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Finding ways to increase your income is always attractive. But the market dips we’ve seen recently are rare. As FTSE 100 stock prices are falling, dividends on many blue-chip stocks are quietly rising.
That creates a strange window. Investors who buy today aren’t just picking up stocks at low prices — they could be locking in sources of high income for decades to come.
So how much of a difference does doing it now make to a portfolio’s future earnings?
How small differences in returns drive income
Small changes in annual profits during the contribution phase can have a large impact on future income. Over time, even a small gap in performance integration becomes a significant factor.
The chart below highlights this clearly. By contributing £10,000 each year for 20 years, two different return scenarios – 7% and 9% – lead to very different results.
At first, the gap may seem small, but over the course of twenty years, the difference adds up dramatically, shaping how much income the portfolio can generate in retirement.
A chart created by the author
After years of compounding, that 2% gap results in a £100,000 difference in the final value of the portfolio. Over 25 years, this would mean it could happen £5,000 more on variable income for inflation from year to year.
While many stocks in the FTSE 100 offer good yields, I have been looking down at the market for opportunities.
Dividends and growth
Aberdeen (LSE: ABDN) may not be in the headlines every day, but its forward momentum grabs my attention. This share of funds decreased by 13%. However, its growth prospects are truly outstanding.
The company enters 2026 with the exit of its Mentor business at less than half of last year’s levels. Meanwhile, mutual funds continue to gain momentum. Its low prices and innovation of the platform are attracting investors. The recent break in profile at Hargreaves Lansdown may give investors more market share – a reminder of how important trust is in this industry.
It changes the distribution of assets
Trends in the property market are also playing out for Aberdeen. Volatility, high inflation, and a global shift away from US technology are creating opportunities for its Investment Division. Emerging markets, alternative assets, and non-core regions – areas where the asset manager has deep expertise – could drive growth in the coming years.
Reflecting these changing trends, Aberdeen’s Gold ETF started with $10m in 2009 and now manages more than $7bn.
Flooding is always a major risk. Aberdeen is looking at a return to revenue by 2027, but if funds continue to perform under global conditions, it may be difficult to attract new independent financial advisers to its area. This could limit future growth and keep pressure on the share price.
Thinking long term
When markets are volatile and the future feels uncertain, inexperienced investors act on a long-term mindset.
Structural growth campaigns remain in place across the investment landscape. The responsibility for funding retirement is increasingly falling on individuals, while the advice gap continues to widen.
The wealth of the baby boomer generation will see tens of billions of pounds transferred over the next 20 years.
These forces create opportunities for new companies with strong products that can bring financial solutions to a complex world.
For long-term investors, this isn’t just about growth – it’s about locking in steady income for decades. And Aberdeen is far from the only opportunity I’m looking at.
