How much we need depends on how much we hope to withdraw. There’s a rough rule that suggests taking 4% per year.

The idea is that should still leave enough capital to grow with inflation for the future. Based it on that, the sums are easy. We need £500,000 by age 60 to take out £20,000 per year.

25 years? Nah!

That’s not a trivial task. But the miracle of compound returns makes it look more achievable.

What we need to do is reinvest any dividend cash we get into new shares. And then those new shares earn us extra dividends next year, which we then can use to buy even more shares… and so on.

Over the past 10 years, the average Stocks and Shares ISA has returned 9.6% annually. That’s ahead of the annual FTSE 100 average over the past 20 years, approximately 7%. Let’s take the more conservative of those two figures.

How soon?

Invest the full ISA limit every year in shares, and buy new shares with all dividend cash. With an annual 7% return, we could reach the half million in a bit less than 15 years.

Someone age 45 today could reach £500,000 by 60. But… a 40-year-old who starts today could have £850,000 by the same age. Starting just five years earlier could result in a 70% bigger passive income pot!

Now, we can’t all reach the ISA limit every year. But whatever we can afford to invest, the key thing is that starting sooner can make a huge difference.

Starting earlier could make another difference too.

Empire strikes back

We all dream of finding the elusive multi-bagger. And the more years we have at our disposal, the better our chances. Looking at what’s happened to Empire Metals (LSE: EEE) reminds me of that — it’s up 460% over the past 12 months, and more than 1,000% in five years.

Even with such a rise, Empire has crashed more than 90% since 2010 — click the ‘ALL’ link in the chart above to see.

It’s a mining explorer, going after precious and rare metals. Companies like that can be very risky. And once they get way down in penny-share territory, they often never make it back.

But then, the company made a titanium discovery in Australia in 2023, which gave it a boost. And now we have some clues of the size.

An update on 14 October described it as “One of the largest and highest-grade titanium resources reported globally.” Estimates suggest there’s more than 200m tonnes of titanium oxide down there.

Balance is best

I’m not saying we should pin our passive income hopes on finding big winners. In fact, it’s easy to lose 100% on a speculative investment like this. As it happens, Empire shares have already fallen back from September’s peak.

But the more years of investing ahead of us, the more we can consider risking a small amount on a stock like this. I’m thinking about it for my ISA.

The post How much do you need in an ISA to target a £20,000 passive income at 60? appeared first on The Motley Fool UK.

At 10.5p per share, Rockhopper Exploration (LSE: RKH) still has some way to go. But if the price carries on the way it has over the past few years, we could see some nice gains.

We’re looking at a 55% fall in the past five years, though that does cover the pandemic. But since the lows of late 2020, Rockhopper shares have doubled.

Oil price

The rising oil price will be partly behind the Rockhopper share price rise. And it does show one thing that I’ve been convinced of for some time.

Everyone’s talking about renewable energy, and how it’s going to completely replace fossil fuels some day. But I reckon it’ll surely take a lot longer than people might think. It’s a long-term risk.

The main attraction has to be the size of Rockhopper’s potential resources. In September last year, the firm estimated its peak production volume at around 80,000 barrels per day. And that’s with costs of under $30 per barrel.

Still risky

The company seems to have a decent amount of cash, though there’s no actual profit yet.

Now, if oil should fall closer to that $30 again, Rockhopper could be in trouble. And it did fall way below that in 2020, remember.

But I’m keeping my eye on Rockhopper this year, and I think it could be a good one. FY 2023 results should be with us in April or May.

Soaring share price

The Empire Metals (LSE: EEE) share price took off like a rocket in late 2023, meaning it’s up more than 500% in the past 12 months.

It’s been way higher in the past, though. So it’s clearly made it to the penny stock ranks by starting off well and then hitting hard times.

Still, at today’s 11p price, the shares have nearly doubled in the past five years. So, are we in for a growth stock rebound here?

What does it do?

Empire digs for a number of metals, including copper, gold, and what it describes as other high-value minerals.

Copper prices seem to be holding up. And there’s big demand for all sorts of rare metals these days.

But the big excitement is Empire’s 2023 titanium discovery. In November, the firm announced a big find in Australia, including a good depth of high-grade titanium dioxide.

What’s the risk here?

That sounds good, but investors do face some risks.

For one thing, Empire is still making losses — of £1.04m in the first half of 2023. At the time, it had £1.4m in cash and equivalents on the books.

It has, though, achieved that reasonably healthy position thanks to new share issues. This means we face a risk of dilution if we buy now.

Still, with titanium in such critical demand, I think the firm’s market cap of just £70m does not look stretching. I think this could be another to watch in 2024.

The post Rockhopper and Empire Metals: the best UK penny stocks to buy today? appeared first on The Motley Fool UK.

Titanium, essential in various sectors from defence to consumer products, is on many Western countries’ critical minerals lists.

Houston, we have lift off

On New Year’s Eve, The Mail on Sunday tipped the company’s shares as a top buy for 2024. This was followed by a 20% one-day rally on the first trading day of the year, from 9.3p to 11p.

It’s possible the Empire Metals share price will cool off in the short term, as the enthusiasm created by the coverage dissipates.

Strong geology

The company’s 2023 interim results have been particularly encouraging. The share price surged over 150% last year, primarily driven by the Pitfield discovery.

Early exploration activities, including soil geochemical sampling and induced polarisation surveying, have reinforced the belief that Pitfield hosts a giant metal-rich mineral system.

The maiden drilling campaign has further confirmed the presence of a large-scale titanium deposit with consistently high TiO2 grades. The findings also indicate potential for multiple copper deposits within this system.

What tomorrow brings

The company reported a loss of £1m for the six months ended 30 June 2023. Its cash position was £1m at the time of the report. Following a successful £3m placing, the cash position is around £3.8m. This allows Empire Metals to expand its exploration campaign at Pitfield.

Empire Metals is now intensifying its exploration efforts. The current drilling program focuses on confirming high-grade titanium mineralisation and exploring the high-density core identified by an airborne gravity survey.

Despite the focus on Pitfield, Empire Metals also holds other promising projects in its portfolio. For example, the Walton Project, granted an exploration licence in April 2023, is located in a highly prospective area for copper, gold, and lithium. Exploration at Walton is expected to commence in 2024.

Given the potential of the Pitfield project to develop into one of the largest primary titanium mineral deposits ever discovered, the shares at 11p could represent a significant opportunity. The recent exploration success positions the company well on the global stage.

However, as with any early-stage exploration firm, investing in Empire Metals comes with risks. Technical and permitting delays have a habit of causing costs to spiral for early-stage exploration companies. That usually leads to the company diluting existing shareholders through new issuance. Indeed, the company will have no choice but to raise a lot more capital if it plans to build a functioning mine at Pitfield.

In light of substantial capital requirements and the euphoria surrounding the company currently, I have no plans to add Empire Metals to my portfolio.

The post At 11p, is this penny stock a screaming buy? appeared first on The Motley Fool UK.