According to the Retirement and Lifetime Savings Association, someone who earns 43 100 pounds a year can enjoy a comfortable pension. So earning this in passive income looks a good goal of investment for me.

Dividend shares are a good source of cash for investors. But while investing for enough to generate 3591 GBP per month, it is not straightforward, there are some things that investors can do to facilitate the process.

the Book of Numbers

At the moment, stocks with the highest dividend performance in FTSE 100 comes from Phoenix Group Holdings. Every year, the company returns 10.25% of market capitalization to investors.

At this level, someone would have to invest 420 487 pounds to generate 43 100 pounds a year. But focusing on one action is risky – especially when it is an insurance company for life, in which unforeseen obligations can accumulate.

FTSE 100 as a whole has an average dividend performance of 3.48%. I think that these are much more reasonable expectations, but this means that the amount needed to earn 2 608 pounds per month in dividends is 1.24 million GBP.

This is a lot – someone putting off 1000 pounds a month would take 103 years to reach this level. But the gigantic advantage of investing is that these things are more achievable than it seems.

How to go forward

For someone who invests 1000 pounds a month, there are two main ways to shorten the time needed to build a portfolio that can return £ 43 100 a year. The first is to earn and reinvest dividends.

Performing this with an average return of 3.5% annually reduces the required time to about 45 years. This is a great improvement, but I think that investors can reasonably strive to do even better.

The best companies not only return cash to shareholders – they grow over time. This can lend a hand investors who are to significantly transform 1000 pounds per month into 1.24 million GBP.

The combination of growth and dividends FTSE 100 has managed an average annual refund of 6.89% in the last 20 years. This is enough to shorten the time frame to about 30 years.

Stocks to be considered

One of the stocks that I think is able to do both, is Admiral (LSE: ADM). This is another insurance company, but I think it is an extremely good business that is not subject to the same risk as the Phoenix group.

The company is mainly exposed to car insurance, where policies can be valued after a year, and not run for decades. This helps limit the threat of long -term unforeseen obligations.

Inflation is a constant risk of considering – as the prices escalate, the car repair and replacement cost more. But Admiral has a great competitive advantage that helps maintain robust insurance margins.

This is due to the data that the company gathers its clients using telematics initiatives. This allows the company to value the rules more accurately, generating better profits and returns.

Growth and dividends

Admiral shares currently have a dividend profit of about 4.5% – above the average FTSE 100. And I think his unique strengths will lend a hand him grow and distribute more cash for investors with time.

This is a kind of combination that can make earning 43 100 pounds a year in passive income is much more realistic than initially. So investors who hope that they will achieve this should look seriously at shares.