- MNG.L
Legendary long-term investor Warren Buffett best encapsulated the idea of <a If you don't find a way to make money while you sleep, you will work until you die".
The optimal way I have found of making money while I sleep is by investing in high-dividend yield.
Another is strong forecast profit growth for the underlying business. That ultimately supports existing dividends and powers them higher over time.
And the final element I look for is significant undervaluation in the stock. That way, I might make some profit on a move higher in the share price as well.
What’s on my radar screen right now?
Global savings and investments business M&G (LSE: MNG) ticks all the boxes for me. Its 3 September-released H1 2026 results saw a record adjusted operating profit of £435m, representing a 15% year-on-year increase. It was, in fact, M&G’s highest operating profit since its public listing in 2019.
The group pulled in £2.4bn in net inflows from its open business division, underpinning operating capital generation of £392m. That keeps it on track to meet its cumulative £2.7bn target for the 2025–2027 cycle.
Meanwhile, its Shareholder Solvency II coverage ratio climbed to 247% (from 242% at the end of 2025). That far exceeds the standard minimum requirement of 100%, indicating a highly resilient capital buffer.
How much dividend income?
A risk to M&G’s profits is a prolonged period of especially volatile markets that could deter new investment inflows. Another’s increased competition in the sector that could squeeze its margins.
Nonetheless, analysts forecast that its profits will rise by a whopping yearly average of 44.5% over the medium term at minimum.
That should easily support the projected 7.3% dividend yield by end-2028, although this could go down and up over time.
So another £20,000 added to my existing holding in the stock could make me £157,523 in dividends after 30 years. That’s the end of a standard long-term investment cycle. The number also reflects the dividends being reinvested in the shares to harness the turbocharging effect of dividend compounding.
What about price gains too?
Long-term investors like me often use the gold-standard discounted cash flow model to forecast a share’s trading price over time.
