There are plenty of ways to generate income from an investment portfolio, but dividend stocks are by far my favourite. By simply holding a position in a dividend-paying enterprise, money automatically starts pouring in without having to lift a finger. Depending on how much initial capital an investor has, it can take some time for a dividend income stream to become significant.
But even when starting from scratch, a small monthly contribution may be all that it takes, thanks to compounding returns. With that in mind, let’s take a look at how to start earning an extra £100 a week. Crunching the numbers Right now, the offers a respectable dividend yield of around 3.
6%. That £100 a week translates to £5,200 a year. Therefore, at this yield, my portfolio would need to be worth just shy of £145,000 to hit this target.
That’s obviously not pocket change. However, the FTSE 100 also provides capital gains. And historically, that’s helped push the index’s average return to around 8%.
So if I were to regularly invest a small sum each month, say £250, I could actually build a £145,000 portfolio in just under 20 years. Frankly, it’s quite a long time to wait. The journey could be significantly accelerated by investing more capital each month.
But since that’s not a luxury all investors have, there’s another solution – . Right now, there are over 50 dividend stocks in the offering a yield of at least 6%. While not all of these are going to be terrific investments, th.