This is how a 50 -year -old could aim for a passive income of £ 1,400 a month of an ISA

Many people in the United Kingdom at 50 years of age or older have no savings, and there are no plans to obtain passive income over their state pension. But it is not too late to start investing in the United Kingdom stock market.

But first, I want to put an idea to rest. I have no idea what the next great winner will be, and I don't know any shortcut from Get Rich-Rich-Cick.

Look all the big names to invest. Warren Buffett, Benjamin Graham, the others … How many were super fast? I don't see any.

In front of challenge with optimism

A 50 -year -old will face a harder challenge that someone with a couple of decades more ahead. But the old are hard and the task, right?

We may need to continue working a little more, maybe up to 70. But that can change us instantly to a more optimistic perspective. How much more inspiring is asking “20 years ahead, what can I achieve? that “I am 50 years old, is it too late?“

Keep in mind that the income of the shares are not guaranteed. And as shares prices sometimes fall, we could also lose part of our investment. That makes diversification essential, even more than for someone with 50 years of potential investment ahead of them.

Instant diversification

That is why I love investment trusts. I think all the newcomers of the stock market should consider them before anything else. An investment trust distributes the cash of its shareholders in a range of investments, significantly reducing the risk associated with individual shares.

Investment Trust of the City of London (LSE: CTY) is one of my favorites. His goal is that the income of the United Kingdom's actions had increased their dividend for 58 years in a row. The forecasts put the dividend yield by 4.7%. Trust invests in HSBC Holdings, Shell, BAE systems, Astrazeneca, American British tobacco… Those are just five of its 10 main holdings, and we can see the diversification we are obtaining.

There is still no security guarantee, so I would buy others to accompany him. The greatest danger is possibly losing its increase in dividends for a year, since that could scare investors to sell.

In addition to dividends, we are seeing a profit gain of 40% shares in the last five years. And the Ftse 100 Return since 1985. The trust is prior to the index in some way, since it has been launched until 1891.

Do you probably return?

I think this is the type of stock that could at least approach future long -term feet yields, which have averaged 6.9% per year. So, if our 50 -year -old can match that, through this or other investment trusts or through individual actions, what could they achieve?

Someone who could afford to invest £ 500 per month could end with a pot of £ 252,000 after 20 years if they can average that annual 6.9%. And that could be sufficient to obtain more than 17,000 passive income at the same annual rate, or around £ 1,400 per month.

Do you still think it is too late to open Isa actions and actions and start investing?