£ 15K of passive income a year? It is possible with the correct dividend strategy!

Many people dream of obtaining passive income while sleeping, but few understand the specific strategies to achieve that goal.

Actually, there is a wide range of options, some that are quite easy and other extremely difficult. Establishing a business, for example, can be lucrative, but is risky and requires a lot of initial time and effort.

Investing in dividend shares is much easier, but still implies time, money and a secondary risk order.

At this time, the United Kingdom market seems like a great place to begin. For a rare moment in history, the Ftse 100 He is overcoming the S&P 500 for a period of 12 months.

However, there are still many high performance dividends shares that are sold at discount prices.

Grab your calculator

Ok, thus £ 15,000 a year, that is a large part of passive income. How many dividend actions are needed to achieve that? Well, dividends differ from stock to stock, but we can have an idea of ​​their performance value. This is the percentage that each pays the price of the action.

A £ 100 action with a yield of 7% pays £ 7 each year and a portfolio of shares worth £ 20,000 with a yield of 7% pay £ 1,400.

Some quick calculations tell me that around £ 214,000 are needed to return £ 15,000 a year.

That is a lot of dividend stocks!

<h2 class="wp-block-heading" id="h-which-stocks-might-be-best”>What actions could be the best?

In my portfolio, I try to aim at actions between 5% and 9% for my average yield to be around 7%. I think this is a realistic objective for the average investor.

Carry Legal and generalFor example, with its 9%yield. It is possibly the most popular dividend action in the United Kingdom, and for a good reason. He has a very long story to demonstrate his dedication to shareholders by constantly increasing dividends.

For income investors, this is usually the most important factor. When a company reduces or reduces dividends, it can devastate a passive income strategy. L&G never loses a rhythm, increasing dividends by around 5% to 20% each year.

Yes, it has some risks (just like everyone). For example, as an asset manager, it is strongly exposed to market movements, if the prices of assets collapse, the price of their action could also.

To help counteract this, regularly buy your own actions to increase the value of the action. Currently, it is planning other £ 500 million in addition to an earlier £ 1 billion.

But it is just an action that is worth considering. Other good examples include Aviva, HSBC and Imperial brands. Building a portfolio of 10 to 20 similar high quality dividends shares is the first step in this strategy.

But what about £ 214,000?

That is the slow part. To achieve that objective requires regular investment, patience and compound yields.

Let's say an investor puts £ 300 per month in a 7% portfolio with a moderate appreciation of the price of 4%. Even with reinvested dividends, it will take more than 20 years to reach £ 214K.

But as they say, time is money. So start as soon as possible and who knows, maybe one day both the time and money will be available in abundance!

Here a The silly fool We are always exploring new and exciting ways for investors to achieve their dreams of passive income.