Earning a second income is one of the best ways to work towards financial independence. And the stock market is a terrific place to look for opportunities.

Regular investing can be a powerful strategy. With enough time, it doesn’t take huge sums to build a portfolio that can generate big returns.

What can you get for £4.50?

Apparently, £4.50 is roughly the average price of a pint in a central London JD Wetherspoon. That’s the world we live in.

You can look at that one of two ways. From a glass-half-full perspective, that’s a lot cheaper than the competition right now.

From a glass-half-empty perspective, it’s going up. But while Wetherspoon’s tries to hold prices down, increases seem inevitable.

Another option is to invest that money in the stock market. And if you stick at it long enough, the beers might pay for themselves.

How much can you make?

The UK is a great place for passive income investors. Low valuations mean high dividend yields and these can bring big returns.

It’s not hard to see why. A business offering an 8.5% return with good long-term prospects is a valuable asset for anyone to own. 

Don’t believe me? Investing the equivalent of £4.50 a day – or £136.88 a month – at 8.5% for a long time can bring some big returns. 

After 10 years of reinvesting dividends, it returns £1,542 a year. And by 2056, that figure reaches £18,071 – or £1,505 a month.

Where can you get 8.5%?

It’s fair to say that 8.5% opportunities don’t grow on trees. But NewRiver REIT (LSE:NRR) is a rare case.

The big question is whether or not this is going to be durable. High yields are often a sign that investors are worried about something.

In NewRiver’s case, the biggest risk is probably its debt. That’s a familiar situation for real estate investment trusts (REITs), but it’s a real issue.

The firm made a big acquisition in 2024 and its balance sheet still shows the impact. But the firm has a good strategy for dealing with this.

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Smart management

NewRiver has been selling off some of its assets to bring its loan-to-value ratio down. And it has a particular strategy for doing this.

Cuckoo Bridge in Dumfries is one example. NewRiver sold the retail park for £26.5m, which represents an initial yield of 6.9% for the buyer.

That sounds good. But it’s going to be hard to generate future growth — NewRiver already brought in tenants on long-term deals.

Given this, it actually looks like a good sale. And the proceeds are being used to bring down the firm’s debt and reduce the overall risk.

Income seeking

I’m prepared to bet £4.50 won’t buy a pint in a central London Wetherspoon 30 years from now. But I also think an 8.5% annual return will stay ahead of inflation.

I think NewRiver’s dividend yield makes the stock an interesting proposition. Especially for investors looking for a second income.

It’s often better to invest monthly or quarterly, rather than daily, to keep transaction fees down. But the best time to start is sooner, rather than later.

Stephen Wright owns shares in JD Wetherspoon.