How much would I need in a Stocks and Shares ISA to earn £300 a month?

The Stocks and Shares ISA is looking even better for passive income. What kind of outlay could be needed to earn a monthly £300?

| 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.

It keeps getting harder for folks to make their money work for them. Interest rates are heading in one direction only. Cash ISAs might be below a couple of percent soon enough. Regulations are putting a squeeze on renting out a buy-to-let. Through it all, the Stocks and Shares ISA looks better and better by comparison. 

Those of us who have these accounts got a boost recently too. The new Budget left ISAs well and truly alone, even directly stating the generous £20k deposit limits were guaranteed until 2030. Most pleasingly, there weren’t even any rumours circling around about ending the tax-free nature of these accounts. I reckon those in charge have realised the Stocks and Shares ISA isn’t worth going after. 

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.

Should you invest £1,000 in Phoenix Group Holdings Plc 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 Phoenix Group Holdings Plc made the list?

See the 6 stocks

How much?

A good way of taking advantage of these accounts is to look at what kind of cash return I could get. Say I wanted £300 a month. That’s a nice little target, even if I’m not retiring on it. How much would I need to get it?

A dividend-focused portfolio targeting 5% returns a year requires a £72k lump sum. That’s fine and dandy if I was looking to withdraw, but what if I wasn’t? What if I wanted to maximise my return and go for the oft-mentioned 10% a year figure? Then I’d need a £36k lump sum instead. 

Of course, one criticism of the 10% figure is that UK stocks have missed that target in the last few years. Even if we expect underperformance to continue, and the long-term data of British stocks and shares suggests it won’t, we have an ace in the hand. The Stocks and Shares ISA offers me near-complete geographic freedom. 

I could buy the shares in Dutch semiconductor firm ASML, Danish pharma giant Novo Nordisk or Japanese gaming titan Nintendo all without getting up off the sofa. That’s not even mentioning the undisputed king of stock markets, at least in this century, just across the pond

One to consider

Apple (NASDAQ: APPL)  is one American stock I hold. I’m not aiming for a repeat of its frankly unbelievable growth, up 60 times or so in the last 20 years however. It’s the biggest company in the world now. Its products are found (even saturated) in every major market. It’s also trading at 30 times earnings so is undeniably expensive.

Created with Highcharts 11.4.3Apple PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

But as far as mature companies go? I think it’s a great one. Revenue’s still growing, up 8% on  average in the last five years. Pair that with huge cash reserves, modest debt and one of the most loyal fanbases the world over and I’m pretty happy with it. Oh, and it’s got billionaire investor Warren Buffett’s stamp of approval too – it’s his biggest holding.  

No one has a crystal ball when it comes to investing, but I reckon Apple’s a stock worthy of further research.

5 Shares for the Future of Energy

Investors who don’t own energy shares need to see this now.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.

While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions, he says. Mark believes 5 companies in particular are poised for spectacular profits.

Open this new report5 Shares for the Future of Energy — and discover:

  • Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
  • How to potentially get paid by the weather
  • Electric Vehicles’ secret backdoor opportunity
  • One dead simple stock for the new nuclear boom

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

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.

John Fieldsend has positions in Apple. The Motley Fool UK has recommended ASML, Apple, and Novo Nordisk. 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.

Our best passive income stock ideas

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

More on Investing Articles

Number three written on white chat bubble on blue background
Investing Articles

Just released: the 3 best growth-focused stocks to consider buying in April [PREMIUM PICKS]

Our goal here is to highlight some of our past recommendations that we think are of particular interest today, due…

Read more »

Happy young plus size woman sitting at kitchen table and watching tv series on tablet computer
Investing Articles

£10,000 invested in Watches of Switzerland shares 1 year ago is now worth…

Watches of Switzerland shares have been decimated by Trump’s tariffs on Switzerland. Dr James Fox explores whether this is an…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Investing Articles

Growth stocks are crashing! Here’s what I’m doing now

Our writer shares his thoughts as growth stocks get crushed, as well as a favourite from the Nasdaq that he…

Read more »

Investing Articles

What’s going on with the Nvidia share price now?

The Nvidia share price is tanking. Once the most valuable listed company, Nvidia has seen more than $1trn wiped off…

Read more »

Investing Articles

This FTSE AIM stock has £2.3bn in net cash, and a market cap of £2.4bn!

I love this FTSE AIM stock, but it really hasn’t delivered for me yet. The stock trades with crazily low…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

Down 15% in a week! Are these 5 FTSE 100 fallers screaming buys as markets plunge?

Five of Harvey Jones's favourite FTSE 100 stocks all have the same thing in common – they've fallen around 15%…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

2 stocks that have been crushed and now offer a ton of value

Edward Sheldon has been scanning the market for stocks that offer value after the sell-off. Here are two shares he…

Read more »

Light trails from traffic moving down The Mound in central Edinburgh, Scotland during December
Investing Articles

£10,000 invested in Aston Martin shares at Christmas is now worth…

Aston Martin shares have fallen from above £10 in early 2020 to pennies today. Is this the perfect time for…

Read more »