Building a second income from a Stocks and Shares ISA sounds simple enough. But how many investors can realistically keep investing every month for 20 years without interruption?
Why consistency matters more than most investors realise
Second income from a Stocks and Shares ISA is often framed as a straightforward numbers exercise: build a large enough portfolio and the income follows.
But for most investors, the real challenge is not calculating the target — it’s maintaining consistent contributions through different life stages and market cycles.
Assuming a 6% annual return, building a £300,000 ISA would require contributions of roughly £8,200 a year over 20 years. Using a 4% withdrawal rate, that could generate around £1,000 a month in second income.
In practice, very few investors contribute in perfectly straight lines for two decades. For example:
- A life-cycle investor contributing smaller amounts early on, larger sums during peak earning years, and less later in life could still end up close to the same outcome.
- An irregular investor who stops contributing entirely for five years can still recover lost ground — but only by sharply increasing contributions later, potentially investing around £19,000 a year for five years simply to catch up.
That second example highlights the power of consistency. Missing several years of investing does not necessarily make the target impossible but it can place heavy pressure on future savings because less money has had time to compound longer.
That’s why portfolio construction and stock selection matter. Stronger long-term returns reduce the burden on future contributions and make meaningful second income more achievable.
A compounding engine hidden in plain sight
One business that fits this idea of long-term consistency and compounding is RELX (LSE: REL).
At first glance, recent volatility in the share price has been driven by concerns that artificial intelligence could disrupt its legal, scientific, and risk analytics businesses. On the surface, that sounds like a genuine threat.
But the more interesting point is that RELX is not standing outside the AI shift — it’s actively embedding it into its own products.
Across its divisions, the group is using AI to enhance its core offering. It helps lawyers, insurers, researchers, and risk professionals make faster and more accurate decisions using proprietary datasets built over decades.
This matters because the real moat is not the interface, it’s the underlying data. And that data becomes more valuable, not less, as AI tools improve.
In my view, this is where the market may be misunderstanding the story. Rather than being disrupted by low-cost AI tools, RELX sits closer to a ‘picks-and-shovels’ provider of trusted information that AI systems themselves rely on.
That creates a very different type of investment proposition. Growth is not explosive or cyclical but repeatable and driven by subscription renewals and embedded workflows.
What could go wrong
There are still risks. If AI adoption meaningfully reduces demand for human-led professional services, growth could slow at the margin. The valuation is also not cheap relative to the wider market.
However, what stands out to me is the consistency of performance through different cycles, and the ability of the business to compound earnings year after year without needing heroic assumptions.
For investors focused on building long-term second income through consistency rather than timing, RELX is the type of business that quietly does the heavy lifting in a portfolio.
