Want to live off passive income instead of working a job? I wouldn’t mind. After all, it would free a lot of extra time that I could use elsewhere.

To achieve this, I’m trying to build a stock portfolio that contains high-quality dividend stocks.

According to the ONS, the current median salary in the UK for full-time employees is £39,039. Therefore, it makes sense to create a strategy that targets earning this income annually.

Let’s see how it’s possible for an investor to replace their job with a passive income machine.  

The passive income target

Now, let’s assume an investor was targeting a dividend yield of 5% in a diversified portfolio. If aiming to replace the median UK salary, that portfolio would need to be valued at £780,780.

However, I’m not sure many of you reading this have that much spare change to hand.

But I’m here to tell you some good news… you don’t need that much to start. An investor could instead aim to achieve this over time.

With a much more modest amount of £20,000 to start with (which is still a large sum of spare cash) and a small contribution of £125 a month, an investor could make £780,780 within 32 years.

This is assuming that both dividends and shares in the portfolio rise by 5% a year, and that the dividends are reinvested.

I appreciate that some of the additional income generated from the portfolio will be eroded away by inflation over that time. Investors should also note that dividends aren’t guaranteed.

But by investing in a stocks and shares ISA, the dividends earned in the portfolio would be tax-free income. Whereas, of course, you have to pay tax on your employment income.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Let’s now look at a UK share that could help an investor target this.

A juicy dividend yield!

ITV (LSE:ITV) shares currently sport a lovely dividend yield of 6.2%. This would be ideal for investors to consider buying for their portfolio, as it’s above the 5% target used in my example above.

The broadcaster faces some serious issues. Most notable is the competition it faces from streaming platforms. The way people are consuming TV is changing. More and more are watching platforms such as Netflix, instead of traditional broadcasters.

Because of this pessimism, the firm’s shares have struggled, pushing their valuation into bargain territory. Right now, it sports a forward price-to-earnings (P/E) ratio of 9.

However, while I acknowledge this risk, I think it’s a bit overblown. The company remains a staple in many households.

Furthermore, its own streaming platform, ITVX, has been quietly impressing in the streaming world. In 2025, total streaming hours increased 16% to 2.3bn. Monthly active users also increased 12% to 16.5m.

While ITV does face serious issues, this provides reasons to be optimistic for the company’s future.

Combined with a high dividend yield and cheap valuation, I think investors should consider buying ITV shares today.

The post How to invest £125 a month in UK shares to target a £39,039 annual passive income appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended ITV and Netflix. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Trainline (LSE:TRN) has been one of my favourite companies in the FTSE 250 for quite some time now.

As Europe’s most downloaded rail app, with 27m customers, I’ve always maintained my belief that the company stands to gain the most from digitisation of train tickets in Europe.

We can see this materialise every time the company posts its annual revenue:

However, over the last five years, the FTSE 250 stock has seen its share price fall by 47.5%.

In fact, even after reporting a solid set of results for FY26 earlier today (6 May), the company’s shares fell by 3.7%.

This has made the shares look pretty cheap. So, is this a buying opportunity for investors to consider?

FY26 results

Looking at Trainline’s full-year results for the 12 months to February 2026, there was a lot to like:

• Net ticket sales were up by 7% year on year to £6.3bn.
• Revenue was up 2% to £453m.
• Adjusted EBITDA was up 11% to £177m.
• Operating profit increased by 43% to £122m.

There’s no doubt that 2% revenue growth represents a slowdown. And it’s not so great to see that the firm isn’t benefiting fully from the 7% growth in net ticket sales.

However, what I do really like about these results is that they show that the firm is becoming more efficient. That’s because adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) grew by 11% and operating profit an even more impressive 43%. Therefore, the firm’s operating margin is definitely expanding.

But there are some other details in the annual results that make me understand why shares fell.

Guidance is weak

While Trainline’s growth and expanding margins are certainly causes for optimism, the FTSE 250 company’s guidance is probably not.

The firm is expecting similar net ticket sales of £6.2bn to £6.45bn for FY27. Furthermore, it expects revenue to be £440m to £455m. At the midpoint of £447.5m in revenue, this actually represents a decline in turnover.

This may be concerning for investors, especially as it indicates that competition may be taking market share away from the company.

For example, Uber launched its national rail and coach booking services onto its platform in late 2023. As Uber caters to consumers by providing many travel options and not just rail, it might be more appealing to customers.

But shares are still attractively valued

Even though competition might be a concern for Trainline, there’s no denying its shares are still valued nicely.

The company’s forward price-to-earnings ratio of 10.1 is on the cheaper end.

With this in mind, there are still plenty of promising aspects of the business. For example, revenue from international consumers continues growing strongly, rising by 12% in FY26.

While this isn’t as significant as the UK consumer is to the business right now, it may offset some of the falling revenue resulting from UK sales over time.

Therefore, while it’s valued cheaply, I think investors should consider adding some Trainline shares to their portfolio.

The post This FTSE 250 stock fell by over 3% after solid earnings. Should investors consider buying it? appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Muhammad Cheema has positions in Uber Technologies. The Motley Fool UK has recommended Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Back in 2015, for £50 you could have bought a family platter at Nando’s, approximately 18 coffees, or 153 shares of Nvidia (NASDAQ:NVDA) stock.

Now, unless you really, really value coffee or a nice meal, you would have probably been significantly better off buying shares in the US tech giant.

Let me show you how.

Calculating the return

I’ve adjusted for stock splits, so bearing this in mind, Nvidia stock has increased from $0.50 at the start of 2015 to $197.92 now, a whopping 39,481% rise.

Taking into account the USD to GBP exchange rate on 2 January 2015 of 0.6499, as mentioned above, an investor could have bought 153 Nvidia shares.

Now, each of those shares is worth almost $200 today and in total, they should be worth $30,281.76! Using the most recent exchange rate of 0.734, that position would be worth £22,226.81.

Essentially, spending £50 on the company’s stock would have made investors over £22k in just over 11 years.

Some of this return would have been because the dollar strengthened against the pound. But the vast majority of it is because of compounding. This shows how powerful picking high-quality stocks can be for investors.

Even a meagre £50 can make a whole load of difference. Every additional pound an investor put in would have made approximately £444 extra.

Can Nvidia do it again?

While I don’t think the US tech giant will be able to deliver the same level of returns as before, I still believe it’s capable of generating excellent returns for investors.

There are risks for the firm, especially as competition in the AI space heats up. Some of its customers (who are also its rivals) are trying to build their own AI chips, which are much more cost-effective. For example, Alphabet’s tensor processing units.

However, there are also many catalysts that can propel the firm’s share price.

This is because it has huge momentum behind it. Nvidia has increased its revenue from $27bn in FY23 to $216bn in FY26.

Furthermore, analysts are estimating that its revenue can rise by a further 71.7% in FY27, to hit $371bn. They then anticipate the company to grow by a further 30.6% in FY28 to reach $484bn in revenue.

This is monstrous growth, which is particularly impressive given how large the company is already.

The valuation is attractive too

For some, a price-to-earnings (P/E) ratio of 40.5 is too high. But for a company that’s growing as fast as Nvidia, I think it’s justified.

In fact, when you consider that the forward P/E is only 24.5, I think its valuation can even be considered cheap.

The market for AI is expected to grow at a compound annual growth rate of 30.6% from 2026 to 2033. Given that Nvidia’s graphics processing units are expected to power this, I expect the company to grow at a similar rate.

Therefore, I think even after its monumental rise, investors could consider buying some of its shares for potentially strong future returns.

The post £50 put into Nvidia stock at the start of 2015 is now worth… appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended Alphabet and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Things should be looking up for Palantir (NASDAQ:PLTR) stock. After all, yesterday (4 May), the company released its first-quarter earnings for 2026, which did not disappoint. In fact, they showed an acceleration of the business’s fortunes.

The share price has since fallen by 5.8%, though. So, let’s take a deeper look into the company’s earnings and see whether there is a potential opportunity for investors.

So much to be optimistic about

Reading Palantir’s quarterly earnings report, there are a lot of reasons to be optimistic about the firm’s future:

• Overall revenue grew 85% year on year; the company’s highest ever growth rate.
• US commercial revenue grew by 133%.
• US government revenue grew by 84%.
• Net income increased from $218m to $876m.

What’s so great about these results is that they represent the eleventh consecutive quarter of accelerating growth. In the final quarter of 2025, revenue growth was 70%. In the first quarter of 2025, growth was 39%. This, therefore, marks a clear acceleration.

Moreover, the firm’s guidance provides further excitement. It’s expecting revenue of $7.650-$7.662bn for the full year. This represents a growth rate of 71% from 2025. It’s also an uplift from the 61% guidance for growth that was issued in February.

Considering that revenue was only $2.2bn for 2023, Palantir stock has been one of the best growth stories of recent times.

But not all is about growth, as valuation should also be considered.

Valuation issues persist

One of investors’ biggest qualms with Palantir stock has been its stupidly high valuation.

Right now, the company’s shares sport a price-to-sales ratio of 71.9… very pricey!

And the price-to-earnings (P/E) ratio of its shares is 164.1. This would put many investors off.

However, the P/E has been falling, making the firm’s shares look relatively cheap compared to what they previously were. It had a P/E of 607.2 at the end of September 2025.

Its forward P/E is also only 113.6. Considering that its shares have only fallen by 33.7% since they peaked in early November 2025, most of this fall can be attributed to the company growing into its valuation.

We can already see that the firm is growing at a tremendously quick pace. So, while the valuation might be a bit too much for many investors, I can see this falling very soon, as the firm’s growth accelerates.

One of AI’s best prospects

There are definitely risks for Palantir. For example, there is intense competition in the AI space, particularly with the rise of agentic AI platforms, such as Anthropic’s Claude, which could seriously challenge the company’s business model.

However, on the whole, I still believe Palantir stock is one of the most promising opportunities for investors to consider in the AI space.

Its artificial intelligence platform (AIP) has been a big winner among commercial clients. This is evident from its US commercial customers growing 42% year on year this quarter.

I believe that Palantir stock has ultimately fallen because of valuation concerns, despite its stellar quarterly results.

For patient and long-term focused investors, I don’t think valuation should be a sticking point, as the company could very quickly grow into this.

Therefore, I think today’s share price fall definitely represents an opportunity for investors to consider buying its shares.

The post Should investors consider buying Palantir stock after its stellar earnings? appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The FTSE 100 has historically been a frustrating investment for many. For example, if you exclude dividends, in the noughties, the index saw no growth at all, and actually fell.

However, the tide has started to change in the last few years. In fact, some of this poor performance has created many cheap shares and high dividend yields.

If we’re looking at nominal increases only (ignoring dividends), the last decade has seen the Footsie climb by 66.3%. That’s not bad… but it’s not overly impressive either.

But if we also account for dividends, investors’ returns in the index have proven much more lucrative. The Footsie returned an average annual return of 9.2%, equating to a total return of 140.2% in that period. That’s much more like it!

Given that dividends have been significantly important to its returns, let’s look at some of the highest-yielding stocks in the index.

Plenty of options

On the whole, the FTSE 100 has a pretty decent dividend yield of 3%. The S&P 500, the main stock market index in the US, has a comparatively lower yield of 1.1%.

This is because there are plenty of companies in the FTSE 100 that offer yields that would make income investors’ mouths water:

It should be noted that dividends aren’t guaranteed, but the above represents the top five yielding stocks in the UK’s top stock market index right now.

Legal & General shares offer a particularly attractive passive income opportunity for investors to consider.

For example, if investors wanted to make an extra £200 a month, buying 10,968 shares in the company could help to target this second income. This would cost £28,072.60 at the firm’s current share price of 255.95p.

But not every great stock pays a high dividend. I believe there’s one that presents a great opportunity for investors to consider.

Great potential

I believe Rolls-Royce (LSE:RR.) is one of the top UK shares right now.

There are risks for the company. Most notable is the war in Iran and how it could potentially cause a jet fuel shortage. This could be a real problem for the firm in the short term, as it could result in fewer flights taking place, and in turn lower demand for the company’s aircraft engines and maintenance.

However, the longer-term thesis remains intact, with many promising areas of the business showing great potential.

One example is its Defence division. The sad reality of the times we live in is that global wars are becoming more prominent. Rolls-Royce stands to benefit from this. In its latest trading update, it showed that original equipment defence deliveries increased by 20% year on year.

Furthermore, the firm’s power systems division looks set to help power the rise of AI. It currently has a backlog of £7.3bn, and as more money on AI data centres is spent, the aircraft engine manufacturer should thrive.

Therefore, I think investors should consider buying Rolls-Royce shares.

The post £10,000 put into the FTSE 100 a decade ago is now worth… appeared first on The Twelfth Magpie.

More reading

• How much passive income could 333 Rolls-Royce shares pay out in 3 years?
• Investors need to face the truth about booming Rolls-Royce shares 

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended Barratt Redrow, Land Securities Group Plc, M&g Plc, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

On 20 March, Barclays (LSE:BARC) shares hit their low for 2026 so far. The company’s shares had fallen by a disappointing 22% at this point.

Most of this occurred when the war in Iran started. However, the firm’s shares have enjoyed a decent rebound since.

In fact, its shares are up 14.9% since then. This hasn’t offset the decline in its shares since the start of the year, but it’s still nice for some of the company’s shareholders to recoup some of their losses.

However, if an investor miraculously timed the market perfectly and bought £10,000 worth of shares on 20 March, they would have a delightful profit of £1,486.

But it’s no longer 20 March, and many of you reading this will be wondering whether Barclays shares are still worth considering today.

Diversified or risky?

On the one hand, the great thing about Barclays’ business is how diversified it is. Unlike most other major UK banks, it has a very strong investment banking division. This accounted for almost half of its first-quarter income, with £4bn of turnover compared to the overall turnover of £8.2bn.

Moreover, this division also saw a good 4% rise from the same period in the prior year. Because of its diversified segments, the company is less impacted by interest rate changes than some other banks. So, if interest rates are falling, Barclays can rely more on its investment banking division.

On the other hand, though, diversification may be the bank’s weak point in current circumstances.

Investment banking is a cyclical business and is heavily influenced by global macroeconomic conditions. Speaking of these, they aren’t looking great right now with rising oil prices resulting from the war in Iran.

And while the Bank of England chose to hold interest rates last week (30 April), they warned that rate rises were likely to combat the inflation arising from higher oil prices.

Therefore, not being as exposed to interest rates may not be a favourable position right now. Other banks could benefit more from rising rates, as their net interest margins increase.

However, maybe Barclays shares are valued more nicely than its competitors?

Valuation

You’d think that after rising by 179.2% since the start of 2024, the firm’s shares would be a bit expensive.

You’d be wrong, though… its shares currently trade at a pretty cheap forward price-to-earnings (P/E) ratio of 8.4!

Let’s compare that to the forward P/E of some other UK banks for a second:

• HSBC: 10.9
• Lloyds: 10.1
• NatWest: 8.2
• Standard Chartered: 11.5

Looking at this, they’re all a bit more expensive than Barclays, except NatWest, which is only marginally cheaper.

Therefore, some of the risks mentioned above could already be priced in.

I also want investors to note that while the present economic environment may not be conducive for Barclays shares to thrive, over the long term, diversification could be its strength compared to other banking stocks.

As a result, today might be an attractive entry point for investors to consider buying the company’s shares.

The post £10,000 invested in Barclays shares on 20 March is now worth… appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

HSBC Holdings is an advertising partner of Motley Fool Money. Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, Lloyds Banking Group Plc, and Standard Chartered Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Rolls-Royce (LSE:RR.) shares have been on a phenomenal run in recent years, returning 1,030% to investors over the last five years.

However, 2026 hasn’t been the aircraft engine manufacturer’s year so far. In fact, the last few weeks haven’t been so great for the company.

Since 17 April, its shares have fallen by 9.8%. If an investor had put £5,000 into its shares on this date, they would have already lost £490. Therefore, their investment would have sunk to £4,510.

But I still think Rolls-Royce is a great company. So, could this pullback in its share price be an opportunity to consider buying some of its shares?

Confidence in guidance

Rolls-Royce released its trading update yesterday (30 April) covering the quarter to 31 March. Even during the war in Iran, CEO Tufan Erginbilgic, commented that their guidance of £4-£4.2bn in underlying operating profit and £3.6bn-£3.8bn in free cash flow for 2026 remains unchanged.

This may reassure some investors, given current global events. Other causes for optimism included:

• Large engine flying hours (EFH) grew 5% to 115% of 2019 levels in the three months to March.
• EFH for 2026 is expected to be at 115%-120% of 2019 levels.
• Large engine original equipment (OE) deliveries increased by 18% in the first quarter.
• Defence OE deliveries increased 20% year on year.
• Power systems orders had their record month in March, with an order backlog of £7.3bn.

Even after the CEO’s statements, investors shouldn’t ignore the fact that the war in Iran creates big risks for the firm. Rising jet fuel prices are a big concern, as they could hinder demand for flying, but even supply if there is a shortage.

Some airlines insist that the chance of such jet fuel shortages is decreasing. However, it shouldn’t be ignored that if this were to happen, it would hit Rolls-Royce’s biggest and most profitable civil aviation division.

That said, I still believe the catalysts for the firm should set it up for long-term success.

Power systems and nuclear energy

If you’ve read my previous articles about Rolls-Royce, you may have noticed that I’m particularly a fan of its investments in small modular reactors (SMRs).

After all, this could revolutionise the way nuclear energy is conducted, and could be a game-changer for the firm in the long run.

It’s already executing on agreements to build three SMRs in Wales and six in the Czech Republic.

However, I’m starting to become a big fan of another of its operations, its Power Systems division.

As mentioned above, its backlog for orders is already at £7.3bn. And I only see demand for this growing further.

That’s because with the rise of AI, $3trn is expected to be spent on data centres through to 2028. These will need to be powered somehow, with Rolls-Royce hoping its power systems and nuclear reactors can help out.

This could be very lucrative for the company in the long term. I therefore think the recent pullback in its share price presents investors with an opportunity to consider buying some of its shares.

The post £5,000 invested in Rolls-Royce shares on 17 April is now worth… appeared first on The Twelfth Magpie.

More reading

• How much passive income could 333 Rolls-Royce shares pay out in 3 years?
• Investors need to face the truth about booming Rolls-Royce shares 

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

‘Should I invest in a Cash ISA or a Stocks and Shares ISA?’ many of you may be asking.

As someone who is 27 years old, I understand the feelings of others in their twenties thinking about what to do with their money.

With interest rates relatively high in recent years, a Cash ISA may seem appealing right now. Let’s see if it’s actually a good option to consider, or if investors are actually better off turning to a Stocks and Shares ISA.

Cash versus stocks

Currently, with a top-tier Cash ISA, you can earn about 4.5% annually. I understand the appeal to this, especially as the interest is guaranteed.

However, investors must consider that we’re in a relatively high interest rate environment. And even if we were to assume that the interest rate remains the same over the next five years, the total return a Cash ISA will make is 24.6%.

Meanwhile, many UK stocks have trumped this over the last five years:

• Rolls-Royce: +972.5%
• AstraZeneca: +79.7%
• BAE Systems: +305.1%
• Barclays: +135.9%
• BP: +89.1%

This is even before considering dividends.

If we compare it to the FTSE 100, we can see that the index could significantly outperform a Cash ISA over time.

Crunching the numbers

Let’s consider a period of 40 years, as it’s around the time an investor in their twenties today will retire.

We’ll also assume the average return of a Cash ISA remains at 4.5% annually over that period, and that the Footsie grows by a compounded annual growth rate of 6.4% with dividends reinvested (as it has over the last 20 years).

If an investor therefore put £1,000 in each today, this is what their returns could look like:

Initially, the difference isn’t so great, at just a measly £19.

However, over the course of the 40 years, a significant difference emerges. In fact, an investor may earn 105.6% more by investing in the FTSE 100 over that time.

There’s no guarantee stocks will continue outperforming, and they are riskier. But the potential returns are much higher. With this in mind, I’ll look at one share I think investors should consider buying to add to their portfolio.

My top UK stock

Shares of mining giant Rio Tinto (LSE:RIO) have enjoyed a very impressive 2026, rising by 16.5% so far.

What’s driven this is a rise in copper prices, which is one of its core products. Looking at its results in 2025, the underlying EBITDA (earnings before interest, tax, depreciation, and amortisation) the company generated from copper increased by 114% to $7.4bn.

This is of no surprise to me. Copper is one of the key metals needed for the massive investment in AI infrastructure over the next few years.

The company is in a strong competitive position for this metal, with its Oyu Tolgoi mine in Mongolia hosting one of the world’s largest known copper deposits.

There are risks for Rio Tinto. Notably, commodity prices can be volatile and hurt the company’s earnings. But in the long term, it could be an under-the-radar beneficiary in the AI revolution.

Because of this, I believe it could outperform the market in the next few years, and investors should consider buying its shares.

The post At 27 years old, will a cash ISA or Stocks and Shares ISA help build wealth faster? appeared first on The Twelfth Magpie.

More reading

• £503 buys 14 shares in this FTSE 250 stock that returned 23.9% annually for the last 15 years
• £1,000 buys 25 shares in this FTSE 100 stock that’s returned 29.2% annually for the last 10 years
• Down 47%, is this growth stock finally worth buying in May?
• 2 REITs yielding 7%+ to consider for passive income in 2026
• Just 97 shares of this UK dividend stock generate £238 in passive income

Muhammad Cheema has positions in Rio Tinto Group. The Motley Fool UK has recommended AstraZeneca Plc, BAE Systems, Barclays Plc, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Want an extra £99 of passive income a week? I certainly do. So, that’s why I’m trying to build a dividend portfolio that can help me do just that.

This could help investors with increasingly higher expenses, or even to support a nice treat for themselves every week.

Let’s see how it’s possible to aim for this and potentially get this extra stream of cash.

Is it even realistic?

So, some of you may be reading this and thinking to yourselves that you’ll need a significant upfront investment to make this work. If we take a look at the numbers, we’ll see how much this is exactly.

An additional £99 a week is equivalent to £5,148 a year. Assuming that we target a dividend yield of 5% in our ISA, this would cost £102,960 to achieve.

Now, this is a pretty considerable sum. Most of us probably don’t have this much extra to just put down.

However, all is not lost. While it may be difficult to do this immediately, it’s certainly possible over seven years.

If investors put down a much more modest £15,000 initially and reinvest their dividends, along with an extra £150 a week, in just seven years, they would have the sum needed.

And by investing in an ISA, the £99 of weekly dividends will be tax-free.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

It should be noted that this assumes that dividends grow by 2% a year, and shares by 5%.

Plenty of choices

I’ve talked plenty about the maths above, so let’s take a deeper dive into some stocks that could make this portfolio work for investors.

Looking at just the FTSE 100, there are plenty of shares investors could consider.

For example, life insurance firm Aviva has a dividend yield of 6.3%, and tobacco giant British American Tobacco sports a yield of 5.8%. These are both above the target yield of 5%, which I discussed above. This could help bring down the amount needed to invest for the weekly £99.

Furthermore, Legal & General (LSE:LGEN) boasts an impressive yield of 8.7%, which easily beats the target.

If investors exclusively invested in the shares of this company, they would only need £59,378 to get the weekly £99. Comparatively, it would take only just over four years to potentially build the desired passive income portfolio.

However, investors should understand that dividends aren’t guaranteed, and building a diversified portfolio may be better suited to hedge this risk.

Even then, there’s still plenty to like about the company aside from the dividend.

Looking at the demographics of the UK, the ageing population means that there will be a higher need for retirement services.

Given that retirement services are the firm’s most profitable segment, by far, this could help it grow further. This income stream is already growing well, with operating profit growth of 6.5% in 2025. It could yet grow further and fuel the company’s earnings.

As a financial services firm, there are risks arising from uncertainty surrounding the wider economy. The conflict in Iran could see this having a negative effect on the company’s earnings. The more prolonged it is, the more it may hurt.

However, I still believe Legal & General has strong long-term prospects. Therefore, I think investors should consider buying its shares.

The post How much is needed in an ISA to target a £99 weekly passive income? appeared first on The Twelfth Magpie.

More reading

• 3 top income-focused stocks to buy in May 2026, according to experts
• How to invest £150 a month in shares to target a £7,660 passive income for life
• The Legal & General share price is at a 10-year low – but the dividend income is stunning!
• How much do investors need in a SIPP to cover the UK’s £1,377 average rent?

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended British American Tobacco P.l.c. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

If an investor put £10,000 into Rolls-Royce (LSE:RR.) shares on 30 September 2022, at just 69.59p apiece, they would have £174,091 today.

The company’s shares exploded by a phenomenal 1,640.9% in that period. That’s an incredibly impressive run-up, which would have changed the lives of many investors.

However, while it certainly was then a once-in-a-decade opportunity, is it still so?

Let’s be realistic

The market capitalization of the aircraft engine manufacturer when its shares started this great run was around £5.8bn. The market cap now is £99.5bn.

Even if it didn’t match its previous performance, and its shares just went up 10 times, the firm would almost be a trillion-pound company.

Its price-to-earnings (P/E) ratio of 36.8 on 2026’s projected earnings is already very expensive. But even if it were to match that high P/E as a trillion-pound company, it would still need to make £27.2bn in profit.

With trailing 12-month revenue of only £19.5bn in comparison, that’s a very big ask for the firm right now. And with its 29.6% profit margin over the same period, it would need to generate £91.7bn in revenue to make this profit. This is almost five times the current amount.

A compounded annual growth rate of 16.7% is required to achieve this over the next decade. With revenue up by 7% in its latest half-year results, it’s nowhere close to making this happen.

And its profit margin has been boosted recently by significant financing income, meaning the growth rate needed from operations may be much higher.

At the same time, it needs to maintain the same expensive valuation.

I believe it’s highly unrealistic for the company to do all of this.

That’s why I don’t believe the company’s shares are a once-in-a-decade opportunity anymore. However, I still believe Rolls-Royce shares could be a great investment in the long term.

Still plenty to like

There are still plenty of reasons to like the aircraft engine manufacturers’ shares, though.

These include the continued strong performance of its civil aerospace division since the pandemic, and the unfortunate reality that global conflicts seem to be on the rise, which will be beneficial to Rolls-Royce’s defence division.

But the one area on which I want to focus my discussion on is the company’s potential with small modular reactors (SMRs).

SMRs are a technology that could revolutionise the way nuclear energy is deployed. It turns the power source into a commoditised factory-built product. This is much cleaner for the environment than traditional nuclear energy plants.

It should be noted that SMR technology is untested in its effectiveness, so it would be very bad for the company’s share price if it were found to be ineffective.

However, this aside, the opportunity is anticipated to be massive. With 400 SMRs expected to be needed by 2050, costing $3bn each, this could be a trillion-dollar industry.

Rolls-Royce is already making huge strides in this space. It already has agreements with the UK and the Czech Republic to supply them with SMRs.

Ultimately, while no longer a once-in-a-decade opportunity, if the company continues executing well in this industry, its shares could be a big winner for investors over the long term. Therefore, they should consider buying them.

The post Are Rolls-Royce shares still a once-in-a-decade opportunity? appeared first on The Twelfth Magpie.

More reading

• How much passive income could 333 Rolls-Royce shares pay out in 3 years?
• Investors need to face the truth about booming Rolls-Royce shares 

Muhammad Cheema has no position in any of the shares mentioned. The Motley Fool UK has recommended Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.