Here’s how I’d invest £100 per week in an ISA in 2021 to start earning a passive income

first_img Earning a passive income from investing in an ISA may seem more difficult now than it has been in previous years. After all, low interest rates are likely to remain in place throughout 2021. That means assets such as cash and bonds continue to offer low income returns.However, the stock market crash means that many FTSE 100 and FTSE 250 shares have high dividend yields at the present time. Their low share prices and maintained dividends could hold long-term investment appeal. Therefore, even modest regular investments could be a good starting point to make a rising income over the long run.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…Investing £100 a week in an ISA to make a passive incomeAt the present time, the FTSE 100 offers a generous passive income. The index currently yields nearly 5%. That’s because it’s trading significantly lower than its record high following the 2020 stock market crash. Moreover, many of its members offer even higher dividend yields than the index at the present time. As such, an ISA investor could realistically build a portfolio of FTSE 100 shares that together have a combined yield in excess of the index’s 5%.Furthermore, it may be possible to obtain a relatively resilient income return from FTSE 100 and FTSE 250 shares. For example, investors may wish to consider a company’s financial position before they purchase. Businesses with low debt levels and substantial interest cover may be better able to cope with a period of weaker sales. Similarly, stocks with dividend cover in excess of one (where net profit covers dividends more than once) may offer a more robust passive income in 2021 and beyond.Obtaining a rising income return in the long runOf course, a £100 weekly ISA investment is unlikely to return a passive income large enough to provide financial freedom in 2021. However, the prospect of an improving economic outlook means that dividend growth rates in 2021 and beyond could strengthen significantly versus their current rates.After all, the world economy has always recovered from its downturns to post strong GDP growth over the long run. As a result, ISA investors may be able to enjoy a high yield today that grows at a fast pace over the coming years.As such, investing in companies that not only have high and affordable yields, but also offer dividend growth potential in future, could be a shrewd move. They may include stocks that are likely to benefit from long-term growth trends within their industry. Or maybe those companies with wide economic moats that can lead to rising profitability over the long run. They may be able to afford fast-rising dividend payouts in the coming years. And that could transform a modest regular ISA investment in 2021 into a surprisingly large passive income in the long run. Peter Stephens | Thursday, 3rd December, 2020 Image source: Getty Images. Enter Your Email Address Simply click below to discover how you can take advantage of this. 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. 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. Here’s how I’d invest £100 per week in an ISA in 2021 to start earning a passive income 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. “This Stock Could Be Like Buying Amazon in 1997” Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Peter Stephenslast_img read more

"Here’s how I’d invest £100 per week in an ISA in 2021 to start earning a passive income"