Some inventive individuals can dwell properly off the passive revenue they earn from royalties from their works. And that’s only one method to assist fund a snug retirement.

However what probability does an artistically talentless nerd like me have? A superb one, I feel. And it’s all as a result of I spend money on FTSE 100 shares.

It helps to begin as early as doable in life, and put away as a lot as we are able to every month. However how a lot, and the way lengthy we have to do it, relies on just a few issues. My two key ones are what sort of revenue I feel I’ll want, and what annual returns I would be capable of handle.

Lengthy-term returns

Over the previous 20 years, the common FTSE 100 return has are available at 6.9% yearly. So, as my instance immediately, I’ll use one in every of my long-time favorite dividend shares, Aviva (LSE: AV.). I select it as a result of it has a forecast dividend yield of… 6.9%.

That’s not assured, as dividends by no means might be. And I’m not interested by any share price appreciation. If it might make 2% a 12 months on high, I can consider that as an inflation adjustment.

In actuality, I’d by no means put every little thing into one inventory. I’d unfold my cash throughout totally different dividend shares in numerous sectors for some diversification. And I hope to have the ability to match that historic 6.9%.

I feel Aviva is a good instance for me to make use of. Particular person buyers must set their goals in step with their very own wants and with how a lot danger they’re snug with.

How a lot do I would like?

What different revenue, from pensions, for instance, do we have now? How costly is our way of life, and the price of residing the place we dwell? They’ll all affect what we have to obtain.

If I needed to focus on a passive revenue of £20,000 from an annual 6.9% return, I’d have to construct up a pot of round £290,000. And that would appear to be a fairly daunting quantity.

But when I may put £1,000 a month into Aviva (and it maintains its 6.9% very 12 months), I may get there in 15 years. And even when I may handle a extra modest £500 a month, I may nonetheless attain my objective in 22 years.

Or if I solely needed £10,000 a 12 months so as to add to no matter different revenue I’ve, I’d have to set a £145,000 objective. On the identical foundation, I may hit that in simply 9 years at £1,000 per thirty days. Or stretch it to fifteen years at £500 every month.

Selecting shares

Aviva itself, although one in every of my favourites, is within the monetary sector. And we’ve seen how robust that may be. In any shaky financial occasions, I’d count on financials like banks and insurance coverage corporations to endure.

And although the Aviva share price has accomplished effectively in 2024, I nonetheless see volatility forward.

However with diversification, I feel it might assist me to match these long-term FTSE 100 returns. Or perhaps even beat them.