’d use for £10 a week appeared first on The Motley Fool UK.
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  48. Passive income ideas I’d use to aim at generating £500 a month (25/04/2021 - The Motley Fool UK)
    I think the stock market has great potential as a source for creating a passive income. Many companies pay shareholder dividends. And if I choose stocks backed by strong businesses, often that stream of dividend income can grow by increments year after year. How I’d use stocks for passive income Of course, not all companies listed on the stock market are backed by strong businesses. Some companies can look good with dividends yielding 5% or more before suffering an operational setback. For example, we can find a lot of well-known names behaving in that manner among cyclical sectors such as finance, retail, mining, construction and others. Sometimes, dividends from these kinds of companies can be here today and gone tomorrow. I tend to favour stocks backed with businesses operating in steady, defensive, cash-generating sectors such as pharmaceuticals, utilities, fast-moving consumer goods and others. When it comes to reliable dividend streams, I think these kinds of stocks are hard to beat. I’m thinking of well-known names such as Tate & Lyle, SSE, Sage, Severn Trent, PZ Cussons, AstraZeneca, Britvic and many more. However, even stocks like these can suffer their ups and downs. Just recently, some of my favourite names suffered something of a share price reversal. This includes defensive tobacco stocks, which are under pressure because of threatened regulatory changes to the industry from the USA. There’s no escaping the risk involved with all types of stock investment. But with the additional risk, we often have enhanced potential for reward compared with other classes of assets such as cash savings. How I’d use collective share vehicles And one decent way of aiming to mitigate the risk is for me to invest in collective stock vehicles, such as investment trusts, trackers and funds run by a manager. The great thing about these choices is my invested funds would achieve wide diversification across many underlying stocks.  Such an approach can soften the danger of picking a duff investment, such as a cyclical company in the down stage of the business and economic cycle. In one example of potential passive income from a collective fund, the FTSE 100 index has historically generated a dividend yield in excess of 4% a year. So if I assume a yield of 4%, I’d need around £150,000 in my Footsie tracker fund to provide a passive income of £500 a month. But it’s a tall order to invest that much money straight away. And, luckily, I don’t need to. Over an investing career, I can compound regular monthly investments to build up my portfolio. In the building stage, I’d roll all the dividends back into my investments to keep the compounding process going. And although no outcome is guaranteed, compounded gains can grow into a surprisingly larger sum. I’d spread my monthly investment between several funds and carefully selected shares. And I’d keep investing for a long time. Then, when I need the passive income, I’d switch to collecting the dividends in my bank account. One stock I’d consider is this one: There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading 5 UK shares to buy today How I’d aim to invest my way from £1,000 to £5,000 with UK growth shares If I could buy only 1 crypto stock, this would be it 3 top UK penny stocks to buy in an ISA right now! 5 stocks to buy with £20k in a Stocks and Shares ISA Kevin Godbold has no position in any share mentioned. The Motley Fool UK has recommended Britvic, PZ Cussons, and Sage Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Passive income ideas I’d use to aim at generating £500 a month appeared first on The Motley Fool UK.
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  49. Best shares to buy now for passive income: 3 on my list (10/05/2021 - The Motley Fool UK)
    On my list of passive income ideas, shares rank highly. I aim to buy shares and receive dividends from them without work. So the income really is passive. Below I discuss three names from my list of best shares to buy now that I would consider to boost my passive income. High-yield tobacco shares A lot of people won’t invest in tobacco stocks because of ethical concerns. But as an investor who is willing to buy tobacco shares, I consider such stocks among the best shares to buy for passive income. Take British American Tobacco (LSE: BATS) as an example. The owner of iconic brands such as Lucky Strike and Camel currently yields 7.5%. With its quarterly dividends, that could make for an attractive passive income stream. The company has increased its dividends each year for two decades. But future dividends are never guaranteed for any share. I think the high yield reflects City concerns about a key risk for tobacco shares: declining rates of cigarette usage in many markets. That could hurt future turnover and profits. I recognise that risk. But I draw some cheer from BAT’s momentum in developing cigarette alternatives. It added 3m non-combustible customers last year. BAT says it is on track to have 50m such customers by 2030. Meanwhile, the company continues to be a cash generation machine. Last year it generated £2.6bn of cash flow even after paying dividends. Supermarket sweep Among the best shares to buy now for passive income, I am considering Morrisons. Taking special dividends into account, the retailer yields 6.3%. I think the company’s store estate will help it to attract customers for years to come. But it has also been ramping up its online presence, using Ocado technology. The supermarket giant has also been growing its smaller footprint offering. It plans 300 more Morrisons Daily stores in the coming three years. These stores currently trade under a different name. I like the approach of extending the brand reach without incurring high capital expenditure. But risks include the highly competitive retail environment. For example, discount retailers like B&M have been very successful. That could force Morrisons into discounting, which might damage its profit margins. Financial services names among my best shares to buy now With its 8.2% yield, I consider financial services provider M&G among the best shares to buy now to boost my passive income streams. I see its strong brand as a competitive asset in the financial services market. The company has a policy to target a stable or increasing dividend. Its dividend increase last year of 2.6% might not sound much. But against the backdrop of the pandemic I thought it was welcome sign of confidence from management. Risks include a downturn in demand for traditional financial service products, for example due to an increase in low cost products from fintechs. My passive income action plan To manage my risk, I always try to diversify my holdings. No matter how good a share might seem, I don’t put too many of my eggs in one basket. I already hold BAT. Both Morrisons and M&G are on my list of best shares to buy now for my portfolio.  CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading Here are 2 top dividend stock picks I think are ESG-investing-friendly FTSE 100 shares: 3 I’m considering for my ISA Is the British American Tobacco (BATS) share price too cheap? Why is the British American Tobacco share price down this week? British American Tobacco and Imperial Brands: which one would I buy? christopherruane owns shares of British American Tobacco. The Motley Fool UK has recommended Morrisons and Ocado Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Best shares to buy now for passive income: 3 on my list appeared first on The Motley Fool UK.
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