Forget Pokémon cards! Equity stocks are my top option for secondary income
Image source: Games Workshop plc
Investing in dividend stocks is just one way to earn a second income. There are all kinds of jobs you can do and businesses you can start to make extra money on top of your regular income.
Some of these can be really interesting possibilities. But in terms of requiring less work to get higher returns, it’s hard to beat the income of the powerful FTSE 100 companies.
Pokémon cards
One day, my friend showed me an app called Whatnot. As far as I know, there are plenty of people selling Pokémon cards – and they’re making pretty good money doing so.
What I saw was a high speed auction (literally 10 seconds) where people were selling individual cards and unopened packs. And the amount they were pulling was pretty amazing.
It looks really fun and easy and I can’t deny that I didn’t think of trying to do it myself. But there are a few things that stop me from stopping my surgery. One is that it looks very competitive. And the other thing is that all the buying, selling, packing, and shipping seems like it will take a lot of time and money to turn it into something valuable.
Net income
Investing in the stock market, in contrast, takes very little effort. Investors need to think carefully about which stocks to buy, but once they’ve done this, all that’s left for them to do is… watch.
Compared to the work involved in making a Pokémon card, that’s a huge help. It means that investors can go and work on another way to make money in the meantime. Or not.
Equally important is that investment costs have come down significantly. Investing £100 wasn’t really a viable strategy if it meant paying 10% of that in fees. That has changed though. Since trading fees are now very small on many platforms and almost zero on others, the amount of money needed to start investing is much lower than before.
Assignments
Pokémon is an amazing franchise – some cards sell for up to £500,000. But it is Warhammerowned by Games Workshop (LSE:GAW) – my biggest FTSE 100 investment.
The company produces small items that it sells in its stores, online and through third parties. This usually means higher margins, but intellectual property makes a difference.
Operating margins for 2025 were over 40%, very high. And with its many fixed costs, these may increase further if sales continue to grow.
Meanwhile, there is another big advantage. Low capital requirements mean that a company can return a large portion of the cash it generates to shareholders as dividends. That makes it incredibly attractive for both growth and earnings.
Second fundraising
Games Workshop’s high margins mean merchandise isn’t cheap. And this can be dangerous when consumer spending comes under pressure, which is the case in the US right now.
This is where the company is looking for significant growth over the next few years, so it’s something investors need to keep in mind. But from a long-term perspective, the business looks really strong.
There is good money in collecting, especially in franchises like Pokémon or Warhammer. But in my case, I think there is a more attractive opportunity in stocks than in products.
