Passive income ideas I’d use with £500 a month

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Simply click below to discover how you can take advantage of this. 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. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Enter Your Email Address 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. Our 6 ‘Best Buys Now’ Shares Passive income ideas I’d use with £500 a monthcenter_img Image source: Getty Images. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. 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.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…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 ideasWhen 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 mixThat 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 growthAny 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” See all posts by Christopher Ruane Christopher Ruane | Tuesday, 9th March, 2021 last_img

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