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There are around 2,000 Millionaire ISA shares and shares in the UK, with an average jackpot of around £1.4 million. That’s £2.8bn stashed away where the IRS can’t get their hands on it.
Do you want to try to join the ISA millionaires club? An investor starting today and investing the full annual allocation of £20,000 and earning an ISA return of 7% per annum, could do so in approximately 22 years.
So someone who is forty years old today, with not a penny saved yet, could be a millionaire at state retirement age. It means being able to maximize your ISA allocation. But, according to government data, 37% of ISA Shares and Shares investors do exactly that.
And anyone who can invest just £5k per year could still retire with a tasty quarter million tax free in their ISA.
Please note that tax treatment depends on each client’s individual circumstances and may be subject to change in the future. The content of this article is provided for informational purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and obtaining professional advice before making any investment decisions.
What are they buying?
What are the most successful UK stock investors buying? If you think the millionaire’s secret is finding get-rich-quick people, you couldn’t be much further from the truth.
No, these billion-pound portfolios are heavily skewed towards blue-chip companies. FTSE 100 companies and investment companies.
Interactive Investor is the latest to publish its list of top ISA investments. And while many investors shun them, ISA millionaires are buying more shares in the financial sector. Lloyds Banking Group is in the top ten, along with insurers fan and legal and general.
Looking back at last year’s data from Hargreaves Lansdownall three were in their top 10. Lloyds and Aviva entered into aj bell‘s top 10, meanwhile, with Legal & General losing.
cheap stocks
All of these stocks have low P/E valuations. That suggests ISA millionaires are happy to buy depressed stocks when others panic and sell. They also generate cash over the long term and pay progressive dividends.
In addition to cheap financial stocks, our millionaires constantly buy stocks like Shell, PA, National Network, GSK… all favorites among low-risk, long-term investors. It sounds like the most successful ISA owners might be getting their ideas from billionaire investor Warren Buffett, right?
Investment trusts
Mutual funds are also big favorites. And those are very good ways to get good diversification from a single investment. Looking at the two most popular among the Interactive Investor ISA millionaires is interesting.
Alliance Trust is one, and it puts its money in global stocks to target capital appreciation and dividend income. By the way, it has increased its dividend for 55 years in a row.
Scottish Mortgage Investment Fund is the other great favourite. And that it invests in global growth stocks, mainly US… things like Amazon, tesla, Modern. And ISA millionaires are buying them now that they are down.
learn from the best
I believe the best way to achieve long-term gains from a Stocks and Stocks ISA is to learn from those who have been most successful at it.
And for investors who want to target a million as quickly as possible, there’s still a little over a month left to make the most of their 2022-23 ISA allocation.
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