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Rather than setting up a side hustle to try and generate a second income, some people take the approach of making money from a business that is already well-established – and that they do not have to do any work for. Stuffing a Stocks and Shares ISA full of dividend shares in blue-chip FTSE 100 firms is one way to do that.
It can be quite lucrative too. Here is how a £20k ISA could earn £1,400 in passive income annually.
Setting a passive income target
The £1,400 number is easy to figure out. It is based on an average dividend yield of 7%.
Dividend yield is the amount an investor receives in dividends each year from some shares, expressed as a percentage of what they paid for them.
Seven percent is almost double the current FTSE 100 average yield. But I think it is achievable in today’s market while sticking to carefully-chosen blue-chip shares.
