One way to earn passive income is to park one’s money for years in shares of well-known businesses that look set to pay dividends in future.
An example of such a share is FSTE 100 financial services giant Legal & General (LSE: LGEN).
It recently set out plans to keep growing its dividend per share as it has been doing in recent years. It plans a 5% increase this year, followed by 2% annually for several years after that.
The plan was received coolly in the City, with the shares being marked down on the day it was announced. Indeed, in five years the Legal & General share price has done worse than nothing. It has actually fallen 13%.
On top of that, the plan is just a plan. No dividend is ever guaranteed, no matter what a company intends.
For example, if a financial crisis leads clients to pull funds from its retirement products, Legal & General may see profits tumble and have to slash its dividend. It did…
