The long-term aim of many investors is to build a pot big enough to generate lots of passive income. But how much would be enough? <\/p>\n
Well, according to the Office for National Statistics, the median gross annual salary for someone aged over 60 in the UK is currently \u00a337,804. Or the equivalent of \u00a33,150 per month.<\/p>\n
Should you buy Polar Capital Technology Trust Plc shares today?<\/p>\n
Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from Trump’s tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.<\/p>\n
That’s why this could be an ideal time to secure this valuable research \u2013 Mark’s analysts have scoured the markets to reveal 5 of his favourite long-term ‘Buys’. Please, don’t make any big decisions before seeing them.<\/p>\n
To earn this much from dividends each year inside a Stocks and Shares ISA would be a significant achievement, in my opinion. Remember, this figure would be tax-free, unlike the gross salary figure cited above (a fair chunk of which would usually be taxed).<\/p>\n
So, how long could it take someone starting from scratch to reach this amount? Let\u2019s dive straight in.<\/p>\n
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.<\/p>\n
An illustration<\/p>\n
A portfolio of dividend shares yielding<\/a> 5% would need to be worth just over \u00a3756,000 to throw off \u00a337,804 a year. However, with a 6.5% yield, a \u00a3582,000 ISA would do the trick. That\u2019s quite a big difference.<\/p>\n Either way, they\u2019re not puny sums. But the good news is that it would take around 21 years to reach \u00a3582k by investing \u00a3700 per month.<\/p>\n I don\u2019t think that\u2019s a pie-in-the-sky target, for someone who is willing to prioritise long-term wealth creation.<\/p>\n However, this figure assumes three things:<\/p>\n A 10% average annual return<\/p>\n Dividends are reinvested (rather than spent)<\/p>\n No platform fees are incurred during this period<\/p>\n In reality, a 10% return isn\u2019t assured, while even \u2018free\u2019 investing apps come with some sort of cost<\/a>. Meanwhile, dividends can be suspended or axed completely, as well as rise higher. So this is just an illustrative example.<\/p>\n Still achievable<\/p>\n That said, a 10% return isn\u2019t out of the ordinary. It\u2019s only slightly higher than the FTSE 100\u2018s annualised total return over the past decade (9.17%). The S&P 500\u2018s total return is even higher, at closer to 14%.<\/p>\n FTSE 100 trailing total returns (annualised)<\/p>\n 3 years5 years10 years13.95%12.82%9.17%Data source: AJ Bell<\/p>\n What\u2019s more, a wide variety of FTSE 100 stocks have delivered truly exceptional 10-year returns. These include Games Workshop (+3,827%), Diploma (+856%), Rolls-Royce (+392%), BAE Systems (+310%), 3i Group (+453%), and Antofagasta (+630%).<\/p>\n Of course, I\u2019m cherry-picking some of the best performers here. But these are hardly secret stocks \u2014 they\u2019ve been knocking about for decades! <\/p>\n Investing in the future <\/p>\n Sticking with the FTSE 100, a stock that I think is worth considering for the long term is Polar Capital Technology Trust (LSE:PCT<\/a>). As the name suggests, it\u2019s an investment trust<\/a> focused on technology.<\/p>\n Let\u2019s face it, the world is only going to get more digital in future, especially with game-changing technologies like AI and quantum computing advancing at a rapid pace. This trust offers wall-to-wall exposure through 96 holdings, including Nvidia, Alphabet, Taiwan Semi, Meta Platforms, and Broadcom.<\/p>\n The big risk to performance would be a sell-off in companies that are benefitting from the global AI buildout. However, it\u2019s worth mentioning that the portfolio managers have their finger firmly on the pulse when it comes to emerging (and shifting) Silicon Valley trends.<\/p>\n As such, I feel the portfolio is in very good hands, with room to pivot away from danger if necessary. For example, its exposure to software, which has been under massive pressure due to AI disruption fears, is highly selective.<\/p>\n","protected":false},"excerpt":{"rendered":"The long-term aim of many investors is to build a pot big enough to generate lots of passive…\n","protected":false},"author":2,"featured_media":550331,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[84,59,56,54,55],"class_list":{"0":"post-550330","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-gb","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/550330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=550330"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/550330\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/550331"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=550330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=550330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=550330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}