£5,000 in savings? Here's how I would aim to turn that into £1,400 a month of passive income

There is no right or wrong way to target life-changing income. I can invest in buy-to-let assets, for example, or try to find a high-yield savings account. Franchising is also rapidly growing in popularity for those looking for extra income.

But for me, there is no better way to aim for a great second income than to invest in London Stock Exchange. There are many different ways I can spend my money. And I don't have to worry about the high startup costs or the day-to-day hassles that some of those methods involve.

If I had £9,000 to spare – and could add extra cash every month for 30 years – here's how I'd target an average monthly income of around £1,400.

The easy way

Given the strong performance of UK equity indices, I see no reason to invest my money elsewhere. I FTSE 100It has delivered a healthy annual return of 7% since its inception in 1984.

I FTSE 250on the other hand, it has given a good annual return of 11% over the long term. Past performance is no guarantee of future returns, but these numbers are very encouraging.

There is a downside to picking individual stocks to buy. It is important that investors do detailed research before putting their money on the line, and regularly review their portfolios. Examining company reports, economic data, broker notes and other resources is essential to successful investing.

But this should not put investors off. The potential benefits offered make this worthwhile, in my book.

In addition, investors can reduce the amount of research they need to do by purchasing an exchange-traded fund (ETF), which spreads money across a broad basket of stocks.

I iShares Edge MSCI World Quality Factor UCITS ETF(LSE:IWQU) is one such instrument that I think deserves serious consideration.

Top bag?

This fund consists of a portfolio of global stocks with a sound track record of “strong and stable net worth“. Today, it has shares in nearly 300 companies, a feature that helps investors spread risk.

With a heavy bias towards the US – almost three-quarters of its assets are based in the States – it includes heavy stocks including Nvidia, an apple, Visa again Coca-Cola.

Some of its overseas holdings include the Danish pharma giant Novo Nordiskand a Dutch technical group ASML. UK Holdings include AstraZeneca again RELX.

Another downside would be the fund's heavy exposure to US technology stocks. A weight of 24.17% would leave us vulnerable in the event of a global economic downturn. But the potential for huge long-term gains still makes it worth a closer look, for me.

That's the second amount

Since its inception in October 2014, the iShares global ETF has delivered an annualized return of 11.02%. If this continues, it could turn a £5,000 lump sum today into £134,337 after 30 years.

That's good. But if I had invested just an extra £100 a month in the fund, I would have made an impressive £416,014. This would then be enough to give me an income of around £1,400 a month (£1,387 to be exact), based on an annual drawdown rate of 4%.