Earning a second income on top of your main one is a dream worth chasing. The problem is, many of us don’t have the time or energy. Luckily, there’s a straightforward way of earning that income passively.

How? By investing in a spread of FTSE 100 and FTSE 250 shares. It’s not totally without effort. If you’re a beginner, you might have to set up an online Stocks and Shares ISA. Although, that’s pretty straightforward, with some ID and a debit card. 

You then have the job of picking the shares. At The Twelfth Magpie, we can help you with that. We’re constantly highlighting growth and dividend stocks to consider. Once you’ve picked the companies, they do all the work.

How to get dividends for life

You get growth if your chosen shares rise value and a second income from dividends. These are the regular cash payouts that companies pay from profits, to reward loyal shareholders. You typically get them two or four times a year, so the money rolls steadily along.

Better still, companies aim to increase them every year, so that their value keeps up with inflation and in many cases, beats it.

I’ve chosen an income target of £12,547 a year. That’s equal to the full new State Pension. You have to make 35 years of National Insurance contributions to qualify for that. I don’t call that passive.

When targeting income, the key figure is the yield. That’s the annual divided per share, divided by the share price.

The average yield across the FTSE 100 is 3.3%. With careful stock picking, you could potentially lift yours to 5% or even more. In that case, you’d need £250,940 in your ISA to get £12,547 a year.

Obviously, you have to earn the money to start buying stocks, but thereafter it rolls up even when you’re asleep.

Let’s say you start by investing £150 a month. Then increase that by 3% every year, and keep going for 30 years. Ultimately, you’d have £296,864, smashing my capital target. You’d have paid £85,636 from your own pocket. Compounded growth and interest would have supplied the other £211,228. Passively.

NatWest shares are worth considering

One FTSE 100 stock I rate right now is NatWest Group (LSE: NWG). It has a trailing yield of 4.97%, and the shares have been flying. They’re up 233% over five years. With dividends reinvested, the total return must be closer to 260%.

Banking stocks have been boosted by high interest rates, which allow them to widen profit margins. Savings rates and mortgage demand have held up despite our patchy economy. NatWest’s profits have been rising nicely. In 2025, they totalled £7.7bn.

Dividends are rising nicely too. NatWest shares are forecast to yield 5.28% next year, rising to 5.82% in 2027.

Growth and dividends aren’t guaranteed, and every stock has risks. The bumpy UK economy could hit NatWest’s revenues. There’s pressure for a bigger banking windfall tax at the next budget. High street banks are under pressure from smaller ‘challenger banks’. But I think NatWest stock is well worth considering, as part of a balanced portfolio of income-producing FTSE shares.

Should you invest £5,000 in NatWest Group Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if NatWest Group Plc made the list?

Harvey Jones owns shares in NatWest.