Would you believe that there are already around 200 ISA millionaires in the UK?

Including the PEPs and TESSAs that preceded them, these tax-free investment vehicles have been in existence for 30 years now, with PEPs first introduced in the 1986 budget and the complementary TESSAs joining them in 1990.

It’s a fair guess that a good number of those ISA millionaires have been in it right from the start, transferred their PEPs and TESSAs to ISAs, and used their full allowances every year. And if that’s what can be achieved in 30 years, just imagine what heights you could reach over a full lifetime of investing!

What 30 years can bring

First, let’s think about what you might accumulate over the next 30 years and see if you could match these ISA millionaires. We’ll assume you’re able to use up your entire ISA allowance of £15,240 every year, investing it in 12 monthly installments of £1,270. How much would that bring in?

It all depends on the annual rate of return you can get, and if you stashed your savings in a cash ISA offering 2% annual interest (and a lot of them offer less than that), you’d finish your 30-year stretch with approximately £625,000 in the bag. Of that, £457,000 would be your own contributions with the remaining £168,000 coming from compound interest, and you might not think that’s too bad.

But what if you invest in shares instead, and reinvest any dividends you earn? An average annual return of 6% per year including dividends isn’t at all an unreasonable expectation (and I’d say it’s probably quite conservative). Some years you’d do better than that, others not as good, and some years you’d actually lose money — but with 30 years at your disposal, those short-term ups and downs will even-out and it’s the long-term average that counts.

With an average of 6% a year from shares, your ISA value would grow to around £1,244,000, easily getting you into the ISA millionaires club. What’s more, instead of the £168,000 in interest from a cash ISA, you’d be £787,000 in profit from share price appreciation and reinvested dividends!

A full life of investing

Now let’s extend our ‘what if?’ thinking a little further. It’s obviously unrealistic for the vast majority of us to use our full ISA allowance from the day we reach 18, so I’ll go with the following scenario…

Firstly, your parents start a Junior ISA for you when you’re born and invest the full £4,080 annual allowance, then when you reach 18 it converts to a standard ISA and you manage to invest £500 a month until you reach the age of 30. From then on, you use up your full allowance every year for the next 30 years. How much do you think you might have to celebrate your 60th birthday, assuming the same 6% return each year from shares? Go on, have a guess before you look down and find out…

Would you be surprised to learn that, through your ISA investments, you’d end up with a cool £3.35m, all tax free? The same plan, only invested in a 2% cash ISA, would fall short of the million pound target with a total of just £975,000.

Convinced yet?

The lesson is clear. If you want to reach millionaire status, invest as much of your annual ISA allowance as you can, start as early as you can — and put it in shares!

If you still don't believe you can make a million for yourself through investing in shares, don't just take my word for it. Get yourself a copy of The Motley Fool's 10 Steps To Making A Million In The Market report, which takes you through all you need to know, one step at a time.

What you'll learn, more than anything, is that the secret to long-term financial success is to spend less than you earn, invest your savings in shares, and perhaps most importantly of all... keep a cool head when all around are losing theirs.

What's more, it won't cost you a single penny of your savings to get yourself a copy, so just click here now for your completely free report!