Are £ 150,000 enough to generate £ 1,000 per month in passive income?

How much do investors need shares to win £ 1,000 per month in passive income? At first glance, the answer could be as low as £ 150,000.

Win 1,000 per month of a portfolio of £ 150,000 requires an average dividends yield of 8%. And there are many actions from the United Kingdom to consider offering that level of performance at this time.

B & M Retail value

An example is B & M Retail value (LSE: BME). The action has a yield of 11% (including an annual special dividend), but there are reasons to worry about the business at this time.

For several reasons, similar sales have been decreasing. While the company can seek to compensate this in the short term by opening more stores, it cannot do it indefinitely.

This means that investors should consider whether the current dividend is probable is sustainable in the long term. And it is probably worth noting that this year's special dividend was lower than the previous one.

However, the United Kingdom retailers have generally gone through a difficult period. And it could be the case that B&M prosper when things recover, which could make the action a bargain to think at this time.

Legal and general

Legal and general'S (LSE: LGEN) A completely different type of business. But the action comes with a dividend yield of 8.8% and the company has been working quite well.

In its most recent update, the firm announced a greater dividend and a repurchase of shares of £ 500 million. That is something encouraging, but investors must take into account that there are genuine risks to consider.

The nature of life insurance contracts and pension risk transfers makes actions inherently risky. The possibility of a large and unexpected responsibility is almost impossible to rule out. I believe that this uncertainty is the reason why legal and general actions trade with such a great dividend yield. But passive income investors may want to consider it as a possible portfolio action.

Taylor Wimpey

A third action with a dividend yield above 8% is Taylor Wimpey (LSE: Tw.). It is fair to say that the housing builder of the United Kingdom has had difficulty increased inflation and high interest rates.

This has been a problem throughout the industry and action now comes with a dividend yield of 8.4% as a result. And the company is actually more resistant than most when it comes to shareholders' returns.

Taylor Wimpey has a policy of distributing effective depending on its asset base, instead of its cash flows. That means that it tends to maintain its dividend even during cyclical recessions.

In my opinion, the greatest risk with actions is a continuous investigation of the competence and market authority. But investors should weigh this with a great potential reward that is offered.

Diversification

I think an investor can absolutely build a portfolio that generates 8% a year in dividends. And that is enough to convert £ 150,000 into cash in £ 1,000 a year into passive income.

However, high dividend yield can be a sign that the action is risky, even more than the shares are generally. But a way of trying to limit this is to build a diversified portfolio.

Fortunately for investors, the United Kingdom has some high performance actions in various different industries. That does not eliminate the risk completely, but hopefully it should limit it a bit.