When it comes to earning passive income on the stock exchange, I think there is one thing that gives some investors a great advantage over others. It has time on his side.

The ability to be patient can dramatically augment returns. And shares FTSE 250 Bakery and food seller Greggs (LSE: GRG) is a good illustration of this.

Dividend augment

Over the past 12 months, Greggs has separated 59 pence in dividends per action. To earn 12,000 pounds a year – or 1000 GBP per month – before dividend taxes, the investor would need 20,339 shares.

At today’s prices, it costs 424 271 £ (rejecting the tax obligation). It’s a lot – and I suspect that few of us now have such an amount.

Greggs, however, increased (regular) dividend by 161% over the past decade. And if it does it again, 7,643 shares are enough to generate £ 1,000 a month by 2035.

The current price of shares means that it costs $ 159 127. This is still a lot, but much less than 424 271 pounds costs to earn such a amount of passive income immediately.

Perspectives

The most vital question is whether Greggs will continue to develop their distributions at the same pace over the next 10 years. Dividends are never guaranteed, but I think it is particularly uncertain.

Over the past 10 years, the company has increased the number of stores by just over 54%. If it does this again, there will be about 4031 sales points.

The problem is that even Greggs do not predict this level of expansion. The production base is currently set for about 3,500 stores, which is slightly lower.

If the company stops developing, it may be with more free cash. But although this can augment the dividend in a low period, I do not consider it to be conducive to long -term growth.

Other possibilities

I think that British investors looking for passive income should consider the possibilities of greggs. Croda InternationalS (LSE: CRDA), which looks attractive to me.

The company produces chemicals that assist pesticides stick to plants, cause the smoothness of moisturizing creams and assist drugs reach the place where they are needed. And his products are very well protected.

The risk is that the size of the sales can be very unstable. For example, in agriculture, the price of wheat can have a great impact on demand, and Croda does not have control over it.

Despite this, the company has very powerful achievements in consistently increasing the dividend. And I think she has a competitive position, which will allow her to continue doing it in the long term.

Long -term investing

Not all investors are able to apply a long -term approach to passive income. But I think those who have a gigantic advantage.

Thanks to the relevant companies, all shareholders must wait as the returns augment. And this may mean that they finally get many more dividends with less invested at the beginning.