Who wants to be an ISA millionaire? It may sound impossible, but thousands of ordinary investors have already done it. Now is a great time to start your quest, as the stock market crash has given you a huge choice of cheap FTSE 100 stocks to buy.
This is the perfect time to go on a shopping spree. Loads of top large-cap stocks are trading around 25% lower than before the Covid-19 crisis. Some are down by a third or more, yet still have strong long-term recovery prospects.
A great way to become an ISA millionaire is to go shopping when there are cheap FTSE 100 stocks everywhere you look. In these tricky times, I would focus on companies with strong balance sheets, loyal customers, generous cash flows, and low levels of debt.
I’d buy cheap FTSE 100 stocks today
This is an uncertain time. We still do not know how long we must wait before the coronavirus lockdown is lifted. Even then, we won’t know how much damage it has caused to the economy.
You could wait until the picture becomes clearer and everybody is feeling optimistic again. However, if you do that, the big stock market gains will already have been made. You will have lost this exciting opportunity to buy cheap FTSE 100 stocks. Your chances of becoming an ISA millionaire will have taken a knock.
That is why I would buy bargain shares today, ahead of the stock market recovery. We have seen in recent weeks how quickly things pick up when investors believe the worst is over. You do not want to miss out on the next stage of the rebound.
Some investors have piled into gold, but I would be cautious. It now trades at just above $1,700 an ounce, and looks stretched at that price. Gold does not pay any income; you are purely speculating on capital gains. The price may fall once the worst of Covid-19 is over.
Here’s how I’d become an ISA millionaire
Others may have noticed that crypto-currency Bitcoin has just crept above $8,000. All I can say is, so what? The price bobs up and down all the time. Movements are purely driven by sentiment, as Bitcoin has no practical use. It’s a gamble, basically. You are far more likely to lose money than make it.
So don’t hide in gold or gamble with Bitcoin. If you want to be a tax-free millionaire, I would urge building a balanced portfolio of cheap FTSE 100 stocks inside a Stocks and Shares ISA.
Be patient, and your wealth will grow, year after year. If you keep investing your maximum annual amount and reinvested dividends for growth, you can ultimately achieve your goal of becoming an ISA millionaire.
Now is the ideal time to get started, by loading up on cheap FTSE 100 stocks.
Harvey Jones has no position in any of the shares mentioned. 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.