£ 10,000 in savings? This is how an investor can point to £ 3,560 in annual passive income

Everyone dreams of buying an action and seeing it on value overnight. But this is far from being the only way to earn money from the market. An alternative is to buy dividend shares that generate passive income.

Today, I will explain how an investor could do this using a very popular business in the United Kingdom as an example.

Without guarantees

From the beginning, it is important to keep in mind that dividends are never guaranteed. A slide in profits could affect the capacity of a company to distribute a proportion of that money to investors. Even if things are Tickety-Boo, management can choose to put more effective to improve the business in the hope that it is worth long-term.

That is why being the owner of a lot of income shares in a diversified portfolio is a prudent movement.

Now, let's say someone had £ 10,000 to put to work in Isa's actions and actions. The amount really does not matter, since it has a single action in a company still entitles the investor to receive any paid dividend, even if it equals only a few cents. The beauty of doing all this in an ISA also means that this cash will be beyond the reach of Taxman.

Keep in mind that tax treatment depends on the individual circumstances of each client and may be subject to changes in the future. The content in this article is provided only for information purposes. It is not intended to be, it does not constitute any form of fiscal advice. Readers are responsible for carrying out their own due diligence and obtaining professional advice before making investment decisions.

An example to consider buying is Juggernaut de Insurance Aviva (LSE: Of.)

Star dividend stock

I do not think it is particularly controversial to say that Aviva is not the type of company so that the heart accelerates. That said, the price of the action has already increased by 18% in 2025! It has also increased almost 150% in the last five years, more than double the increase achieved by the Ftse 100 index as a whole.

Much of this elevation is due to the (successful) efforts of the Amanda Blanc CEO for steam the business selling non -basic assets. The recent rival capture Direct line It also seems to have had a good time with the market.

Naturally, there are still risks here. Any problem with the integration of Direct Line could affect the financial performance of Aviva. The broader economic concerns, such as rebound in inflation, could also have an adverse effect on profits and, consequently, dividends. Speaking of that, the performance of the Aviva forecast is found in 6.7%fleshy. That is almost double the average in FTSE 100.

In other words, £ 10,000 inverted would deliver £ 670 in passive income in fiscal year 2015. This means that nothing changes from here. Actually, of course, the price of shares will rise up or down (changing the performance). There is also the possibility that analysts have underestimated or underestimated probable payment.

But it still gives us a number to work.

Commitment is required

At this point, you probably have seen a problem. That £ 670 is not close to the £ 3,560 mentioned at the top of this page. Is left over?

Well, an investor really needs to continue reinviring that money to reach the latter. This allows the composition to work with its magic over time. In this way, that the possession in Aviva would reach our passive income goal in 25 years, assuming that dividends are not cut (which is not guaranteed).

Does it sound like a long time to wait? It doesn't have to be so. Remember that all this is based on not investing a single penny after That original £ 10,000.

Even only a few extra quid every month will be enough to accelerate the process!