A monthly income of £8,333 from dividends in a Stocks and Shares ISA would be a dream come true for many. Even in the future, this would likely provide most with a more comfortable existence, especially if supplemented with other forms of income.

To put that figure of £8,333 a month into perspective, we’re talking about an annual tax-free income of £100,000. According to the latest retirement living standards (based on independent research by Loughborough University), this would be more than double what is officially defined as a “comfortable” retirement for one person.

But how substantial would an ISA have to be to generate this level of income?

The miracle of mixing

The bad news is that the portfolio would need to be worth around £1.43m, assuming a dividend yield of 7%. This isn’t the kind of money you can rustle in the night or find on the back of a sofa.

The good news, however, is that it can be built over a long period of time. This is especially significant if effective methods are used along the way.

One is to reinvest dividends until the goal is achieved. This drives compounding as cash dividends are used to buy more dividends and then do the same thing year after year.

Another shrewd thing you can do is to have a separate fund for a rainy day. This would be ready for emergencies (broken boiler, car repairs, sudden downsizing, etc.). This prevents the shares from being sold and the merger process being interrupted.

Finally, shrewd investment decisions can generate excellent returns, reducing the time it takes to reach £100,000 a year. These include a focus on high-quality companies with sustainable cash flows, solid returns on capital and robust balance sheets.

Gaining experience

Of course, not every investment will be successful. Individual dividends may be cut if the company encounters difficulties. However, it may be helpful to avoid loss-making companies with questionable competitive positioning and overvalued stocks.

I think that over time, as my research and stock selection skills improve, it will be possible to achieve an average annual return of 11% (although this is not guaranteed). If this were achieved, it would take approximately 27 years to reach the £1.43 million mark. This is done by investing £750 per month (excluding platform fees).

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

A global bottling giant

One FTSE100 a stock worth considering to support grow your portfolio Coca-Cola HBC (LSE:CCH). This European company bottles and sells brands Coca-Cola in various parts of this continent and Africa.

We are looking at brands such as Fanta, Schweppes, Leprechaunand of course Coca-Cola. It also sells Costa and coffee products Monster energy drinks.

For years, they have helped generate 9-11% sales and profit growth. This is reflected in a five-year share price escalate of 60%. That’s before dividends, which have also increased significantly.

One thing that could hold stocks back is a keen rise in inflation. If this were to happen, it could force the company to raise prices, potentially putting pressure on volume growth.

Overall, I think this is an excellent British action that beginners should consider. The company agreed to acquire a controlling stake of 75% of the company’s shares Coca-Cola Drinks in Africa. It is the largest Coca-Cola bottler on the continent and the transaction opens long-term growth opportunities in 14 emerging and frontier markets.

The stock is inexpensive and offers a dividend yield of 3.1%.