I have been looking ahead to 2025 and thinking about how to grow my passive income streams. Here is my plan!

Genuinely passive income

A lot of ideas to earn money without working for it actually seem to end up involving a fair bit of work.

By contrast, my approach is simple. I plan to put money into blue-chip shares with proven business models. Then, hopefully, I will sit back and let the dividends roll in.

I will focus on shares I expect to pay dividends (not all do). Still, even a promising looking share can disappoint, so I will keep my portfolio diversified across a number of different companies.

Getting into the regular savings habit

Investing takes money. But it does not necessarily require a lot of it.

I will try to get into the habit of regular investment across 2025. To do that, I will first choose a share-dealing account  or Stocks and Shares ISA that best suits my own financial circumstances.  

Then I will put money in regularly. Even just £3 a day would add up to almost £1,100 in 2025 alone.

Aiming for big dividends, now and in future

My next move would be to find dividend shares to buy that I hope can turn my passive income dreams into reality.

What will I be looking for? Let me start from the end goal.

I want dividends, which means I should invest in companies I expect can generate enough spare cash to fund them. That spare cash ought to be generated by a business that has pricing power on a large scale.

So I will look for a business in an area with high customer demand that can lean on at least one competitive advantage that means potential (or current) customers are willing to pay more for it.

Hopefully, that could mean big dividends not only in 2025, but also beyond.

One income share to consider

As an example, one share I think passive income-focused investors should consider is insurer Phoenix (LSE: PHNX).

It may not be household name, but the FTSE 100 firm operates using well-known brands such as Standard Life. With well over 10m customers, the UK business has a massive client base I think sets it up well for years to come.

The business model here is both simple and complicated. That is, it looks simple onthe surface – but can be complicated in practice.

As an example, consider Phoenix’s mortgage book. That seems like a straightforward part of its business and could be lucrative if things go well. But if there is a property market crash, the pricing assumptions involved could fall short, leading to a loss for Phoenix.

Income streams from diverse companies

Still, I reckon Phoenix and its 10.3% dividend yield is worth a look. On an annual investment of £1,095 (£3 a day), that yield equates to over £142 in passive income.

The average FTSE 100 yield is a bit over one third of Phoenix’s. But by diversifying across different shares, investing £3 a day not only in 2025 but for years to come and potentially reinvesting my dividends, I hope to set up long-lasting and hopefully growing passive income streams!