Starting a Stocks and Shares ISA in 2025 could make me a millionaire. Here’s how!

Christopher Ruane outlines a couple of steps he plans to take in the coming year to boost his long-term Stocks and Shares ISA prospects.

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Lots of people have a Stocks and Shares ISA. Not that many of them become millionaires from it (although some do).

Going about things in the right way in 2025 and beyond could help me aim for a million. Here are two things I plan to do to help me on my way to that goal.

Maximising contributions

To give myself the best chance as I aim for a million, I will try to maximise my contributions.

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Each tax year brings a new allowance for a standard Stocks and Shares ISA of £20k.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

But every investor is different. So, even if I do not have a spare £20k to invest, I will still seek to maximise my contributions by putting as much into my ISA on a regular basis as my personal financial circumstances allow.

I also want my money to work as hard for me as it can. That will involve trying to make the best possible investment choices. But it is also important to try and minimise the impact of fees, charges, and commissions along the way.

So, my approach is to take time to review different Stocks and Shares ISAs on the market and choose the one that looks best for my own financial circumstances and objectives.

One final way I maximise my contributions is by reinvesting any dividends I earn along the way rather than taking them out of the ISA as cash.

Buy into brilliant companies to hold for the long term

If I could invest £20k a year and compound the value of my Stocks and Shares ISA at 10% annually, I ought to hit my million pound target after 18 years.

So, aiming high in terms of my ISA contributions next year and sticking to that habit over the long term could be lucrative.

As for a 10% goal, it may not sound very difficult (some FTSE 100 shares currently yield that amount or very close to it), but in fact as a compound annual return over the course of 18 years I think it is actually fairly challenging. After all, there are good years in the market but there are bad years too.

So, I would focus carefully on buying into a diversified range of what I think are brilliant companies, when their share price is attractive.

Putting the theory into practice

As an example of a share I am holding that I hope can help me achieve this goal, I would point to Legal & General (LSE: LGEN).

The market for financial services is huge and I expect it to remain that way. Thanks to the large sums of money involved, it can be highly profitable.

That is the case for Legal & General. It has been consistently profitable in recent years. Its retirement-focussed business model has also been highly cash generative, supporting a generous dividend. The yield stands at 8.8% currently. The company hinted this week that it may also increase its spending on share buybacks.

Created with Highcharts 11.4.3Legal & General Group Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

What actually happens in future remains to be seen. In 2025 and beyond I see a risk that market volatility could lead policyholders to withdraw funds, hurting profitability.

But as a long-term holder, I have no plans to sell my shares.

Should you invest £1,000 in Legal & General right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Legal & General made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

C Ruane has positions in Legal & General Group Plc. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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