How investing just £1 per day in FTSE 100 stocks can help you beat the State Pension

 

How investing just £1 per day in FTSE 100 stocks can help you beat the State Pension

first_img “This Stock Could Be Like Buying Amazon in 1997” See all posts by Peter Stephens Peter Stephens | Saturday, 15th February, 2020 Image source: Getty Images. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Simply click below to discover how you can take advantage of this. How investing just £1 per day in FTSE 100 stocks can help you beat the State Pension Investing in the FTSE 100 may seem to only be worth doing if you have a large amount of capital. However, that’s not necessarily the case. Even investing £1 per day can lead to a sizeable retirement nest egg which provides a worthwhile passive income in older age.As such, with it being cheaper and more cost-effective than ever to buy FTSE 100 shares, now could be the right time to start planning for your retirement in an era where a rising State Pension age is likely to become the norm.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...CompoundingThe FTSE 100’s growth rate may have stalled over the past few years, but it has a long and robust track record of delivering impressive returns. In fact, since it was first started in January 1984, the index has returned 9% per annum when dividends are reinvested. Over the long run, this could turn even modest sums of capital into surprisingly large amounts.For example, investing £365 per year (or £1 per day) could produce a nest egg valued at around £191,000 during a 45-year working lifetime. From this, you could obtain an annual income of almost £8,500 due to the FTSE 100 offering a dividend yield of 4.4%.Certainly, the more you’re able to invest and the more time you have available for compounding to catalyse your returns, the larger your eventual nest egg is likely to be. However, the example serves to show that investing even modest amounts of capital, which are likely to be achievable for the vast majority of people, could be a worthwhile means of planning for retirement.Investment opportunitiesPerhaps the simplest and most efficient means of investing in FTSE 100 shares is through a Stocks and Shares ISA. It can be opened online in a matter of minutes, and its administration fee is often affordable for the vast majority of investors.For individuals with modest amounts of capital available to invest, focusing on a FTSE 100 index tracker fund could be a sound move. It provides a high degree of diversification as well as the opportunity to capture a very similar return to that of the wider index. Tracker funds are also cheap to buy and own, in most cases, and will therefore not eat into your overall returns to a large degree.After a period of time, you may wish to start buying individual shares. They could provide the opportunity to outperform the wider FTSE 100 and may enable you to obtain a larger portfolio value from which to draw a passive income in older age.Clearly, diversifying across a range of shares is imperative to reduce overall risk. With the index appearing to offer numerous stocks that have growth potential and which are trading at a reasonable price, now could be the right time to start buying FTSE 100 stocks to improve your prospects of enjoying financial freedom in older age.center_img Our 6 'Best Buys Now' Shares Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee. I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Enter Your Email Address Peter Stephens 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.last_img

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