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With just £3 a day, investing in FTSE shares can help you build some meaningful passive income in the long run. Apart from providing some much-needed financial flexibility to tackle the future cost of living, it could also help reduce dependency on the State Pension.
So letâs break down exactly how much money a portfolio could generate.
Crunching the numbers
Saving £3 a day for investments works out to an average of £91.25 a month. And in 2026, thatâs more than enough to kick-start an investing journey.
On average, FTSE shares typically generate close to 8% a year over the long term. So assuming an investor matches this level of return moving forward, how much could drip feeding £91.25 a month eventually be worth?
Well, for those able to keep up this disciplined investing approach for 30 years, the answer’s £135,995.30. And following the 4% withdrawal rule, that translates into a sustainable passive income of £5,439.81.
| Time Horizon | Portfolio Value | Passive Income |
| 5 Years | £6,704.76 | £268.19 |
| 10 Years | £16,693.83 | £667.75 |
| 20 Years | £53,748.11 | £2,149.92 |
| 30 Years | £135,995.30 | £5,439.81 |
Obviously, earning an extra £5.5k isnât going to open the door to a life of endless luxury. But itâs undeniably going to help cover the bare essentials during retirement, as is having a six-figure portfolio for the lowly price of just £3 a day.
So the question now becomes, which FTSE shares are the ones to consider buying in 2026?
A top FTSE pick from the pros
There are plenty of quality compounders across the FTSE universe. But one business that institutional investors have begun eying in April is RELX (LSE:REL).
For years, this data analytics technology business traded at a premium valuation, generating an average return of 12.5% a year in the decade leading up to 2026. But earlier this year, the shares were sold off on fears of potential artificial intelligence (AI) disruption.
It isn’t hard to understand why investors were spooked. After all, accessing RELXâs tools is very expensive, especially compared to some cheap-and-cheerful AI models that are now floating around. But since then, nerves have started to, well, relax. And the FTSE stock has already bounced back over 20% since its February lows.
Experts believe RELXâs proprietary data remains mission-critical for countless businesses, creating a moat that might be much harder to displace. And with the company having already spent several years building its own suite of AI tools, the âdisruptiveâ technology is currently helping the business, not harming it.
Where’s the risk?
Even if cheaper AI tools canât match RELXâs quality, for everyday basic tasks, these models may prove more than sufficient. And that could translate into fewer RELX subscriptions, undercutting pricing power, and reducing annual recurring revenue generation.
Itâs also worth highlighting that while RELX shares are now still much cheaper, relative to earnings, the stock still carries a bit of a premium. And that does open the door to higher volatility that might test the risk tolerances of more conservative investors.
Yet overall, I believe the FTSE stock has been hit by a panic-driven overreaction this year rather than being truly disrupted. That might change over time. But for now, the moat appears to be intact with the company’s nicely positioned to potentially outperform expectations.
So for investors looking for a quality compounder to help build long-term wealth and passive income, RELX shares could be worth mulling.
The post How to invest £3 a day in FTSE shares to target a passive income of £5,439 a year appeared first on The Motley Fool UK.
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Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended RELX. 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.
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