Image source: Getty Images <\/p>\n
At this time of year, the idea of having a second income to fall back on can certainly seem attractive!<\/p>\n
A second income does not necessarily mean that someone is juggling multiple jobs. There are different ways a person can aim to earn an additional income. One is buying up a bunch of shares in companies that will hopefully pump out dividends in future.<\/p>\n
I understand that when someone decides a second income could come in handy, they may be thinking of how handy it would come in right now.<\/p>\n
But taking a long-term approach can mean setting up a second income in future \u2013 and letting time work to your advantage between now and then.<\/p>\n
As an example, say someone has a spare \u00a39k and invests it in a diversified portfolio of shares that earn an average dividend yield of 7%.<\/p>\n
After 25 years, that portfolio ought to have grown to a size where a 7% dividend yield would produce around \u00a33,419 of passive income each year.<\/p>\n
As a starting point, someone needs a practical way to invest. So one step they could take this week \u2013 indeed, right now before the year gets any older \u2013 would be choose a share dealing account, Stocks and Shares ISA or trading app.<\/p>\n
It also helps for someone to set an investing strategy that plays to their strengths , reflects their investing objectives and aims to strike a suitable balance between potential risk and reward.<\/p>\n
For example, a 7% yield is well above the current FTSE 100<\/strong> yield of 3.1%. But I do not think it necessarily requires investing in little-known, risky companies (which is certainly not my cup of tea).<\/p>\n I reckon an investor can build a high-yield portfolio from quality blue-chip dividend shares in proven companies.<\/p>\n As an example, one share I think investors should consider is FTSE 100 financial services firm Legal & General <\/strong>(LSE: LGEN).<\/p>\n Despite yielding 8.3%, I already know that the company aims to grow its dividend per share in 2026. That is part of a longer-term strategy of annual dividend growth.<\/p>\n Can it deliver? After all, no dividend is ever guaranteed. Longstanding Legal & General shareholders discovered that during the 2008 financial crisis, when the company cut its payout.<\/p>\n Any big enough future financial crisis that leads to policyholders pulling out funds brings a similar risk. I also think this year\u2019s expected sale of a large US protection business will leave a hole in the company\u2019s revenue streams, although it will also bring in a large chunk of cash.<\/p>\n But I like Legal & General because it has shown it prioritises shareholder returns, has a strong brand, and uses a proven business model. The retirement market on which it is focused is large and resilient.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images At this time of year, the idea of having a second income to fall…\n","protected":false},"author":2,"featured_media":674478,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5018,3,4],"tags":[155154,748,129816,393,4884,1144,19536,712,205090,16,15,1764],"class_list":{"0":"post-674477","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-britain","8":"category-uk","9":"category-united-kingdom","10":"tag-additional-income","11":"tag-britain","12":"tag-diversified-portfolio","13":"tag-england","14":"tag-great-britain","15":"tag-northern-ireland","16":"tag-passive-income","17":"tag-scotland","18":"tag-share-dealing","19":"tag-uk","20":"tag-united-kingdom","21":"tag-wales"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115840041882104476","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/674477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=674477"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/674477\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/674478"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=674477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=674477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=674477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}