Building a second income can include more work on your own – or negative benefit from the work of others.

In practice, this may mean earning money thanks to the acquisition of profits in the installed blue companies such as Tescoand appleOr coca cola.

Below is how this approach can be used to target the second annual income of 8,794 pounds annually on average.

The stock distributions can be profitable income sources

When the company creates more money than you need, it can do different things with it. Some companies save them for a rainy day, while others invest them for business growth. Some profits profits.

Never guarantee stock profits. In fact, this is one of the reasons that make the smart investor the diversity of his portfolio through a number of different shares.

But stocks can be profitable. Take a share with 5 % profit distributions, for example. Someone buy it will earn 5 % of his initial investments every year in profits. They will also have shares, which may rise or decrease during their ownership period.

Using profits to build income flows

Thus, having a variety of profit shares may be one way for someone to try to build a second income.

Starting with a broken investment amount, the income can begin to flow within months or even weeks. But even without a cut amount, this plan can still work if someone drives the money in it regularly.

For example, putting 100 pounds per week gives someone an investment more than 5,000 pounds annually. 5 % return on this will reach 260 pounds per year.

But there is much greater potential.

It doubles 5,200 pounds annually by 5 % for 20 years. 176,000 pounds sterling. At 5 % profit distributions, this would generate a second annual income with a little less than 8,800 pounds.

Start

To do this, the investor needs a way to provide these normal contributions and then use them to buy shares. This can be an account available for stocks or stocks and shares in ISA, or apply to deal with stocks, for example.

One shares I think investors should consider the second income capabilities is the insurance company Phoenix Group (LSE: PhNX).

Unlike some colleagues FTSE 100 Insurance companies, Phoenix is not a familiar name. However, it works under well -known brand names such as Standard Life.

It has a policy of distributing progressive profits, which means that it aims to develop its profits for the share annually. Not only that, but its current profit revenue is 7 % is already more than twice the average FTSE 100.

Phoenix works with multiple power points, from millions of customers to a model that has great potential to generate money.

However, like any work, Phoenix also faces the risks. For example, it contains a large mortgage book – if the weak economy leads to a sharp drop in real estate prices, this may mean that the assumptions of evaluation in the mortgage book no longer bearing, which harms profits.

In the long run, I think Phoenix has the ability to continue to be a great motivation in profits.