Money sitting in a bank can earn more money, depending on the interest rates. However, in the long run, my own approach to building a second income is investing in Blue-Chip shares of proven companies that, I hope, can pay me dividends.

For the patient’s investor, this approach can be lucrative. This is how £ 20,000 can be used for aiming 913 £ second income each monthon average.

Sticking to the basic approach

By the way, I should say in advance that this monthly payment lasts after 25 years. As I said, this approach is for the patient. It can be used for faster construction of a second income stream (in fact much faster), but at a lower level. Different investors will have their own priorities.

Although patience is part of this approach, it also does not involve anything particularly demanding outside the initial investment.

My preferred approach is to stick to well -established companies with proven companies. Sometimes their share prices do not go anywhere for a long time, but by rejecting a lot of free cash, they can finance generous dividends for shareholders’ salary.

Mathematics

If the investor places 20,000 GBP on the stock exchange and reached an 8% annual growth rate (CAGR), after 25 years it should be worth almost 137 thousand. GBP. With 8% performance, it would mean £ 913 per month.

This elaborate annual growth rate may result from capital or dividend profit. But share prices may rise, as well as down, and dividends never have a guarantee. Of course, it is essential to carefully choose shares to buy.

However, on the current market I believe that 8% of CAGR is realistic, even when proving FTSE 100 Shares in a blue chip.

One share to be considered

As an example, one share, I think that investors looking at the second income should take into account the FTSE 100 financial services giant Legal and general (LSE: LGGE). The company operates on the market with high demand, which I expect resistant over time.

Thanks to a robust brand, a vast customer base and deep experience that reach for centuries, it has been consistently profitable in recent years.

Despite this, the profits have been lower than before in the last few years, and Legal & General has announced plans to raise the annual dividend to a lower level. However, growth is still an raise and the performance is already 9%.

One risk I see are profits falling due to the planned sale of a vast American business. However, in the long run I perceive legal and general as investors.

Moving from dreams to action

This approach to obtaining a second income is basic, but it requires action!

The useful first step would be for someone to choose an account, ISA shares and shares or an application for the campaign, in which they can introduce 20,000 pounds, ready to start investing. Then they can look for actions that can buy and build a second income, diversifying several different in case he disappoints.