Passive income is my key to happy investing: how I’d start today

first_img Generating buckets of cash streaming into my bank account through passive income has definitely made me a happier investor. The lack of effort required to maintain this position is certainly one of the best things about it. I am, at heart, quite a stunningly lazy man. I’m happy to do the research at the start, of course. I don’t mind digging deep to find the right dividend-paying companies. But once I’ve made my choice and set up regular investments into my Stocks and Shares ISA? I want my investments to take care of themselves. 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…Then I can sit back and cream off the profits without lifting a finger. In this article I’ll explain how I started, and — with the benefit of hindsight — what I’d change in order to make passive income faster and more profitably.The passive income promiseIt has made a huge difference to my portfolio to have dividend-paying income stocks contributing passive income.I make sure that every month I’m reaping the benefits of tying my progress to companies with proven revenues and dividend payouts over a long period of time.I would swerve away from young companies when picking dividend stocks. I think it’s the longer-standing companies that offer the best opportunities to boost my portfolio and provide lucrative passive income. Step one, two, threeThe first thing I would do if I was starting all over again is to simply save more money. Once I began setting aside £100 a month, it became clear that I didn’t actually need to hold all that capital as cash. In today’s near-zero interest rate environment, my hard-earned money is losing value every day it rots away in my current or savings account.High-yield dividend stocks and shares, by contrast, offer a much better rate of return. Greater than investing in real estate, fine wine, or classic cars, that’s for sure. And the benefits of a passive income also create compound gains, too. This is the second thing I’d change and a critical point I didn’t really understand when I started investing.Reinvest for successHolding on to stocks that pay out dividends year after year means I can increase my shareholding in that company, if I choose to. Instead of immediately taking dividends out of my account as income? I’d start off by reinvesting every dividend payment to buy more shares. Then the proportion I can take out as dividends in future increases. The final thing I’d do if I had my time again would be to broaden my focus. Now I see that if I had picked traditionally defensive companies selling household staples, tobacco or defence prodcuts, I might have been able to grow passive income faster. This point is especially true now with the global economic outlook so uncertain in so many sectors.With dividends now returning to most FTSE 100 companies my choices are much better than they were six months ago. Today I’d be looking at the likes of Imperial Brands, BAE Systems, or Unilever to deliver the passive income I require. 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. Simply click below to discover how you can take advantage of this. 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. Tom Rodgers | Monday, 11th January, 2021 Our 6 ‘Best Buys Now’ Shares Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! TomRodgers has no position in any of the shares mentioned. The Motley Fool UK has recommended Imperial Brands and Unilever. 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.center_img Enter Your Email Address 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. “This Stock Could Be Like Buying Amazon in 1997” Passive income is my key to happy investing: how I’d start today Image source: Getty Images. See all posts by Tom Rodgerslast_img

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