I’d buy 16,000 Barclays shares for £100 in monthly passive income

One day I want to earn a good passive income from my stocks. And I need dividends.

I want a good dividend yield. And I want a cash flow that can support me every year. And if I can buy when the stock is cheap, that’s good. That way, I can lock in better long-term results.

I saw it today Barclays (LSE: BARC) shares, and how I can snag £100 a month from them.

volatile

Barclays prices fell in 2023, along with other bank stocks, on fresh sector fears. However, I doubt that there will be a new crisis, and I think that it will only be a short scare.

But it shows something important. Bank shares, and dividends, have been up and down over the past 10 years. And that’s not good for fixed income.

However, I just want the cash to stay in retirement. So far, as long as I can get a good average result, that’s all I care about.

Target

So what do I need to do to earn £100 a month? That’s £1,200 per year. And now, Barclays shares are on a dividend yield of nearly 5%.

To take home £1,200 a year at that rate, I would need a pot of £24,000. And at the current price, that would buy 16,000 shares.

I don’t have £24,000 to spare now. So what if I start today and put aside £100 a month to buy Barclays shares?

Yes, if the 5% dividend remains the same every year, I can reach my target in 14 years. It will depend on the time of my dividend, and how long it will take me to build up each investment amount.

advisable?

But in that ball park. And such a target should be achieved by many investors. Oh, and that doesn’t include the share price gains we might enjoy in the next decade and so on.

Now, if I can get to £200 a month, I can get there in just eight years. I know this is a tough time and we are all feeling the pinch right now. High interest rates mean many of us have less money in our pockets these days.

But I think that makes it even more important to set aside what you can to help fund your old age. And, I don’t think £200 a month is too much of a modern lifestyle.

Risk

Now, I must emphasize that this is not a prediction here. No, it’s just a bit of a ‘What if?’ In reality, the dividend yield does not stay the same.

Barclays faces banking sector risks as well. And I wouldn’t put all my cash in one stock. However, I will make a variety of different sectors. I would say that diversification is the best way to reduce the risk of share price losses.

So I wouldn’t put all my money in Barclays. But it’s on my buy list because I’m planning a long-term passive income investment.