That means more of your returns stay invested and compound over time, without the drag of income or capital gains tax.

You can invest in individual shares, funds or ETFs, reinvest dividends automatically, and adjust your portfolio as your goals change. For long-term investors focused on growing income, a Stocks and Shares ISA is hard to beat.

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.

The important question: where to invest?

Building a portfolio takes time. However, if I were starting from scratch today, I’d probably look to pick one or two stocks a month, allotting around £600 to these investments. After 20 years, and assuming a strong (but far under my average) annual return of 10%, the portfolio would be worth just shy of £460,000. That’s almost enough to generate £2k a month in passive income.

So what stocks would I consider investing in? Well, my starting point’s already the stock’s current valuation rather than long-term themes or trends. After all, a company may look well positioned to benefit from a certain trend, but it’ll be a rubbish investment if it’s already priced accordingly.

With that in mind, I typically stay away from companies like Palantir. Yes, it’s an incredibly company, but I can’t quantify its value, and that means there’s no margin of safety as it trades at 260 times forward earnings.

With that in mind, I’m more inclined to consider companies where the metrics make sense. Fresh Del Monte Produce (NYSE:FDP) is one such company. The firm operates in the production, marketing, and distribution of fresh and fresh-cut fruits and vegetables.

It owns huge plantations including 45,509 acres in Costa Rice and 8,973 acres in Guatemala. I think this is really interesting in a world where land’s increasing competed for. It also has a solid balance sheet, with a modest $243m net debt position. It’s trading around 12.5 times forward earnings, and earnings growth is expected around 17% in 2025 and 8.5% in 2026.

These figures, combined with a healthy 3.4% dividend yield, make me confident that the stock will appreciate. Analysts agree with a price target 26% above the current price.

Of course, risks exist. The company’s highly exposed to climate change and adverse weather patterns. Still, I believe it’s very much worth considering.

What else?

There’s a world of investment opportunities out there. As we look towards 2026, companies like TBC Bank, Sanmina Corporation, SkyWest, and Modine Manufacturing are also on my watchlist. I may even be tempted back to Super Micro Computer — having sold my shares almost 18 months ago — and I continue to monitor the memory AI play, potentially adding Seagate to my memory holdings like Micron Technology.

The post Here’s how to start building a passive income portfolio worth £2k a month in 2026 appeared first on The Motley Fool UK.

Taking a quick snapshot, it’s currently trading around 13.2 times forward earnings and it has a price-to-earnings-to-growth (PEG) ratio of 3.2. That’s not great, but it’s slightly better when you factor in the 4% dividend yield.

In other words, it’s a very middling stock. The yield is decent, but the rest of the valuation isn’t particularly strong. The balance sheet is starting to look a little concerning, however, with net debt representing 25% of the market cap.

Is it a quality stock? Well, it has great brand strength and it’s practically everywhere in the UK. But not really. It makes sausage rolls, not highly technical engine parts.

In short, I’m saying I’m not expecting there to be a massive uptick in demand or margins here. And essentially that’s what needs to happen to make this valuation make sense for me.

As it stands, the forecasts show negative earnings growth when averaged across the next two years.

So, what’s better value?

Honestly, there are a lot of stocks that I think are better value. But I’m going to stick with consumer goods and pick Fresh Del Monte (NYSE:FDP). Yes, the guys who make the pineapple chunks — and lots of other things.

It’s a US-listed stock as the ticker suggests, and simply, I prefer it. It’s one of the to- ranked stocks according to several quantitive models, scoring high on valuation, quality, and momentum.

Firstly, it’s cheaper than Greggs, trading at 12.2 times forward earnings. It’s also growing earnings faster, with an expected earnings growth rate around 9%.

This gives us a PEG ratio around 1.4 times, which, when combined with a 3.2% dividend yield, I think is good value. That sense of value is reinforced by strong price-to-sales and price-to-free-cash-flow ratios.

It’s also got a much stronger balance sheet. The company’s net debt is around $81.1m, which really isn’t too much of a concern for a company worth $1.4bn. For the sake of comparison, that’s around 6% of the market cap — a much safer position than Greggs.

I also like that it owns vast swathes of land, giving it a tangible asset base that underpins long-term value. Land tends to hold its worth even in volatile markets, providing a degree of security alongside growth potential.

The risks are broad, including exposure to climate and weather shocks, supply chain disruptions, regulatory and food safety issues, global competition, and fluctuations in commodity prices.

However, I still think this is a better option than Greggs, and one that should be considered by growth or dividend-focused investors.

The post What’s better than Greggs shares for 2026? appeared first on The Motley Fool UK.

Now, according to reports, the government is set to target people with incomes over £46,000 in the upcoming Budget. So, that got me asking… how much money would you need in a Stocks and Shares ISA to take a tax-free income worth £46,000 per year?

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.

Running the maths

To generate an annual income of £46,000 entirely from a Stocks and Shares ISA, the key factor is the withdrawal rate — the percentage of the portfolio withdrawn each year to fund living costs.

Using a 5% withdrawal rate, the calculation is straightforward:

• £46,000 ÷ 0.05 = £920,000

That means a portfolio worth around £920,000 could, in theory, produce a £46,000 tax-free income each year. Of course, this assumes the portfolio continues to grow enough to offset withdrawals and inflation over time.

A 5% withdrawal rate is more ambitious than the traditional 4% guideline often used in financial planning, so it carries greater risk of eroding the portfolio if markets perform poorly for a sustained period. Nonetheless, it offers a useful benchmark for understanding the scale of investment needed to generate a comfortable, tax-free income entirely within the ISA wrapper.

But that’s a lot of money?

Of course, some readers will see this and think “I could never have a portfolio worth £920,000″. Well, it’s very possible. It just takes time, consistent contributions, and a some common sense when it comes to investing.

As this graph shows, £800 of monthly contributions coupled with an average 8% return, can compound massively over the long term. In this example, an investor would have £940,000 in 27.5 years.

And as we can see from the graph, the vast majority of that money will come from interest compounding. This is when our returns start to generate their own returns.

Where to invest?

Of course, the above is theoretical, and it’s dependent on the investor making the right investments. So, where to invest? Well, one stock that I believe is worth considering is Fresh Del Monte (NYSE:FDP).

It’s got nothing to do with technology, and that means there’s some degree of isolation against any pullback in the red hot technology and AI segments — and a pullback is certainly possible.

Fresh Del Monte is a major vertically integrated producer, marketer, and distributor of fresh and fresh-cut fruits and vegetables worldwide. It owns and conserves significant agricultural land — for example, around 9,400 hectares of forested land in Costa Rica tied to its pineapple and banana operations. Looking long-term, I really like companies with land holdings.

It’s also not expensive. Trading at 13.2 times forward earnings — falling to 12.1 times for 2026 — it’s well under the index average. It’s also a decent dividend payer too, with the yield currently sitting around 3.2%. This looks set to rise further in the coming years.

One risk is cost inflation into inputs like fuel and fertiliser. This could put margins under pressure.

However, for now, it looks like an excellent business at undemanding multiples.

The post How much do you need in an ISA to take £46,000 per year as a passive income? appeared first on The Motley Fool UK.

The equity core included Legal & General, yielding about 8%, and National Grid, offering around 5.5%. British American Tobacco added a hefty 9% yield, while Vodafone provided about 7%, albeit with more volatility.

Unilever was included for “stability and dividend reliability”, paying roughly 3.5%. To diversify globally, the Vanguard FTSE All-World High Dividend ETF rounded out the equity exposure with a 4% yield.

On the property and infrastructure side, HICL Infrastructure and The Renewables Infrastructure Group both targeted around 6%. Meanwhile Supermarket Income REIT and Tritax Big Box generated 5%-6% through long leases with inflation-linked rent.

For fixed income, the Vanguard UK Investment Grade Bond ETF, iShares 0–5 Year Corporate Bond (IS15) and iShares UK Gilts ETF delivered 4%–5% yields with “lower volatility”. Finally, the Royal London Short Term Money Market Fund, offering 4%-5% for “liquidity and stability”.

What do I think? Well, there’s a lot to comment on. However, overall I’d suggest it’s quite a lot of investments to hold to essentially receive only 0.4% more than the yield on three and six months Gilts (UK government bonds) I bought last week.

Is there a better alternative?

ChatGPT has tried to demonstrate the importance of diversification through a wide range of investments. That’s great, but it’s worth noting that vehicles like ‘all-world’ ETFs are incredibly diversified anyway.

An investor seeking a hands-off approach might allocate part of their portfolio to broad, all-world investments and government debt, while taking a more conviction-driven approach with the remainder — holding a smaller number of carefully chosen positions.

Personally, I don’t invest for dividends. I invest for growth with the aim of taking a passive income at a later date. However, there are several investments I’m considering or own already that have strong passive income credentials.

One to consider

I’m yet to add Fresh Del Monte (NYSE:FDP) to my portfolio, but it’s high up my watchlist.

Fresh Del Monte is a vertically integrated global agribusiness that grows, ships, and sells fresh and prepared fruit and vegetables under the Del Monte and MANN brands.

Its operations span farming, processing, logistics, and distribution — giving it strong control over quality and supply.

The shares trade at around 12.5 times forward earnings, with analysts forecasting 20.5% earnings growth this year and a further 9% in the following year.

The 3.4% trailing dividend yield is also appealing, particularly as payouts have grown meaningfully in recent years and are set to rise further.

I also like that the company also owns tens of thousands of acres of farmland, an asset base that provides long-term security and inflation protection in an era of dwindling arable land.

However, exposure to weather events and commodity-price swings can affect profitability. Even so, with solid fundamentals and tangible assets, Fresh Del Monte looks well worth considering.

The post I asked ChatGPT to build the perfect passive income portfolio and it said… appeared first on The Motley Fool UK.

So what’s the catch?

Really, there’s no catch. The only thing would-be investors need to understand is that no investment’s risk free. However, those who invest wisely can experience returns many times greater than they would achieve in a savings account.

How to get started?

The easiest way to get going is to open a Stocks and Shares ISA — maximum annual contribution of £20,000 — and start contributing to it. These ISAs are available on all major UK brokerages and some cater to those looking to contribute relatively small figures — eg less than £100 a month.

From there, it’s all about making informed and sensible investment decisions. For me, this means investing using data and not based on gut feelings.

And it’s amazing how these investments can grow over time. Imagine starting with £20,000 and then choosing to contribute another £250 a month. Here, I’m going to suggest an investor’s looking to grow their portfolio by 8% annually.

As we can see, over a 20-year period, the portfolio value would potentially push up from £20,000 to almost £250,000. That’s a considerable increase and one that would allow the investor to eventually take a second income worth around £12,500 a year.

Personally, I think that’s a very solid return, although many investors will be more ambitious. The challenge is matching that ambition with an appreciation of risk.

Where to invest?

Building a portfolio is never easy. Those new to investing may want to start by building diversification through exposure to funds, trusts and ETFs.

But what about stocks? Well, here I prefer a data-based approach. And one of the best ranked stocks using multiple quantitive models is Fresh Del Monte (NYSE:FDP).

The company looks an interesting proposition for investors seeking exposure beyond the crowded technology trade. As enthusiasm for AI begins to cool, capital may rotate back into essential industries with tangible assets — and food production fits that bill.

The company’s a vertically integrated supplier of fresh and prepared produce, operating farms, shipping networks, and distribution centres across multiple continents. It also owns tens of thousands of acres of farmland.

Analysts expect earnings per share to rise from $2.8 in 2025 to $3.1 in 2026, with net profit climbing from $137.8m to $146.6m.

At roughly 12.5 times forward earnings, the valuation’s undemanding, especially when coupled with the 3.4% dividend yield. What’s more, the average price target suggests the stock’s undervalued by 28%.

One risk is that persistent cost inflation — particularly in fuel and fertiliser — could erode margins. Even so, with strong fundamentals and tangible real assets, Fresh Del Monte’s worth considering.

The post Late to investing? Here’s how to try turning £20,000 savings into a second income appeared first on The Motley Fool UK.