How I’d invest £250 a month to earn a passive income for life

first_imgSimply click below to discover how you can take advantage of this. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Peter Stephens | Sunday, 17th January, 2021 Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Making an attractive passive income over the long run does not necessarily require large sums of capital. Nor does it need an investor to constantly buy and sell stocks depending on which sectors are outperforming the wider stock market.Rather, a simple buy-and-hold strategy that focuses on purchasing high-quality companies at low prices can produce a large portfolio. From this, a generous income can be drawn that provides financial freedom in the long run.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…A buy-and-hold strategy to make a passive incomeIt is tempting to buy and sell stocks over a short period when aiming to make a good passive income over the long run. After all, events such as the recent stock market rally can lead to sizeable profits for investors. This may lead them to lock-in profits and seek to repeat their success elsewhere.However, a buy-and-hold strategy may be more effective in building a portfolio long term. It means lower commission costs and potentially less effort than a plan to trade stocks regularly. And it also allows holdings within a portfolio to deliver on their potential. This is especially relevant at the present time. After all, a number of solid businesses may take many months, or even years, to recover from their present-day challenges.Furthermore, a buy-and-hold strategy can lead to a larger passive income in the long run. It allows compounding to have a positive effect on a portfolio’s value. Over time, this can turn even modest monthly investments into sizeable sums of capital.Buying high-quality stocks at cheap pricesAs well as using a buy-and-hold strategy, buying high-quality companies at low prices can have a positive impact on an investor’s passive income prospects. The past performance of the stock market has shown that recoveries from its declines have always taken place. Therefore, using market cycles to buy undervalued shares can be a means of outperforming the wider index.Certainly, some stocks are priced at low levels because they have weak finances, lack a competitive advantage or face major challenges that may derail them. However, other stocks currently have low valuations based on weak near-term operating outlooks. These are likely to reverse as the world economy’s prospects improve.Investing money to make an income returnEven if an investor merely matches the high-single-digit annual returns of the stock market, they could make an attractive passive income in retirement with a modest monthly investment. For example, investing £250 per month at an annual return of 8% would produce a portfolio valued at £375,000 within 30 years. From this, a 4% annual withdrawal equates to an income of £15,000.By purchasing strong businesses at low prices and holding them for the long run, it is possible to beat the stock market’s returns. This may lead to an even more appealing income in the coming years. “This Stock Could Be Like Buying Amazon in 1997” Our 6 ‘Best Buys Now’ Shares Enter Your Email Address Image source: Getty Images. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. How I’d invest £250 a month to earn a passive income for life See all posts by Peter Stephenslast_img read more

Continue reading