Building a Second Income Through a Stocks and Shares ISA: How to Compound £12,500 into a £8,084 Annual Income
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Investing in a Stocks and Shares ISA can be a strategy to build a second income. By buying and holding quality dividend-paying enterprises, investors can receive tax-free extra income or reinvestment capital. Reinvesting dividends received in the short term can accelerate compounding. Investing £20k a year at 10% for three decades would lead to a portfolio worth £3.8m, generating an income stream of £226,100 a year.
LondonMetric Property Plc (LSE:LMP) is a good stock to consider for building an income portfolio. However, investing in stocks carries risk.
According to an article from Motley Fool UK by Dr. James Fox, the writer discusses how they would aim to compound £12,500 in cash into a £8,084 annual second income. The writer suggests investing the money in a Stocks and Shares ISA, whi...
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