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Having been an investor for almost 40 years, I have changed my style a lot over the decades. In the early years, I enjoyed taking high-risk punts on small company stocks. Later, I followed my hero Warren Buffett’s advice to buy great companies at fair prices. These days, I aim to increase the income generated by my family portfolio.
£86bn in passive income
In particular, I long for the powerful cash flows that come from being an owner FTSE 100 shares. According to one report, the price of FTSE 100 shares may come £86bn in 2026, compared to £80.7bn in 2025. That’s a solid 6.6% increase – before inflation (the rising cost of living).
Currently, my family portfolio includes more than 25 different Footsie and FTSE 250 the shares we have of the dividend yield exceed the markets. Therefore, our benefits are highly diversified and we do not rely heavily on a single company, industry, or region for our income.
The dividend dynamo
For example, here is one share in my family’s existing portfolio that I covet for its passive income potential. Plus, I’m thinking about buying more of this retirement star to help with the retirement fund when we finally get around to it.
Lovely Legal & General
While working in the financial world for 15 years, I became a big fan of UK insurance and asset management Legal and General Group (LSE: LGEN). Founded in 1836, L&G has grown to become one of Europe’s largest money managers, with client assets approaching £1.2trn.
IL&G released its latest full-year results on Wednesday, March 11. Investors didn’t like its reduced Solvency II filing ratio of 210%, with shares down 6.6% to 241.38p as I write. This values the British giant at £13.8bn, well below the recent peak seen in mid-February.
This share price slide boosted L&G’s Trailer Consulting’s yield by 8.9% annually. This is almost three times the FTSE 100’s cash yield of 3.1% per annum. In addition, the group will spend £1.2bn on a major share buyback to increase future returns to shareholders. Looking ahead, the company aims to return more than £5bn to its shareholders from 2025 to 2027. Wow.
If I had the means, I would happily buy L&G outright, take it private, and get very rich. Perhaps the company might attract bidding interest at some point, say, from one of its biggest American rivals? Then again, L&G’s future growth depends on stable and rising commodity prices – something that is far from guaranteed in these changing times.
And, if stock markets fall again – as they did in 2022 and spring 2020 – L&G’s earnings and cash flow could jump. Nevertheless, I expect the company to continue to increase its large dividends to shareholders. Indeed, it has already committed to increasing this payment by 2% this year and next.
In summary, I intend to hold on to our existing L&G shares – and perhaps buy more for additional income.
Meanwhile, what other top stocks are moving markets and exciting investors right now?
