How can I create passive income with UK stocks



I really like the idea of ​​creating passive income using dividends from UK stocks. Let me tell you why. For me, passive income is having enough side income to pay for treats. I don’t have any aspirations to be the next Warren Buffett, but I want to enjoy great, safe meals knowing that I can comfortably afford them.

Make no mistake, I have no illusions about generating constant passive income from UK equities. If it was easy, everyone would be doing it already! I believe, however, that if I put in the work, in addition to listening to informed opinions, I can create a stable passive income stream for myself.

5 actions to try to create wealth after 50 years

Markets around the world are reeling from the coronavirus pandemic … and with so many large companies trading at what appear to be ‘coupon’ prices, now may be the time for savvy investors to close. potential business.

But whether you are a new investor or a seasoned professional, deciding which stocks to add to your shopping list can be a daunting prospect during an unprecedented time.

Fortunately, Motley Fool UK’s team of analysts shortlisted five companies that they believe STILL offer significant long-term growth prospects despite global upheavals …

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Why British stocks, however, and not something like buy-lease?

I know there are other ways to generate passive income besides investing in UK stocks, but I don’t think they will work for me. Arguably the most popular alternative method in the UK during this century has been to invest in property for rent, but the good times seem to be spent there.

The introduction of a 3% stamp duty on the second property in 2016, followed by changes to mortgage tax relief in 2017, has eroded homeowners’ profits in recent years. This is before you even consider the initial capital required to buy a property for rent. All in all, I will pass.

Investing in UK equities: realistic and accessible

I feel like I have a more realistic chance of creating stable passive income from UK stocks. Buying and selling stocks is more accessible than ever, and I don’t need a daunting amount of expense to get started.

In part, I’m inspired by an old saying about savings that I was first told in school: “Spend 70% of your earnings, save 20%, and donate the rest to charity.” “. Now whether or not I stick rigidly to these percentages is up for debate, but the general idea strikes me as fair enough.

The main difference is, with interest rates at historically low levels, I don’t think putting all of my savings in a bank account is going to be of much use. I prefer to take the calculated risk of being able to make my money ‘work harder’ by redirecting some of my regular savings to high yielding UK dividend stocks. Not all of my savings, mind you: I know I have to balance my potential risk.

A UK dividend equity strategy that I will pursue

Some UK companies are turning to paying extremely high dividends because without a dividend the business seems like an unattractive investment, for whatever reason. I probably won’t be looking to invest in this kind of business because there is too much risk associated with the stock price going down.

Instead, I’ll look at companies with a strong track record. While I know that past performance is no guarantee of future performance and dividends are never guaranteed, I will take comfort in knowing that a company has been performing very well. A company like Coca Cola immediately comes to mind here. I’m sure I can find more if I do my homework.

5 actions to try to create wealth after 50 years

Markets around the world are reeling from the coronavirus pandemic …

And with so many large companies still negotiating at prices that appear to be “containers of discounts,” perhaps now is the time for savvy investors to close potential deals.

But whether you are a new investor or a seasoned professional, deciding which stocks to add to your shopping list can be a daunting prospect during an unprecedented time.

Fortunately, The Motley Fool is here to help: Our UK CIO and his team of analysts have shortlisted five companies they believe STILL offer significant long-term growth prospects despite the global foreclosure …

You see, here at The Motley Fool, we don’t think “over-trading” is the right route to financial freedom in retirement; instead, we advocate buying and owning (AT LEAST three to five years) at least 15 quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of these five companies in a special investment report that you can download today for FREE. If you’re 50 or older, we think these stocks could be a great fit for any well-diversified portfolio, and you may want to consider taking a position in the five straight away.

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Garry McGibbon has no position in the stocks mentioned. The Motley Fool UK has no position in any of the stocks mentioned. The opinions expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that considering a wide range of ideas makes us better investors.


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