Here’s how to aim for a £10k second income using an ISA
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When investing for the long run, a Stocks and Shares ISA can be a powerful tool for unlocking a second income of £10,000+. And even modest investors with only £450 to spare each month can begin working towards this target right now. Here’s how.
Step 1: unlock the power of compounding
Let’s start by understanding what the goal is. By following the 4% withdrawal rule, a portfolio needs to be worth at least £250,000 to generate an annual passive income of £10,000.
This is where compounding comes to the rescue. On average, the UK stock market has generated an 8% return each year. And by drip feeding £450 each month at this rate of return, the time needed to reach £250,000 works out…
