To aim for £1,000 a month in passive income, should I buy growth shares or value shares?

Growth shares and value shares both offer returns that can equate to a decent amount of monthly passive income. While growth shares focus on growing the business and, subsequently, the share price, value shares try attract investment through dividends. While growth shares can be more profitable and volatile, value shares typically provide a slow yet reliable source of income. So which is best for passive income? Well, that depends. It makes sense to shift focus towards dividend-paying (value) shares the closer one gets to retirement. This ensures regular payments are made throughout the year to support financial needs. But early investors who are financially stable could build a larger retirement pot from growth shares. A portfolio of growth shares that increase at an average of 7% annually would need £171,000 invested to return £12,000 per year. Naturally, a portfolio of shares with an average 7% dividend yield would achieve similar returns. The trick is evaluating the growth prospects and the consistency of dividend payments to assess the best long-term option. With a £237bn market cap, AstraZeneca (LSE: AZN) is one of the most popular pharmaceutical stocks on the FTSE 100. A recent earnings report revealed £47bn in revenue and £39bn...

Read more