Here's how I'd invest $20,000 in ASX 200 shares for a supercharged second income

As Aussie investors, we have a large selection of ASX 200 dividend shares to potentially deliver a much desired second income.

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Looking to invest in S&P/ASX 200 Index (ASX: XJO) shares to secure a second income?

In the new era of high inflation, ever-higher interest rates, and lagging wage growth, you're not alone.

Fortunately, as Aussie investors, we have a large selection of ASX 200 dividend shares to potentially deliver that much-desired passive income stream.

And with Australia's rather unique franking system, the dividend payouts you receive can come with some helpful tax benefits.

With that said, here's how I'd invest $20,000 in ASX 200 shares for a supercharged second income.

What I'd look for in ASX 200 dividend shares

First, in building my passive income stream, I'd likely restrict myself to ASX 200 shares.

Sure, there are some high-yielding small-cap stocks. And some of them may well continue to deliver big dividend payouts. But there's no getting around the fact that investing in the smaller end of the market carries more risk.

Second, I'd spread my $20,000 across a number of different stocks (at least 10) involved in very different sectors. That kind of diversity will help reduce my risk of depending on one sector (or company) to perform well in order to bank my second income.

Third, I'd look for well-managed companies with a solid growth outlook, keeping in mind that a trailing yield is backwards looking. I want to do my best to invest my $20,000 in companies that will maintain or, ideally, increase that yield over time.

Now with that also said, here are three ASX 200 dividend shares I'd put at the top of my list for that supercharged second income.

Three stocks to consider for a second income

First up we have Pilbara Minerals Ltd (ASX: PLS).

The blue-chip lithium producer recently announced its inaugural dividend after reporting a 989% increase in half-year net profit after tax (NPAT) compared to the prior corresponding period. While the fully franked dividend of 11 cents per share was the company's first, I don't expect it to be the last.

The analysts at Goldman Sachs agree. Goldman forecasts Pilbara will pay a final dividend of some 20 cents per share. That would see a full-year payout of 31 cents per share, which works out to a trailing yield of 7.6% at yesterday's closing price.

Atop the dividend payouts, there's the potential for more capital growth as well.

As you can see in the chart below, the Pilbara Minerals share price has gained 53% over the past 12 months.

Created with Highcharts 11.4.3Pilbara Minerals PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

The second ASX 200 share I'd buy with part of that $20,000 is Westpac Banking Corp (ASX: WBC).

Westpac paid out a final, fully franked dividend of 64 cents per share on 20 December and an interim dividend of 61 cents per share on 24 June. At yesterday's closing price, that works out to a trailing yield of 5.6%.

And Goldman Sachs has a bullish outlook for the big bank's future payouts. Goldman forecasts Westpac will pay fully franked dividends of $1.47 per share in FY 2023 and $1.56 per share in FY 2024. That's a forecast yield of 6.6% for this financial year and 7% for the next.

The Westpac share price, shown below, is up 2% over the past 12 months.

Created with Highcharts 11.4.3Westpac Banking Corporation PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

Which brings us to the third ASX 200 share I'd buy for a supercharged second income, Coles Group Ltd (ASX: COL).

The supermarket giant recently reported a 17.1% year-on-year increase in its half-year NPAT, to $643 million. That saw management boost the fully franked, interim dividend by 9.1% to 36 cents per share.

Atop the 30-cent final dividend, paid out on 28 September, Coles trades on a trailing yield of 3.7%.

The Coles share price is up 3% over the past full year.

Created with Highcharts 11.4.3Coles Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

If I invested in each ASX 200 share equally, I'd earn a dividend yield of 5.6% (running with Goldman Sachs' estimate for Pilbara's final dividend payout).

If yields remain at this level (they may go higher or lower), that would earn me a passive income stream of $1,120 per year, along with the franking tax credits.

With a long-term, supercharged second income in mind, I would reinvest those dividends and let compounding interest work its magic over time.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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