One of my favorite ways to target in the future is to invest in stocks. More specifically, investors can take advantage of tax covers such as arrows, ISA, or SIPP, to achieve future income.

Within these, it is possible to own a set of managed funds, ETFS, or individual stocks.

Please note that the tax transaction depends on the individual conditions of each customer and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, nor form any form of tax advice. Readers are responsible for carrying out their due care and obtaining professional advice before making any investment decisions.

Targeting 1000 pounds from the monthly negative income

If the investor wants to target a monthly income of 1,000 pounds, this is equivalent to 12,000 pounds annually. The withdrawal rate is common to use of 4 %, meaning that this investor will need a bowl of 300,000 pounds.

This may seem like a muffled amount, but when collapsing over many years, it is more manageable.

For example, I calculate that a 40 -year -old child will only need to invest 500 pounds per month for 20 years to build such an amount. Some eagle -eyes readers may notice that this adds up to a total investment of 120,000 pounds.

This is because I expect the appearance of a value of 180,000 pounds remaining from the investment gains over time. The assumption here is that it grows by 8 % per year. Given that long -term investment returns were about 8 % -10 %, I think this is a reasonable assumption.

Of course, by targeting larger returns (and accepting greater risks), the investor can reach his goal faster. One of the ways to do this is to choose and keep individual stocks for many years.

Bonuses of long -term investment

One in this way FTSE 100 Share what I have for several years Gaming workshop (LSE: GAW). The price of his share has increased by more than 1,200 % since I bought it for the first time in 2017.

If the investor has spent 500 pounds per month on this stock since then, they will be sitting at more than 210,000 pounds already. This is a tremendous achievement in just eight years. This is also likely to lead to much negative income of what is planned.

But there are some things to consider. First, I will never suggest that anyone invest everything in one arrow! Second, the game’s game workshop was not great enough to be in FTSE 100 again in 2017. It was a much smaller work.

Smaller companies can often grow much faster than mature giant companies. While the UK’s little investor, Jim Slater, mocked the famous, “Elephants cannot“.

It was also circulated at a much lower price to profits. Today, about 30, but in 2017, it was circulated to 10 times of profits. It is not as cheap as it was.

It is still a great work

In the future, I still consider the gaming workshop a high -quality work with wide potential. It works in a specialized market that is difficult to repeat. This gives it a competitive advantage.

On the other hand, a double profit margin earns two numbers and an incredible return of 70 % on the capital operating.

In recent years, I have been partnership with Amazon to bring some of the world of vast characters to movies and TV shows. It has a much more space for licensing revenues.

The long -term investor can consider this and similar prospects. Although many can make mistakes in individual stocks, by choosing a variety of 10-20 names, they will spread the risks.