Earlier this month, the annual contribution deadline for an ISA came and went. Some investors took advantage of the opportunity to put more money into their ISA, but many did not.

As one door closed, though, another opened.

We are now in a new tax year, replete with a fresh ISA contribution allowance.

Millions of people may end up not fully utilising their allowance this year. But I think not using an ISA can lead people to miss out on some potentially valuable benefits.

Here are three of them.

1. The discipline of a deadline

Have you ever scrambled to try and meet a deadline, whether for a test, a work meeting or a payment?

Deadlines can be annoying. But they often succeed in achieving the goal of getting people to do something they would otherwise happily keep kicking down the road.

Lots of people think they want to start investing, but put it off year after year – and sometimes decade after decade.

Using the annual ISA allowance as a motivation to start buying shares during the current tax year can be a helpful nudge to stop procrastinating.

2. Keeping dividends shielded from tax

One of the things I like about a Stocks and Shares ISA is that if shares inside it pay dividends, I can keep them inside the tax-free wrapper.

That means that I do not have to pay income tax on those dividends, as I may have to do if they were held outside a tax-free wrapper, for example in a share-dealing account.

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.

Why does this matter?

It means that the process of compounding could be even more powerful, as the dividends can be used exclusively to buy more shares, not for paying tax.

For example, one share I think investors should consider right now is FTSE 100 financial services provider Standard Life (LSE: SDLF). It offers a dividend yield of 7.4%.

This means that if someone makes a £10k investment in Standard Life in their ISA today, it will hopefully earn around £740 per year in dividends. Free of tax, those dividends could be used to buy more shares.

The £10k compounded at 7.4% for a decade ought to more than double in value, to over £20k.

3. Capital gains that aren’t taxed

Untaxed dividends are not the only potential tax advantage of a Stocks and Shares ISA.

Capital gains that accrue inside the ISA are not taxed when the money is ultimately withdrawn from the tax wrapper. So an ISA can offer an effective way to grow capital value, away from the clutches of HMRC.

That can be a big deal. Over the past year alone, for example, the Standard Life (formerly known as Phoenix Group) share price has grown 31%.

With its chunky dividend yield, an aim to grow the payout per share annually, and strong recent performance, Standard Life’s appeal can seem obvious.

Longer term though, the share price has performed weakly, losing 1% over the past five years.

Partly that reflects a risk I still see: choppy financial markets could force the company to write down the value of some assets, hurting earnings.

But with its massive UK customer base (one in five UK adults are clients) and strong brands, I think Standard Life could continue to be a strong cash generator.

The post Decided not to bother with a Stocks and Shares ISA? You might be missing these 3 things! appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Is it worth investing in UK shares?

Past performance is not necessarily a guide to what may happen in future. But it can still provide an interesting perspective on how UK shares have fared over time.

The FTSE 100 has been doing well

Take the flagship FTSE 100 index of leading blue-chip shares, for example.

Over the past decade, it is up by 67%. So, someone who put £15,000 in back then ought now to be sitting on a portfolio worth a little over £25,000.

Not only that, but there have been dividends along the way.

Today, the index yields 3.1%. But someone who invested a decade ago would be earning around 5.1%, thanks to the growth in the index price over those 10 years. So they ought to be earning close to £780 per year in dividends.

Plus, they would have earned dividends every year in the past decade.

Dividends at a company are never guaranteed and one of the benefits of investing in a diversified group of 100 firms is that any one company cutting or cancelling its payout has a limited impact on the overall yield of the index.

What about the FTSE 250?

Of course, the FTSE 100 only represents some of the London market.

The FTSE 250 is composed of small and medium-sized firms. Over the past five years, it is up – but only by 1%!

So, £15,000 invested five years back would now be worth around £15,150.

There is a dividend and, currently standing at 3.9%, the yield is more attractive than the FTSE 100 one. On £15,000, that yield would provide around £585 of passive income per year.

Looking beyond index tracking

It might seem that the lesson is that bigger is better. But a five-year historical snapshot is not necessarily indicative of what to expect in future. I own FTSE 250 as well as FTSE 100 shares.

One way to invest in an index (like either of those) is to buy shares in a tracker fund. An alternative approach can be buying individual UK shares, although when I do this I still make sure my portfolio remains diversified.  

Lots of people buy individual shares thinking they can beat the index, but in practice this can be more difficult than it looks.

For example, consider my investment in B&M European Value Retail (LSE: BME).

While the FTSE 250 index has not done much in the past five years, it has at least done far better than B&M. The FTSE 250 retailer’s share price has collapsed 68% during that period. Ouch!

The 7.5% dividend yield is close to double the FTSE 250 average. But even taking that into account, the share has destroyed, not created, value for shareholders over the past five years.

I bought during that price fall, so my loss to date is smaller, but I remain in the red on this particular UK share. B&M has struggled to compete well enough on price in recent years and I see that as an ongoing risk.

But at seven times earnings, I see the current price as a possible bargain and have no plans to sell.

B&M has a large customer base and economies of scale that could potentially help get it back on track.

The post £15,000 invested in UK shares a decade ago is now worth… appeared first on The Motley Fool UK.

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C Ruane has positions in B&M European Value. The Motley Fool UK has recommended B&M European Value. 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.

Just how much money does it take to make money? Or, put another way, if someone wanted to target a second income of £500 a month on average without working for it, what sort of investment in dividend shares might help them hit that goal?

Dividend yield: important, but be careful

The answer to that question depends on the average dividend yield their ISA earns.

Dividend yield is basically how much someone earns in dividends annually, expressed as a percentage of what they paid for the shares that pay them.

So, take the £500 as an example. That is £6k per year.

At a 10% yield, that would require an ISA worth £60k. Halve the yield and the requirement doubles: at a 5% yield, the ISA would need to be £120k.

That makes it sound like the way to go could be to buy high-yielding shares.

But looking out the window today and seeing that today is sunny does not automatically mean the weather will be sunny a month from now.

Similarly, historic dividend performance can tell us something about how a company’s business has performed in the past – but is no guarantee it will do so in future.

I try to look at how much spare cash a company looks set to generate in future.

That is a judgement and it could be proved wrong: even the best businesses can run into unforeseeable difficulties. Diversifying the ISA across different shares can help reduce the impact of such events on the second income, but it is also important to focus on the quality of the shares one buys.

Setting a realistic target

If 10% seems unrealistic (no FTSE 100 share currently offers such a yield although some FTSE 250 ones do), what about 5%?

It is well above the current yield of either of those indexes, but I do see it as a realistic target in today’s market.

I said above that would make a Stocks and Shares ISA worth £120k. But that does not need to be a lump sum.

Someone could start from nothing and build up the ISA to that size through regular contributions, perhaps speeding things up by initially compounding (reinvesting) dividends.

Why not consider this dividend share?

One share I think investors ought to consider for its dividend potential is ME Group (LSE: MEGP).

After a 22% share price fall over the past year, the operator of Photo-Me booths sells for just 10 times earnings and offers a 5.8% dividend yield. I see that as attractive.

Demand for passport photos and mementos is proving more durable in the digital age than some people expected, although long-term decline in photo booth use is a risk for the FTSE 250 company.

Fortunately, it has many other strings to its bow, from laundry machines at garages to orange juice makers in some of the many markets in which it operates globally.

This is a cash generative business, which can be good news for dividends.

A recent delay in last year’s results unnerved the City. But when published, they revealed a 9% uplift in cash generated from operations, to over £2m per week on average. The annual dividend per share was boosted 10%.

The post How big does an ISA need to be when aiming for a £500 monthly second income? appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

Ever thought about retiring as a millionaire? The ravages of inflation means a million pounds does not go as far as it used to – but it could still make for a much more comfortable retirement. Something many people do not realise is that this does not require a lottery win or striking it big in the stock market. Drip-feeding money in to well-known FTSE 100 blue-chip shares over the long term could be enough on its own for someone to build a seven-figure portfolio.

Slow and steady over the long term

FTSE 100 shares are not necessarily the best companies from an investment perspective.

Many are already large and mature, meaning their growth prospects could be small or non-existent.

With 100 companies in the index, inevitably some will do poorly over time.

So, what is the appeal?

I see it as a question of balancing potential rewards with risk tolerance. While the FTSE 100 may not be stuffed with racy growth options, it does offer access to sizeable, well-established businesses that typically have proven commercial models and staying power.

Over time, that can be a rewarding set of companies in which to invest.

Investing for the decades to come

For example, imagine someone puts £500 per month into a Stocks and Shares ISA and compounds it at 5% annually.

After 41 years, the ISA will be worth over £1m. Yes, that is a long-term timeframe – but it means that for under £20 a day, somebody could realistically aim for a million.

Is a 6% compound annual growth rate realistic for a diversified cross-section of FTSE 100 shares (or, say, an index tracker)?

I think so. At the moment, the index yields around 3.1% from dividends, and I reckon an additional compound annual gain of 3% or so in share price over the long term is feasible.

Building a hand-selected portfolio

As I mentioned above, one approach would simply be to ‘buy the index’ by investing in a tracker fund.

Personally I do not do that, instead preferring to try and choose specific FTSE 100 shares that I think have strong long-term potential.

Of course, even good businesses can go through bad patches, so rather than plumping for a single such blue-chip share, I diversify my portfolio across a few different ones.

One share I reckon investors ought to consider right now is insurer Aviva (LSE: AV).

Thinking about the future

With its 6.2% dividend yield, the FTSE 100 firm could potentially meet the 6% target I mentioned above.

I say potentially because there are a couple of caveats.

Dividends are never guaranteed at any company. Indeed, Aviva cut its payout sharply in 2020.

Another caveat is share price gain potential. Aviva’s share price is up 56% in five years, slightly beating the FTSE 100’s 51% gain. But past performance is not necessarily an indicator of what to expect in future.

As the UK’s largest general insurer, Aviva faces the risk that smaller rivals could try to build market share by competing on price, costing it either market share or profitability.

Still, that scale is also an advantage. The FTSE 100 company is well-established, with deep insurance expertise and a large customer base. I regard those as strong competitive advantages.

The post How much do you need to invest each month into FTSE 100 shares to aim for a million? appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I understand why Aston Martin (LSE: AML) shares — down 95% in five years and now selling for just pennies apiece — may grab many bargain-hunters’ eyes.

After all, with the high prices the luxury car marque can charge for its legendary vehicles, the company seems like it ought to have a license to print money.

But, of all the UK and US shares I own, Aston Martin is not one of them.

Not only that, but there are literally hundreds of shares in the London and New York market that I think have more attractive long-term prospects right now.

High debt load

For starters, there is the company’s net debt. Net debt is basically a company’s debt, balanced out against cash and cash-like assets.

Many companies have debt. In fact, for some of them it can be a way to accelerate growth, if their cost of capital is lower than the return they make on it, for example, by buying new machines and using them to improve their manufacturing capability.

But two things concern me about Aston Martin’s net debt.

One is its scale. It stands at £1.4bn.

That is a large amount for a company with a market capitalisation of £400m. It has also been growing, despite the company repeatedly diluting existing shareholders to raise new funds by selling more shares. And that is something I think could happen again in future if the business keeps burning through cash.

A second concern is the interest rate. On that £1.4bn net debt pile, the company expects to pay around £150m of net interest this year. That works out at over £17k of net interest per hour.

Why is the interest charge so high? Aston Martin’s lenders have been able to charge a high interest rate because the loss-making business needs the money and has limited options when it comes to finding a lender willing to take on the risk.

Myriad listed companies have a lower net debt relative to their market cap (or none at all) and less costly loan terms.

Unproven business model

But given how costly Aston Martin cars are, could it try to raise sales volumes and use its pricing power to get more money from its deep-pocketed customer base when selling them a car?

Yes, it could. Indeed, that is one of the attractive elements of the investment case. However, last year wholesale sales volumes fell by double-digit percentage terms, revenue slumped by more than a fifth, and the already large loss before tax grew by over a quarter.

Tariffs threw an unexpected spanner in the works. Perhaps this year will be better on that front. But then again, there are other risks such as weakening customer demand in an uncertainty economy.

Aston Martin has brilliant assets. However, since its current incarnation, listed in 2018, it has not been able to show it can consistently translate those brand and engineering assets into a profitable business.

Even without the net debt, I generally prefer to invest in businesses that have proven they can consistently make profits, not losses. With net interest costs of £17k per hour, the lack of a profitable business model becomes even more problematic.

Fortunately, the market is stuffed with shares benefitting both from proven business models and much healthier balance sheets than Aston Martin’s.

The post There are hundreds of shares I’d rather buy than Aston Martin. Here’s why! appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.

I remain fairly excited about being a shareholder in Greggs (LSE: GRG). I see the iconic high street baker with a proven business model as undervalued. Still, Greggs shares have not been going anywhere fast. They are down 5% so far in 2026, 11% over the past year, and 30% on a five-year timeframe.

That sort of consistent downward trend suggests that much of the stock market does not share my bullishness about the outlook for the sausage roll purveyor.

So, while continuing to weigh up what I see as the attractive points of the investment case, I have also been thinking about whether I am missing or mis-sizing some of the possible risks.

Higher energy prices are bad news

For starters, there is the impact of the Middle Eastern war on energy costs.

Greggs has thousands of shops. It also has multiple large production facilities. Each uses some electricity.

Unlike a paper shop or ironmonger where the main electricity use is keeping the lights and heating on, Greggs’ entire business model involves baking. That requires heat – and lots of it, given that the company shifts millions of tasty food items each week.

Its electricity costs alone could eat significantly into the company’ s profitability this  year and beyond, I fear.

No AI pie in the sky — just pies!

Recent years has seen the prospect of some companies cutting large numbers of jobs as people get replaced by AI.

That seems unlikely to happen at Greggs, given the manually intensive nature of much of its business model.

The company has said that, at the head office level, AI functionality is “being developed to drive service standards and efficiencies”. But I reckon this will have modest overall impact on a business that has over 2,700 physical shop locations.

In a time of growing employment costs, due to wage rises and tax increases, that is also a risk to profitability.

Indeed, for this year the company expects that ”employment cost inflation will again be the biggest driver of higher costs”, even though that inflation may be lower than in the past several years.

Eating habits are changing

The growth of appetite suppression pills is potentially a significant disruptor to customer demand for certain types of food.

But that is only one of the risks that could eat Greggs’ lunch (while its customers stop eating their own!). Another is shifting eating habits more broadly.

Greggs has become ubiquitous through growing to thousands of shops and planning further ones, alongside rolling out frozen goods in hundreds of Tesco shops. That opens up an opportunity for regional rivals to try and take some of its market share with more innovative, localised product offerings.

Here’s why I’m hanging on

Still, I am a long-term investor and that informs my approach here.

Greggs’ like-for-like growth is modest – but it is still growth. Add new store openings to that and it become substantial.

The company has a proven business model, a powerful value proposition for customers, and is profitable. The fall in Greggs shares has pushed the yield up to a tasty 4.3%.

That is enough to keep me happy, as I hold on in the hope of long-term share price growth.

The post 3 risks to Greggs shares that could hamper a recovery appeared first on The Motley Fool UK.

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C Ruane has positions in Greggs Plc. The Motley Fool UK has recommended Greggs Plc and Tesco 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.

In recent years, there have been few if any British blue-chip shares like Rolls-Royce (LSE: RR). Over the past five years, the FTSE 100 index of leading UK shares is up 50%. During that period, Rolls-Royce shares have soared by a staggering 1,097%.

Still, the shares have been wobbling lately.

They are up on the year to date – by 5% — but that slightly lags the FTSE 100’s gain of 6% so far in 2026. The Rolls share price is around 8% lower than it was a little over a month ago.

What’s going on? Is the share taking a breather, potentially making now a good time to consider it? Or has there been a bigger change?

The business environment has shifted

In the short term, this could be a temporary breather. If the war in the Middle East conclusively ends I expect share prices could jump.

That may well be especially true of Rolls Royce, as its share price is tied to risks including weaker civil aviation demand. We saw that during the pandemic.

But I am a long-term investor – and the bigger picture here is what concerns me.

Even if the war ends soon – and there is no guarantee of that – it may take months or even years for oil prices and consumer confidence to stabilise.

That could be bad news for civil aviation demand, potentially reducing the frequency of jet engine servicing if flying hours fall. It could also hurt demand for new planes as airlines try to control their costs. I see that as a risk for Rolls-Royce shares.

The share price looks high to me

Of course, all shares carry risks. When it comes to the impact of the war, Rolls may actually be in a better position than some other shares.

For example, British Airways’ parent International Consolidated Airlines Group has fallen 10% so far this year, while easyJet and Wizz Air have ‘crashed’ 28% and 29%. Compared to that, a gain of 5% in the year to date looks strong.

But my concern about Rolls-Royce shares is that, even now, the risks may not be fully priced in. At 43 times earnings, the price looks too high to me.

Why might the share price be valued that way?

Rolls has proven in recent years that it is able to keep a tight lid on costs and consistently meet demanding financial targets. That bodes well for ongoing success.

For now, at least, concerns about civil aviation flying hours are no more than a concern – the company has not yet made changes to its outlook for the year.

Meanwhile, demand remains strong for defence and power systems. If anything, I think the war could see that trend continue.

Not for me

Still, as an investor I always aim to take risks seriously when considering what I think is a fair price for a share.

Rolle-Royce shares look overvalued to me as things stand. I think the company needs to perform brilliantly to justify its current share price, let alone a higher one.

In the current environment, some key factors outside its control pose a risk to such performance. So I will not be investing.

The post Are Rolls-Royce shares’ best days behind them? appeared first on The Motley Fool UK.

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C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce 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.

It can be confusing knowing the most suitable way to invest over the long term, for example, as part of retirement planning. There are specialist pension products like Self-Invested Personal Pensions (SIPPs). But many investors tend to focus more on what they already know: a Stocks and Shares ISA.

When it comes to pension planning, both a SIPP and an ISA can have some pros and cons.

There’s no free money in an ISA

Both vehicles can help someone to accumulate capital gains and dividends in a tax-efficient manner.

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.

But an ISA does not involve any ‘free money’ – at least not from the government. An ISA provider may have a promotion that offers a cash incentive to use them.

Believe it or not, a SIPP does offer free money. Specifically, the government offers tax relief for income tax payers contributing to their SIPP.

So, it is essentially the Exchequer giving you with one hand what they already took away with the other.

Still, that can be a substantial bonus. For example, a basic rate taxpayer who puts £8,000 into their SIPP will have £10,000 to invest thanks to the tax relief. Higher and additional rate taxpayers will find the tax relief even more lucrative.

SIPPs have some important constraints

So, why do people use an ISA over a SIPP given the free money a SIPP can involve?

One big consideration is what happens to the money after it is in the vehicle.

With an ISA, someone can decide to take the money (or some of it) out at any time. There may be several reasons why someone chooses to take money out. For example, they have an unexpected expense like higher school fees due to tax changes, or a medical emergency.

By contrast, the SIPP is designed in a way that is meant to keep people focussed on their retirement finances even when other emergencies pop up along the way.

So they cannot take a penny out of the SIPP until they are 55. Even then, only a portion of it can be withdrawn tax-free. For withdrawals over that limit, capital gains tax rules would apply.

That different tax treatment could make a SIPP less attractive, when compared to the absence of tax on capital gains made inside an ISA then withdrawn. The lack of flexibility about withdrawals before 55 may not suit some investors either.

Here’s my approach

I see benefits in both vehicles, as well as less attractive features, so I have both a SIPP and a Stocks and Shares ISA.

As a long-term investor, I try to focus on shares I think have potential for the coming decades. One I think currently merits consideration is Pets at Home (LSE: PETS).

Its share price has fallen by a fifth over the past year and now stands at just 11 times earnings.

Personally, I think pet lovers will keep spending money on their animals even when consumer spending more broadly is squeezed.

There are risks: the share price fall reflects Pets at Home’s weak retail performance. It has been trying to improve that but there is a risk that the wrong stock selection or uncompetitive pricing could still cost it sales.

The company has a large and growing group of vet practices to help offset that weakness – and a dividend yield of 7%.

The post ISA or SIPP? Some key differences to know appeared first on The Motley Fool UK.

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C Ruane has positions in Pets At Home Group Plc. The Motley Fool UK has recommended Pets At Home Group 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.

Ever thought about drip feeding money into a Stocks and Shares ISA as a way to try and build passive income streams? Lots of people do it and it can be a fairly simple way to earn some extra cash without having to work for it.

Let’s have a look at what that could mean for someone who is currently 35, has an empty ISA (or no ISA at all) and can spare £15 a day to put into one.

Keeping things simple

In this illustration, I will presume a 5% ‘dividend yield‘. Yield is what you earn from the shares in your ISA annually, expressed as a percentage of what they cost.

There can be a temptation – an understandable one, I feel – to plump for high-yielding shares. But as dividends are never guaranteed, and an unusually high yield can be a red flag that investors fear a cut.

That can happen even with low-yielding shares though, so in every case it is always important to look at the quality of a business. How sustainable does its dividend look, based on its likely future free cash flows?

Five percent is well above the FTSE 100 yield (currently 3.1%), but I do see it as realistic while sticking to proven blue-chip firms.

In my example I am presuming a 5% yield. Bear in mind that, in reality, dealing fees, commissions and other charges can eat into an ISA. So it makes good sense to compare some of the many available options when choosing one.

Income streams can grow over time

Putting £15 a day (£5,475 a year) into a Stocks and Shares ISA from 35 onwards, here are the likely passive income streams based on that 5% target yield.

At 45 – £2,737 a year, at 55 £5,475. a year and by 65, an annual passive income of £8,212.

Earning more income for the same contribution

It would be possible ultimately to earn bigger passive income streams doing exactly the same thing but with one change – initially reinvesting the dividends instead of taking them as passive income.

That is known as compounding. It can be a powerful force multiplier. If someone did that and started drawing the passive income at 45, it would be £3,443 at that point (and ought to keep growing even as they stop compounding, thanks to ongoing contributions).

Waiting until 55 should mean annual passive income of £9,051. For someone patient enough to wait until 65 to begin drawing the income, it should be a yearly total of £18,187.

Every investor’s different

Compounding might not be for everyone. Some investors are keen to start earning passive income immediately!

Either way, one share I think is worth considering for its income potential is broadcaster ITV (LSE: ITV). It aims to maintain its annual dividend per share at least as its current level. It currently has a juicy yield of 6.6%.

A key risk here is declining advertising revenue. In weak economic periods, advertisers tend to spend less. Digital proliferation is an ongoing risk to ITV’s ad revenue as well, due to its terrestrial footprint.

But ITV has been growing its digital offer. It has lots of content and advertiser relationships that can help. The company also has a large studios and production business, generating sizeable non-advertising related revenue streams.

The post Here’s how a 35-year-old putting £15 a day into an ISA could end up earning £18k+ of passive income annually! appeared first on The Motley Fool UK.

More reading

• Here’s how investors can aim for £11,363 a year in passive income from £20,000 in this overlooked FTSE media gem
• With its 6.5% dividend yield, is ITV a buy for my Stocks and Shares ISA?
• £20,000 in savings? Here’s how it could realistically be used to target £633 of passive income each month
• 2 bargain-basement income stocks to consider in an ISA

C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV. 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.

2026 has certainly so far been a busy year in the stock market, with wild swings. Some shares I own have done brilliantly (S4 Capital is an example). For others, like Lululemon, it has been a very bad few months. Amid stock market turbulence, it can be easy to let emotion take over where rationality could be more helpful – potentially a costly mistake. That is why, as markets continue to seesaw, I am following the wisdom of billionaire investor Warren Buffett.

Nobody’s forcing you to act

One of the things Buffett likes about the stock market is that you do not have to do anything. He has said that, if the market closed for a decade, it would not bother him.

That may sound odd. But compared to other types of investment, I see it as a big advantage of share ownership.

By contrast, imagine you own a rental property or small business. Even if you went 10 years without selling it (or buying a new one), there would still be plenty to do. You might have to renovate the property, for example, or keep working in the business.

Compare that to shares. You can buy a share – something Buffett thinks of as a small stake in a business, not just a piece of paper. You can hang onto it without doing anything. There is no need to lift a finger. With some shares, you may even receive regular financial rewards simply for owning the share, in the form of dividends.

Riding the storm

That is nimportant, because it means that no matter how panicked other people may start to be during a period of stock market volatility, there is typically no need for a shareholder to act if they do not want to.

If you own shares and believe the underlying value of the business remains unchanged, a tumbling share price does not matter. As Buffett notes, the market offers you a price at which you can buy or sell a share each day it is open – but you have no obligation to act on it.

Buffett’s own approach in such a situation tends to be simply riding out the storm. Having owned some shares for decades, he has hung onto them through thick and thin in the wider stock market, because he continues to believe in their investment case.

On the hunt for bargains

But a rocky market can throw up some bargains. Take ExxonMobil as an example. During the 2020 stock market crash, it traded for as little as a fifth of the all-time high price it has hit over recent weeks. That means a huge capital gain for some shareholders.

On top of that, the company has raised its dividend per share annually for decades. The yield is 2.6% — but for a buyer at the lower price back in 2020, the current yield would be over 13%.

Current oil price volatility is a risk to the company’s earnings. For now, I will therefore not be investing.

But ExxonMobil’s underlying strengths today remain the same as in 2020: a large base of proven energy resources, long extraction and marketing expertise and a cost-efficient operation.

ExxonMobil is on my watchlist in case future market turbulence again marks its stock down to a bargain price.

The post As markets seesaw, I’m taking the Warren Buffett approach to building wealth! appeared first on The Motley Fool UK.

More reading

• Starting with nothing? Here’s why now is the perfect time to start building a passive income
• Decided not to bother with a Stocks and Shares ISA? You might be missing these 3 things!
• Why is everyone buying GSK shares?
• £10,000 invested in easyJet shares at the start of 2026 is now worth…
• 5 years ago, £5,000 bought 2,645 Barclays shares. But how many would it buy now?

C Ruane has positions in Lululemon Athletica Inc. and S4 Capital Plc. The Motley Fool UK has recommended Lululemon Athletica Inc. 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.