£100 a day of passive income is often treated as a financial milestone – it’s not extreme wealth, but enough to change the way you work and retire. This is the type of number that many investors exploit as a benchmark when thinking about financial independence from a Stocks and Shares ISA.

However, the amount needed to achieve this goal is much less fixed than many people assume. This depends not only on the size of the portfolio, but also on the income characteristics of the underlying investments.

Why 100 pounds a day isn’t a set goal

If an investor is targeting £36,500 a year at a 4% yield, an ISA portfolio of £912,500 will be required. But this assumption quickly falls apart when you adjust for income. This is highlighted in the table below:

The discrepancy between these results highlights a key point: the ‘£100 per day target’ is not a single number at all, but a range defined by the income profile of the underlying portfolio.

This makes the real challenge not just achieving the fixed capital amount, but building a portfolio capable of maintaining and increasing profitability over time.

Beyond the current crop

Prudential (LSE: PRU) is a clear example of a stock where focusing solely on current profitability can be misleading.

At first glance, this doesn’t seem like an obvious source of income. The dividend yield is around 2%, which typically puts it outside of many passive income portfolios.

However, behind this headline figure there is a completely different picture.

In 2025, earnings growth translated into a 15% escalate in dividend per share (DPS), with continued powerful capital generation.

I particularly like the board’s commitment to returning excess capital to shareholders. For me, this reflects a belief in the strength and sustainability of the core business.

The company expects to return more than $7 billion to shareholders between 2024 and 2027 through a combination of dividends, share buybacks and proceeds from asset sales. A clear dividend framework is key, and management targets annual DPS growth of over 10% in both 2026 and 2027.

In addition, the insurer plans to buy back shares worth $500 million in 2026 and another $600 million in 2027. These returns are partially supported by the sale of part of the stake in ICICI Prudential Asset Management. The company’s December 2025 debut was one of the largest in the history of the Indian stock exchange, and Prudential remains a significant shareholder.

Conclusion

The main risk is that these ambitious shareholder return plans depend on continued growth across Asia. Weaker economic conditions may reduce demand for savings, insurance and protection products, potentially slowing earnings growth.

Nevertheless, stocks are a good example of a changing earnings story. Instead of relying on a high initial rate of return, investors effectively support a company’s ability to grow profits, dividends and shareholder returns over time.

For anyone targeting a significant passive income stream, this highlights an vital point. The most attractive opportunities are not always the stocks with the highest yields today, but the companies that will be able to deliver significantly higher payouts in the future. That’s why it’s worth considering.

Is it worth investing £5,000 in Prudential Plc now?

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Andrew Mackie owns shares in Prudential.