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Yahoo
2 days ago
- Business
- Yahoo
Here's how much passive income a 21-year-old investing £60 a week could earn by 35!
One way some financially savvy people earn passive income is by regularly investing money into shares that pay dividends. I like that approach for a number of reasons. It is simple, allows someone to benefit from the hard work of successful companies, and can be adapted to each person's own financial circumstances. For example, imagine someone starts doing this aged 21, with £60 a week. Here is what they could be earning by 35. One approach would be to invest the money and receive any dividends along the way. Personally, I prefer a second approach, which involves reinvesting those dividends (known as compounding). Compounding at an annual rate of 7%, the portfolio ought to be worth over £72,600 by 35. At a 7% dividend yield, that could generate around £5,083 of passive income each year. I think 7% is a realistic target in the current market while sticking to carefully selected blue-chip shares. Dividends are never guaranteed. Compound annual returns can be affected by share price moves too – prices can down as well as up. So, careful selection of a diversified portfolio of quality shares is the order of the day. Before getting onto that, though, it is necessary to have somewhere to put that £10 each week. So a useful, practical first move to put this passive income plan into action would be to set up a share-dealing account, Stocks and Shares ISA, or trading app. Another important step – and one I think it is well worth taking time over if necessary – is looking for income shares to buy. What makes for a good income share? Different people have their own ideas, but I think it is helpful if a company has a proven ability to generate more spare cash than it needs. So, it can be helpful for a company to have a mature business that does not require very high ongoing investment. An example of such a company I think investors should consider is British American Tobacco (LSE: BATS). The Lucky Strike maker has long been a massive cash generator. Cigarettes are cheap to make but can be sold expensively – and it sells millions every day, around the world. The dividend yield stands at 6.6%. British American is one of the few FTSE 100 companies to have raised its dividend per share annually for decades. No dividend is ever guaranteed, though. Cigarette use is declining in many markets and that poses a risk to profits for British American. Whether it can keep its cash cow generating lots of spare cash in coming decades, while building its non-cigarette business, will be critical when it comes to the firm's long-term performance. That will matter for many investors' passive income plans. For now, at least, British American's brand portfolio, multinational operations, and large customer base mean that it continues to generate sizeable free cash flows. The post Here's how much passive income a 21-year-old investing £60 a week could earn by 35! 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 C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
£10,000 invested in Greggs shares a year ago is now worth…
Over the long term, Greggs (LSE: GRG) has been a decent stock market performer. In the past five years, Greggs shares have moved up 18%. Over 10 years, the share price is up 69%. More recently, though, things have looked far less rosy – something I see as an opportunity. Take the past year as an example. During that time, Greggs shares have lost 31% of their value. So, someone who invested £10,000 in the bakery chain a year ago would now be nursing a paper loss of around £3,100. Ouch. Now, there would have been dividends along the way too. The current yield is 3.6%, although the higher share price a year ago means that someone who invested then would be earning around 2.4%. That would still have added up to approximately £240 over the course of year. That does not much help the overall performance, though, given that £3,100 paper loss. What has gone wrong? City worries about weak growth combined with higher costs due to increased staff wage bills have hurt investors' confidence in the stock. Those fears have some grounding in reality, I reckon. They are risks. But I think the worry has been overdone. Last month, the company announced that sales grew in the first 20 weeks of the year. Not only did total sales grow, but even stripping out new shop openings and just looking at the like-for-like sales, there was growth of 2.9%. That sounds modest but does not indicate a company in poor health to me. The sausage roll maker has not changed its expectation for cost inflation and kept its full-year outlook the same as before. In other words, things sound like they are ticking over pretty much fine. Combined with ambitious shop opening plans, that could mean that Greggs has significant medium- and long-term growth opportunities ahead of it. It has a proven business model, strong brand, and an ability to create consumer buzz about what are essentially mundane products. That gives it pricing power. However, while I am upbeat about the outlook, the price fall in Greggs shares means that they now sell for 13 times earnings. That strikes me as cheap for a company like this one, that I think could be even more profitable in future than it is now. So I bought some Greggs shares several months ago. Last week, I then bought some more. I decided to act, not wait, as I do not expect the current price to be around in the long term. This is because I think the share looks undervalued. I am glad I did not invest a year ago, as I would now be nursing a large paper loss. At today's price, though, I reckon Greggs shares look like good value, so I was happy to invest. The post £10,000 invested in Greggs shares a year ago is now worth… 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 C Ruane has positions in Greggs Plc. The Motley Fool UK has recommended Greggs Plc. 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
Yahoo
2 days ago
- Business
- Yahoo
With £10 a week, here's how to start buying shares
One of the misconceptions some people have about the stock market is that it is only for the rich. In fact, it is possible to start buying shares with just a few pounds. Here is how someone with no stock market experience could start investing with a spare £10 a week. Before buying any shares, it is important to get set up in the right way. Partly that means having a way to invest. So an investor should set up something like a share-dealing account, Stocks and Shares ISA or trading app. That way they can put the £10 into it each week. But I think a new investor also needs to set themselves up in terms of thinking about what they are doing. Learning how the market works can take a lifetime, but it is important to have at least a basic grasp of important concepts like valuation and diversification before you start buying shares. Shares sell for different prices – some for pennies, while others are priced in the hundreds of pounds or more. A tenner a week adds up to around £520 a year, so in the beginning only some shares will be within affordable reach. One option when investing small sums is to buy shares in a pooled investment, such as an investment trust. Such trusts typically own a diversified portfolio of shares themselves. So investing in them can be a simple way for an investor to get a certain level of diversification even on a limited budget. If I was to start buying shares for the first time, I would be looking for the same thing I am after decades in the stock market: buying into great businesses at attractive prices. Sometimes that might be because I hope a share price can grow. Other opportunities appeal to me because of the passive income streams I could earn from dividends. Some shares offer both growth and income potential. One share I think investors should consider is construction equipment rental group Ashtead (LSE: AHT). Over the past five years, its share price has grown 79%. Despite that, it currently sells for around 16 times earnings. Such a price-to-earnings ratio is one way investors value shares. I think 16 is decent value for as high-quality a business as Ashtead. It has a sizeable asset base primarily in the US and a large set of existing and returning customers. Its business model is proven and Ashtead is undergoing a strategic transformation to try and boost its performance even further. The dividend yield is 2.3%, well below FTSE 100 peers, but I would be willing to accept that (I own Ashtead in my own portfolio) as I am hopeful that the share price may rise over time. One reason it might not is a weak economy leading to a slowdown of construction projects Stateside. That could hurt both revenues and profits at Ashtead. From a long-term perspective though, I think the stock is one for further research. The post With £10 a week, here's how to start buying shares 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 C Ruane has positions in Ashtead Group Plc. The Motley Fool UK has recommended Ashtead Group Plc. 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 Sign in to access your portfolio
Yahoo
07-06-2025
- Automotive
- Yahoo
Is this the Tesla stock buying opportunity I've been waiting for?
Down by 22% in little over a week, Tesla (NASDAQ:TSLA) sometimes seems to be behaving more like a penny share than a company worth almost $900bn that last year had a revenue close to $100bn. Still, I have been eyeing Tesla stock as a possible addition to my portfolio for a while already – so could this latest crash offer me the sort of buying opportunity I have been hoping for? My answer depends on the price, something I will get into below. First, though, I ought to explain why I like the idea of owning some Tesla stock at all. The company is barely more than two decades old. But it has already built up a massive global manufacturing and sales footprint for its electric vehicles. Sales volumes declined slightly last year (and that decline has accelerated this year), but remain substantial. I think Tesla's recent history points to two important factors. First, it is a serious contender in the electric vehicle space. That is a competitive area and Tesla risks rivals like BYD leaving it behind, but it has strengths such as proprietary technology, a vertically integrated business model and unique designs. A second point also jumps out at me from Tesla's development. It has demonstrated expertise not only in imagining new products, but in bringing them to market at scale and quickly. It is doing the same now with its power storage division, which, unlike the car business, had a very strong first quarter. Such expertise could help Tesla capitalize on some of the other ideas that sit somewhere between its drawing board and widespread real world use, from automated taxi fleets to robotics. That matters because, seen purely as a car company, Tesla stock would look wildly overvalued to me. As far as I am concerned, the only possible justification for the current valuation, let alone a higher one, is the potential of the company's plans beyond the electric car business. That, however, is where I start to have serious concerns about valuation, even after the recent crash in Tesla stock. While the power storage business is growing quickly, even taken together with the car business I do not think the joint valuation ought to be anywhere close to $900bn. Meanwhile, the other ideas are highly speculative for now – it remains to be seen when they are commercialized at scale, if they ever are. So I think it is hard to justify anything more than a fairly modest valuation for them at this point, no matter how large the long-term potential may seem to be. Taken as the sum of the parts, I do not think Tesla is worth anything like its market capitalization. So, although the share is cheaper than a couple of weeks back, it is still far too expensive for me to consider buying yet. The post Is this the Tesla stock buying opportunity I've been waiting for? 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 C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Tesla. 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 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-06-2025
- Business
- Yahoo
This popular UK stock is shifting to the US. Here's what I think it means for the share price
In news out today (5 June), Wise (LSE:WISE) announced that it's planning to list its shares in the US. The move would see the US listing become the company's main one while maintaining a secondary listing on the London Stock Exchange (LSE). The news came as a surprise to some, but the stock rocketed over 12% higher on the news. Here's what I think happens next. For the LSE in general, it's not great news. It's yet another company shifting to the US. For several years, there have been worries about low valuations and weak liquidity in UK markets, which has meant several management teams have decided to look across the pond. Some companies have moved to the US with the primary listing and then decided to cancel the UK listing altogether. There are no immediate signs that Wise will do the same, but it's probably a thought in the back of some investors' minds. In terms of the specifics why Wise has chosen to move, the CEO commented that 'we believe the addition of a primary US listing would help us accelerate our mission and bring substantial strategic and capital markets benefits to Wise and our owners'. He also noted the US is 'the biggest market opportunity in the world for our products'. The immediate reaction to the share price clearly shows positive sentiment. Firstly, being listed in the US will allow retail investors there to more readily buy the stock. Yet more than that, the listing will create more publicity around the business. If Wise can then gain more traction and scale, it will grow revenue and profits. This, in turn, should help the share price of the UK listing rally. With the second listing, Wise will be able to raise more capital. This can be used to develop new products and enhance the offering to clients. I see this as a good thing, as it means the business does not have to use debt or even retained earnings to fuel its growth. As a fintech company, Wise faces a lot of competition. Not only are there other disrupters in this space, but traditional banks are also trying to regain some of the lost market share. Therefore, Wise has to try to stay ahead of the game; otherwise, customers could be easily lost. Another factor is valuation. With a price-to-earnings ratio of 97, it's certainly not cheap! The stock is up 45% over the past year and has hit fresh 52-week highs this morning. I think the optimism around the jump today should ease off, but when I look at the stock with a long-term lens, I think the move to the US could be a smart move. I'm putting it on my watchlist to consider buying once the dust settles on this news. The post This popular UK stock is shifting to the US. Here's what I think it means for the share price 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 Jon Smith has no position in any of the shares mentioned. The Motley Fool UK has recommended Wise Plc. 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
