J.P. Morgan's Chuka Umunna Sustainable Investing Outlook
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£20,000 in savings? Here's how investors can aim to turn that into a £1,680 second income overnight!
Having 20 grand in the bank is a nice lump sum of capital to get started generating a chunky second income using the stock market. When leveraging a FTSE 100 index fund, it's enough to instantly start earning £660 passive income overnight. And for investors willing to take on more risk, there are some dividend-paying stocks offering more than 8% right now. Take Legal & General Group (LSE:LGEN) as an example to consider. The insurance stock currently has an 8.4% payout, enough to start earning a £1,680 second income straight away. So what's the catch? Investigating the yield Generally speaking, a high dividend yield usually stems from a sudden drop in a stock price. Yet looking at Legal & General, that doesn't appear to be the case. In fact, the shares are actually up close to 15% in the last 12 months, and the company's been hiking shareholder payouts for the previous four years in a row. That certainly makes the high yield seem like it's here to stay. But if that's the case, why aren't more investors jumping aboard to take advantage? Despite recent outperformance, there's growing concern among institutional investors that earnings will soon be under pressure. Higher interest rates have made their long-term annuity financial products very popular in recent years, resulting in gold-rush-like growth. However, with rates coming down, demand's starting to slow. And in the meantime, all the recently-created annuity products issued during the higher interest rate environment now introduce long-duration risk exposure as well as miss-pricing risk. This creates two problems: lower future growth and increased sensitivity to market shocks. And if Legal & General fails to hedge against these threats, earnings and, in turn, dividends could end up on the chopping block. A risk worth taking? The risk of earnings pressure is why Legal & General shares offer such a generous dividend today. However, despite these looming challenges, it's worth pointing out that the company's in a fair strong position at the moment. The group maintains a Solvency II ratio of 217%. That's a very strong signal for robust financial health and provides a significant capital buffer against a market downturn. At the same time, management's been busy executing numerous operational efficiency schemes to bolster margins across its key divisions. For example, its Asset Management division's on track to steadily grow its operating profits to as high as £600m by 2028, versus the £401m achieved in 2024. And with the long-term demand for its Institutional Retirement products climbing on the back of an ageing population, dividends might be more sustainable than many investors currently think. The bottom line All things considered, Legal & General seems to offer a compelling case for investors seeking to build a second income stream. Admittedly, this comes paired with an elevated risk profile compared to other dividend opportunities in the FTSE 100. But given the level of payout, investors with a higher risk tolerance may want to investigate further. The post £20,000 in savings? Here's how investors can aim to turn that into a £1,680 second income overnight! appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
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£15,000 in savings? Here's a smart plan that could turn that into £15,000 of passive income
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London leaver: 'we put down a deposit of £1,236 and now we're renting to buy'
Priced off the housing ladder Ade Akinwale feared that he might be stuck renting for years to come. Then he discovered a backdoor route into home ownership. Until February Ade and his wife Lara, 36, were renting a three-bedroom house in Thamesmead, south-east London. With three young children, aged four, six, and eight, the house was packed to the rafters, and the circa £1,400pcm they paid in rent was stopping them saving up for a deposit. In the three years they lived there they paid out around £50,000 in rent. The couple were also keen to leave behind Thamesmead's urban sprawl and build a new life somewhere more peaceful and child-friendly. 'With three kids all at school age, we knew we had to find a suburb that could offer all the things we felt our life in London was lacking – a like-minded community, great local schools and plenty of green space,' says Ade, 42, a risk manager. Lara is a dental therapist and their joint salaries are too high for them to be eligible for a shared ownership home. So Ade began to look into Rent to Buy, a Government-backed plan which allows people to rent at a 20 per cent discount so they can save up for a deposit. In Ade and Lara's case they decided not only to move but to upsize. Their chosen property is a four-bedroom house at Capstone Green, a development between Chatham and Maidstone, in Kent. They put down a deposit of just over £1,236, and pay rent of £1,340pcm. The move, says Ade, has galvanised them to save seriously and he hopes they will be in a position to buy the house within two to three years. 'We could have stayed in Thamesmead and saved,' says Ade. 'But we would have had to wait and the house was too small. This has really made us commit to saving. It has given us drive.' Ade works from home most of the time but when he is required in the office his train journey from Chatham to King's Cross St Pancras takes around 40 minutes. And he is also impressed by how welcoming his new neighbours have been. 'What really stood out is the sense of community here as there's lots of families and everyone is so friendly. The kids have settled in so well at their new schools. 'It truly feels like we're on the right path to homeownership and giving our kids the best possible start.' For more information on Capstone Green and other rent to buy options, see
