No savings at 40? I’d invest £500 a month to make a £20,000 passive income from dividend shares

first_img 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. Making a generous passive income in retirement could be a realistic prospect for investors who buy UK dividend shares on a regular basis. In many cases, they offer good value for money at the present time. And they could become increasingly popular in a low-interest-rate environment.As such, now could be the right time to start building a portfolio of income shares. Even an investor aged 40 with no retirement savings may be able to obtain a worthwhile nest egg in the long run with a modest monthly investment.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…Increasing popularity of stocks offering passive incomeThe most obvious appeal of dividend shares at the moment is their passive income potential. In 2021, the prospects for interest rates are relatively uncertain. However, it appears unlikely at the present time that they will move significantly higher than their current 0.1% level by the end of the year. In fact, there is a reasonable chance that they will head into negative territory. This would be due to the impact of lockdown measures on the economy’s performance.Therefore, income investors may be pushed from cash and bonds due to the low returns on offer. They may be pulled towards dividend stocks because of their high relative yields. For example, many FTSE 100 shares currently have yields that are in excess of 4% or even 5% at the present time. This may make them relatively attractive opportunities for passive-income-seeking investors. And this could lead to rising stock prices over the long run.Growth opportunities among UK dividend sharesFurthermore, dividend shares provide an opportunity to make a growing passive income in the long run. The dividends paid by many FTSE 350 companies have fallen over the past year due to a weak economic outlook. However, the UK economy’s prospects will improve in the coming years. So it seems likely that dividends could grow at an above-inflation pace. This may further increase the appeal of dividend stocks. And it could lead to rising share prices that outperform the wider stock market.Even buying dividend shares that only match the performance of the stock market, could mean a generous income return in the long run. For example, say an investor purchases £500 of shares per month and matches the FTSE 100’s annual historic total returns of 8%. They could have a nest egg valued at £630,000 by the time they reach the current retirement age of 68.From this, a passive income of £25,000 could be drawn by spending 4% of the capital each year. This is similar to the average yield of the FTSE 100, and could provide a greater degree of financial freedom in retirement. As such, now could be the right time to start buying dividend shares regularly to achieve a more attractive financial outlook for retirement. Image source: Getty Images. “This Stock Could Be Like Buying Amazon in 1997” No savings at 40? I’d invest £500 a month to make a £20,000 passive income from dividend shares Peter Stephens | Monday, 4th 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! Enter Your Email Address 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. 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. See all posts by Peter Stephenslast_img

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