There is one way in it British American tobacco (LSE: Bats) seem perfect for the amount that we may win from investing the stock market in the second income. Currently provides 6.9 % profit distributions. This happens largely on average FTSE 100 The annual return for the past twenty years.

Therefore, we can use it as a potential representative of the average returns. Meanwhile, we see how we can evaluate individual income stocks.

Let’s get to his heart. One ISA allowance for 6,000 pounds can grow in stock 6.9 % every year, with stock profits reinforced, to 76,000 pounds in 20 years. The same return can generate a second annual income of 5,200 pounds.

Therefore, this is the question that was answered, just put the money in the American American tobacco and wait. The mission has been accomplished … Oh, wait for a minute, we really need to look a little deeper.

More to look

The stocks never guarantee. There is no single answer that suits everyone to invest in the long term. We do not have the same amount of money. In fact, most of us will invest less than 20,000 pounds per year. But we may be able to invest regularly instead of one cut.

We will not all want to buy the same shares. I think American American tobacco is worth looking at those who want to build a passive income container.

It has a busy record of profit growth, and predictions show that they are continuing. The profits did not rise smoothly, but the trend rises well. They must cover the profits between 1.3 times and 1.4 times during the next three years if expectations appear correctly.

Tobacco threat

The end of the Insustry tobacco threat is a clear risk. But I am not sure of this happening any time soon. We had an update from the company on June 3 before the results of the first half due on July 31.

The company expects “Accelerate the revenues of the new category H2“These products from the next generation do not include burning and smoking tobacco. The more this part, the more you see them softening the risks. But the risks will not disappear.

Oh, I am superior to perhaps the worst danger. Do we really want to put all our eggs in one basket? He can seek trouble. This is why I say that we must be aimed at diversifying in our investments ISA.

The same but different

We may achieve the same annual annual return from a variety of wallets, although there will be a rise and a decline along the way. We may be able to invest 10,000 pounds every year. We can then talk about really dangerous money, with the possibility of building 420,000 pounds in 20 years. 6.9 % return on it? Cold 29,000 pounds £ every year.

This is the last thought. Do this for 30 years with the same total return, and we can reach 960,000 pounds. The value of 10 years may be more than the first twenty. We may finish with a value of 66,000 pounds annually.