This amazing income stock just paid me £217. It's all part of my plan to make a million

Treasurer IM&G's (LSE: MNG) is one of the highest yielding stocks in total FTSE 100 with a trailing yield of 9.44%. That's why I bought it.

If M&G can maintain shareholder payouts I can expect a steady stream of dividends over the years. In fact, I got paid today, and I didn't have to lift a finger to get it. That's why they call it passive income.

I bought M&G shares three times last year – in July, September and November. In total, I invested £4,000.

The M&G price has gone nowhere, but I don't care

M&G's share price fell 13% in March after disappointing full-year 2023 results. Over one year, shares are up 5.19%.

So what went wrong and, perhaps more importantly, why am I not worried about it?

IM&G had a solid 2023, in my opinion. Adjusted operating profit before tax rose 27.5% to £797m, beating consensus of £750m.

However the stock sold off as investors were disappointed by a small increase in the dividend by 10 cents, from 19.6p to 19.7p. Dividend growth has been slow, as this chart shows, but given the high yield, I'm not too worried.

Chart with TradingView

On 4 September, the M&G disappointed again by reporting net outflows of £1.5bn for the six months to 30 June. Adjusted pre-tax operating profits fell by 3.8% to £375m.

Again, I'm not too worried, because the market was volatile in the summer. In fact, I'm feeling chipper today, as most investors are, after a good week for both the FTSE 100 and S&P 500 in the US.

This is not the only benefit I receive

If the UK economy improves and the US Federal Reserve engineers get a soft landing, M&G's next results could be very clear. Also, the dividend will look even more attractive as interest rates fall and bond yields and savings rates follow suit. Assuming that happens, of course. We are not out of the woods yet.

Although the share price is disappointing, I am happy with my second income. Today, £217.07 is not my first dividend. On 9 May, M&G paid me a bumper £408.27. On 3 November last year, I deposited £135.59.

So last year, I received a total of £760.93. I reinvest every penny. So far my shares have bought me 364 more M&G shares at no extra cost, bringing my total to 3,289. Those shares will pay me more dividends in the future, which I will reinvest to buy more M&G shares, in an endless virtuous circle.

Benefits are not guaranteed of course. IM&G has to generate cash to pay for it. Also, if the share falls, what I have gained in income I can lose money.

In the long run, I expect to end up comfortably ahead on both sides. So how do I plan to turn these small, regular payments into a £1m portfolio? By investing in dividend paying stocks that keep sending me regular cash payments throughout the year, and reinvesting them over and over again.

My second income turns into retirement money, and I don't have to do anything to get it. Without buying shares in the first place.