Stock market

£17,000 in savings? Here’s how I’d target a huge passive income.

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Recent research from money.co.uk shows, in 2024, the average UK savings account has £17,365. Invested wisely, such money can generate huge passive income by itself.

The catch is that big passive income rarely comes from bog-standard savings accounts. For most of the last decade, this type of account could earn a percent or two a year. I’ve seen cash ISAs offering as little as 0.25%. It just isn’t going to cut it.

Profitable nature

My favorite way to grow savings is the stock market. gave London Stock Exchange Offers access to thousands of businesses that anyone can buy with just a few pounds upfront. All these businesses also aim to increase the value of their shares.

Of course, the lucrative nature of stocks and shares is no secret. Billions of pounds are paid out every year in dividends and record profits like giants Shell or Tesco are rarely far from the news headlines.

The question is not so much ‘Do people make money in the stock market?’. Rather, it is more ‘How do people make money in the stock market?’. The hard part is choosing the right horses for the back.

With thousands of businesses listed in London, and also across the globe, it’s possible to narrow down the selection with the appropriate need.

One requirement is the ’10-bagger’. The phrase was coined by billionaire investor Peter Lynch and refers to a company that has seen a 10-fold increase in share price.

10 times

Nvidia There is an example that most people will know. In May 2020, the shares were worth less than $88 each. Today, shares change hands at $887. That’s more than tenfold in a few years. So, Nvidia is one of those 10-baggers.

And while American tech has had a pretty stellar few years, we don’t have to look to computers or even America to find 10-baggers. These companies are close to home.

A familiar name Rolls Royce (LSE: RR) achieved this feat not too long ago. Shares were as low as 42p in October 2020. Now they go to 428p. That’s 10 times the return for another 10-bagger.

I still own Rolls Royce shares and I like the future of the company. While I don’t see another 10-fold return happening quickly – the pandemic year of 2020 made many travel-adjacent stocks extraordinarily cheap – I think this could be one of the better ones. FTSE 100 are the owners of the companies.

Rolls has a strong position in an industry with high barriers to entry. The average skilled engineer is unlikely to go out and build a new startup building engine very easily. This gives the rolls considerable protection from competition.

Airbus In 2015, its A350 wide-body aircraft was released. Is Rolls-Royce one of the engine manufacturers that can produce engines for these new aircraft?

Well, yes, because it’s the only company whose engines work. The A350 aircraft is operated exclusively by Rolls-Royce. Trent xwb engine

One drawback is the price. Rolls-Royce trades at around 29 times forward earnings, the highest on the FTSE 100.

Am I buying?

Still, I expect the future of this British company to be bright. The only reason I don’t buy more is because my position is already big enough!


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