My Scottish Mortgage shares just paid me £14.88. It’s another step towards making a million

Harvey Jones has just received a measly dividend from his Scottish Mortgage shares, but he’s got big, big plans for the money.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

When I added 294 Scottish Mortgage (LSE: SMT) shares to my portfolio at £6.76 each in June last year, I thought I was making a dire mistake. In fact, I almost sold them straight away. I feared I’d been dazzled by a heroic past performance that it would never repeat.

The Scottish Mortgage Investment Trust flew during the early stages of the US tech stock boom, then lost half its value when the sector crashed in 2022. I can’t resist a bargain, but then I began to wonder. Just because a stock or trust has fallen 50%, doesn’t mean it can’t fall another 50%.

Also, the guiding light behind the trust, James Anderson, had retired. New lead manager Tom Slater talked a good game, but fund managers often do. Also, I was worried by the high number of private, unquoted shares in the portfolio. There was plenty of scope for disaster here.

Should you invest £1,000 in Persimmon right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Persimmon made the list?

See the 6 stocks

My Scottish play

But I noticed that whenever investor sentiment jumped, Scottish Mortgage jumped a little higher. So I held on and when it started climbing, I bought 270 more shares three months later at the higher price of £7.34. 

Today, I’m much more content with my decision. So far, my shares are up 27.2%. Over one year, the Scottish Mortgage share price is up an impressive 39.74%. But that’s not my only reward. I’m also been getting a small but steady stream of dividends.

Created with Highcharts 11.4.3Scottish Mortgage Investment Trust Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Nobody in their right mind thinks of Scottish Mortgage as a dividend stock. A quick check online will show the yield is just 0.47%. Yesterday, it paid me the first dividend of the year. It was worth £14.88. That’s not exactly life changing. It might buy me a pie in a pub (but not a pint to go with it). Still, every little helps.

Those dividends roll up

I also got £9.02 on 15 December last year. A pittance, yes. But it should slowly roll up as Scottish Mortgage has a track record of dividend growth, as my table shows.


20202021202220232024
Dividend per share3.25p3.42p3.59p4.10p4.24p

Now here’s the thing. It’s not the only UK company sending me spots of cash from time to time.

This morning, FTSE 100 sportswear retailer JD Sports Fashion sent me £10.42 and GSK paid £22.35. Beauty make-up retailer Warpaint London paid me £28.92 on 5 July. Last month, Unilever paid me £26.45 and Legal & General Group handed me £266.86 (that’s more like it). In May, wealth manager M&G sent me a bumper £408.27.

Plenty of other companies are doing the same. The dividends keep rolling into my portfolio, without me doing anything.

I reinvest every single one back into the same stock, again, without doing anything. I’m getting a steady, passive income and it should grow over time. In a decade or also, after I’ve retired, I might start drawing those dividends as income.

I’ll probably never quite make a million but, step-by-step, I’m getting a little bit closer by the day. And Scottish Mortgage is doing its bit. Mostly with growth, but with a little dividend income too. Let’s hope it continues to do so.

Of course, there are plenty of other passive income opportunities to explore. And these may be even more lucrative:

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Harvey Jones has positions in GSK, JD Sports Fashion, Legal & General Group Plc, M&g Plc, Scottish Mortgage Investment Trust Plc, and Warpaint London Plc. The Motley Fool UK has recommended GSK, M&g Plc, and Warpaint London Plc. 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.

More on Investing Articles

Investing Articles

10% dividend yield! Here’s a FTSE 100 share to consider in April for passive income

This FTSE 100 stock just soared past the 10% yield mark, making it a potentially lucrative option for investors targeting…

Read more »

Young black woman using a mobile phone in a transport facility
Investing Articles

3 FTSE 100 safe haven stocks to consider as trade wars bite

I'm confident in the long-term outlook for the FTSE index of stocks. But these blue chips may protect investors from…

Read more »

Investing Articles

Here’s how Trump tariffs could hand us some top passive income bargains

As tariff terror grips the stock market, it's time for passive income investors to steel our nerves and look for…

Read more »

Investing Articles

These FTSE shares may offer some safety as Trump slaps tariffs on trading partners

FTSE shares moved lower on 3 April, after US President Donald Trump introduced hefty tariffs on its trading partners. These…

Read more »

Investing Articles

6.8% dividend yield! Consider these 2 ‘secret’ passive income stocks to target a £1,360 payday in 2025

Looking for ways to generate above-average dividend income? These lesser-bought income stocks are worth a close look.

Read more »

Elevated view over city of London skyline
Investing Articles

The M&G dividend yields over 10% — and could get higher!

Christopher Ruane explains why he's upbeat about the long-term outlook for the M&G dividend yield and would happily buy the…

Read more »

Young Caucasian man making doubtful face at camera
Investing Articles

2 popular UK growth stocks I wouldn’t touch with a bargepole in today’s market

Buying growth stocks can deliver market-beating returns, but this FTSE 250 pair doesn't look like a convincing investment for our…

Read more »

The flag of the United States of America flying in front of the Capitol building
Investing Articles

10 FTSE shares falling today after President Trump’s tariffs bombshell!

Our writer explains why JD Sports Fashion from the FTSE 100 and a diverse bunch of other UK stocks are…

Read more »