Weekly, FTSE100 On average, profitable companies pay out over £1 billion in dividends to shareholders.

It’s basically the FTSE 100. Many smaller UK companies also pay out huge amounts of money in dividends.

So could someone aim to build grave wealth over the long term by simply investing in carefully selected UK income stocks?

I think the answer is yes, for three main reasons.

Three levers of wealth creation

The first reason is the benefit of long-term, regular investments.

Even with relatively modest amounts, a drip feeding the investment in the long run can mean that everything will pay off quickly.

The second factor is how much dividends can add to your invested money. Dividends are never guaranteed, but they can be substantial.

If they remain constant, someone who buys one share of the company’s stock today could potentially earn dividends on it for decades – perhaps for the rest of their life, if they keep at it.

The third factor is the so-called folding. This means that the dividends are reinvested, which in turn allows you to earn more dividends.

Billionaire Warren Buffett compares rising incomes to pushing a snowball down. As the snowball rolls, it becomes exponentially larger as the snow collects more snow, and so on. In the stock market, that snow could be dividend income!

It all adds up – sometimes a lot!

For example, let’s say someone starts with nothing today and then invests £500 a month and grows their portfolio by 5% a month.

5% is well above current FTSE100 the yield is 2.9%, but there are many blue chip companies in the UK that offer yields of 5% or more.

In this illustration, the portfolio should be worth over £100,000 at the end of the 35-year period554,000.

So an investor would already be halfway to becoming a millionaire by investing £500 a month.

One dividend stock to consider

I mentioned above that there are many profitable stocks in the UK with returns above 5%. There is one Happy Stroke producer British-American tobacco (LSE: BATS).

FTSE 100 shares have a yield of 5.4%. It also has a history of annual dividend per share increases dating back several decades.

The Management Board aims to maintain annual dividend growth. However, cigarette sales volumes are sinking and this trend looks likely to continue. This could hurt profits and the company’s ability to finance a costly dividend.

Even though cigarette sales volumes are sinking, British-Americans may raise prices to ease the impact on profits.

It has also been expanding its product offering in recent years in an attempt to boost sales of products other than cigarettes. This could assist you continue to generate significant cash flow in the future.

Some investors avoid tobacco stocks for ethical reasons, regardless of their earnings potential. But for those who don’t, I think British Americans are a part worth considering.