How To Become An ISA Millionaire

Matt | Personal Finance

Did you know there are 4,850 ISA millionaires in the UK, with accounts over £1 million? It’s not as hard as you might think to join this group!   This Short is the key highlights from my full video on my YouTube channel. I share top tips and explain how it’s possible to reach ISA millionaire status by investing in a Stocks & Shares ISA (Individual Savings Account).   #millionaire #isa #investing #stocks #stockmarket #saving #personalfinance #moneytips

Transcript

00:00currently you can save up to 20 000 pounds per year into your isa account and it would take you

00:0521 years to reach millionaire status if you were able to invest the maximum amount per year and

00:12based on an average annual rate of return of eight percent but being able to save 20 000 pounds each

00:18year is not very realistic unless you're earning a high salary if you're able to do this then great

00:24but don't be disheartened if you can't and you can only save smaller amounts let's look at an

00:28example of how you can still become an isa millionaire without ever maxing out your isa

00:34allowance each year if you were able to gradually increase the amount you save per month as you got

00:39older and as your income increased then an example of how you could get to 1 million pounds is by

00:45contributing and investing 200 pounds per month between the ages of 25 and 34 350 pounds per month

00:53between the ages of 35 and 44 550 pounds per month between 45 and 54 and 750 pounds per month between

01:0455 and 64. over that 40 year period you would have made one million pounds based on an average annual

01:10rate of return of eight percent now the more you can invest at an earlier age the less you'll need to

01:16invest later on to reach that one million pound savings goal as more of your wealth is generated

01:22by the market rather money that needs to be contributed by you and the final step step three

01:28is about investing with consistency rather than sitting on the sidelines trying to time when to buy

01:34at the perfect point as you can end up missing out on significant returns on your money looking back at data

01:40over the last 30 years if you had stayed fully invested in the s p 500 your compound annual growth

01:47rate would be around eight percent that means you would have made on average eight percent each year

01:52and at this rate your money typically doubles about every nine years but if you were waiting for the

01:58perfect moment to invest and instead kept your money in a bank account and as a consequence you missed

02:04the best five days out of those 30 years your returns dropped to 5.9 percent if you missed the

02:10best 10 market days your returns fall to 4.7 percent and if you missed the best 30 days your returns fall

02:17to just 1.1 percent so unless you're retiring soon and you need to preserve short-term wealth then if you

02:24can play the long game and invest riding the ups and downs in the market then you'll have a much better

02:29chance of growing your wealth one tip to help with consistency with your savings and investments is

02:35to set up a direct transfer each month once your pay comes in that way you always budget for and set

02:41aside an amount to save and invest each month

Category

Transcript

Recommended