I’d buy 50,000 Lloyds shares for £100 in monthly passive income

I think the best way to save and invest for my retirement is with UK shares. And I bought them in my Stocks and Shares ISA. We have a new ISA year just starting too. So I looked Lloyds Banking Group (LSE: LLOY) today.

The Lloyds share price in the chart is above. And it’s still down more than 25% over the past five years.

Question

There is one main question. Does Lloyds show you a great way to build a long-term passive income stream? Well, dividends go up and down too, and were cut when Covid was here.

But in the long run, I think Lloyds is very likely to bring in cash to pay dividends. I will grow too. For now, though, I’ll work with a 5% return forecast.

I must stress that this is just a “what if?” chapter. I just want to show you the kind of passive income you can make from UK Shares. So I’m not trying to predict what will happen to Lloyds shares.

How much?

Answer: The next thing to ask is how much money I need to get £100 per month. That’s £1,200 per year. So with a 5% dividend, I should have made £24,000. And at the current share price, that’s about 50,000 shares.

I don’t currently own much Lloyds stock. So how do you make a pot that size?

Do I have to save every month in my ISA. Then, when I have enough for investment, buy some stocks. And I just had to do that for a long time.

How long?

I think it will take me about 14 years to reach my goal. It will depend on how often I can buy, and what the Lloyds share price is doing. Oh, and where are the dividends over the years.

But in the current figure, it’s about how long it should take.

So I’m investing £100 a month from now on, then sit back and take £100 in passive income for life. That sounds good to me, if I can.

I can get there much faster though. If I could invest £200 a month, I could build a pot of Lloyds shares in just eight years.

Or I can keep going up at £200 per month for 14 years. Then take £200 a month, every month, after that.

risk

As I said, this is just an example of what can be done. And there’s no way I’m going to put all my lifetime money into one stock.

And Lloyds faces the same risks as bank stocks when we are in tough times, as we are now.

I aim to build a diversified ISA, with a good spread of dividend stocks selected from all sectors. That should help me if we have a certain sector fall. And it should also help my income, as some dividends go up while some fall.

But yes, I would keep Lloyds shares as one of my long-term ISA shares.