Investing £10K in this FTSE 100 giant would net me a second income worth £980

Thank you for being able to earn a decent income. However, I am looking to build wealth and a secondary income.

I believe it is most possible to do this through dividend investing.

Let me explain the steps I would take today if I were starting over.

Important things to do

First, it is important to have an investment vehicle that generates the additional income that I want.

I think the Stocks and Shares ISA is a no-brainer. The main reason for this is that dividends received are not taxed. Ideally, I want to try to keep as much of my earnings as possible, without the taxman calling.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content of this article is provided for informational purposes only. It is not intended to be, and does not constitute, any form of tax advice. Students are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

Next, I need to make sure I'm picking the right stocks with the best prospects for average returns. I realize that the highest yields out there are not always the best stocks to buy. In some cases, the high yield looks good, as I will show in the example choose later.

For me, budget investing is all about investing in stocks that offer the ability to give me regular returns now and in the future. So, is there anything to ensure the future of the business I am considering? Can it continue to earn and give me a return as an investor? Furthermore, what is the history of the company over the years? A lot of research and diligence goes into the stock selection process.

Finally, I should clarify the fact that dividends are not guaranteed. They can be terminated or canceled to save money at any time.

9.8% yield!

If I had money to invest right now to help build my extra income, Phoenix Group Holdings share price (LSE: PHNX) looks like a good stock to buy for my portfolio.

I FTSE 100 paid a dividend of 9.8 %. Now I know I've said before that I can be fooled by the great harvest, but it's not all bad.

In theory, buying £10,000 worth of shares, at a 9.8% yield, would net me £980 in dividends.

In Phoenix's case, I think it ticks all the boxes of what a good dividend stock is. First of all, the business has a strong balance sheet, which provides a level of safety when it comes to shareholder returns.

Next, the company has an excellent track record of performance, as well as revenue generation. The second is key, as those stocks with strong cash levels tend to be the best dividend payers, generally speaking. However, I understand that past performance is no guarantee of the future.

Looking ahead, the future looks bright. As the UK population ages, and many begin to think about their finances in their golden years, Phoenix is ​​well positioned to capitalize.

Finally, the shares look good value for money at a price-to-earnings ratio of just nine.

From a crisis perspective, short-term problems such as economic instability that cause many to focus on high-value debt, rather than long-term savings, can stifle income generation, income and returns. However, since I am a long-term investor, this is not a major concern of mine at the moment.