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of FTSE 100 And FTSE 250 They are happy hunting grounds for investors looking to build long-term passive income.
of London Stock Exchange It is full of large companies operating in stable, mature industries. As the Schroders chart below shows, this makes the UK an excellent place to trade for dividend stocks.
Life changing passive income
The London Stock Market’s large volume of high volume stocks has long made it a very profitable place to invest. In the year Between 2011 and 2021, the average annual return for stocks and shares ISA investors reached 9.64%, according to wealth manager Moneyfarm.
This type of long-term return should not smell. Saving in a cash account certainly beats the modest returns you get. But I think with some careful research I can find stocks with even better returns.
Let’s say I set up my investment strategy to make an average return of 12% per year. If I invested £200 a month and successfully achieved this target, I would make a nest egg just shy of £580,000.
This type of sum can help me retire with a comfortable regular income level. If I applied the famous 4% withdrawal rule and drew this amount down each year, I would have an annual passive income of £23,168.
Hit the market
Of course, there are no guarantees when it comes to investing in stocks. The market can go up but it can also go down.
However, over time, they have proven to be a very effective way for investors to make money. There’s a reason they’ve been popular for ages.
And people have made far greater returns than the market average for investing prudently. The emergence of the stocks and shares ISA millionaire over the past decade is evidence of how such a careful approach can make investors a life-changing sum.
3 high dividend shares
I want to charge my income by buying UK dividend stocks. Rio Tinto In 2022 I bought a large yielding mining share. And I intend to add. Glencore And 9.4% dividend for my portfolio.
Like Rio Tinto, I think this FTSE 100 business could thrive over the next decade as a new commodity supercycle begins. As the fight against climate change intensifies, profits from the coal sector may shrink. But I expect this will be more than offset by growing demand for and marketing of the copper, iron ore, cobalt and other industrial metals it produces.
Employment agency Page group – Yields 9.5% Market Beat – Another stock I’m looking at to grow my passive income. Earnings here may disappoint as the global economy heads into recession. However, in the long term, I believe that international expansion will help deliver strong dividends.
These are just two of the many high yield stocks currently on my radar. I think buying UK shares is a good way to build long-term wealth, with a combination of dividend income and capital appreciation.