The Motley Fool

How I’d invest to make a £1m in a Stocks and Shares ISA

Image source: Getty Images

Stocks and Shares ISA success doesn’t come for free. But it might be a lot cheaper than you think.

Whether you started at 20, just got going at 30, or still haven’t made your first purchase at 40, it doesn’t really matter.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

The only things you need are regular commitment and time.

Why? Well, over the course of 35 years, from 1984 to 2019, the FTSE 100 returned an average 7.75% per year.

Take your time

Promises of immediate riches at zero risk are confined to scams designed to cheat you out of your money. You will have to take some risk: you do have to invest money to make money.

But if you invest over a long enough time frame, you can certainly reduce your risk and keep more of your money.

Investing the same amount in a Stocks and Shares ISA every month does two things.

Firstly, it allows you to ‘pound-cost average’. This means you take advantage of cheaper prices when the market is down and smooths out your returns over time. It also makes sure you don’t just buy in a lump sum when the stock market could be well overvalued.

Secondly, it builds up compound gains. The longer you can keep investing, the more compound interest works in your favour.

For example, say you start with a healthy £10,000 lump sum. Buy a single FTSE 100 tracker and let it sit in your Stocks and Shares ISA. If you add nothing to this £10,000 over 35 years, you end up with £136,664, at the average 7.75% a year return.

But add £500 a month and that £136,664 suddenly turns into £1,154,996! Compound interest becomes exponentially more powerful the more we can add to our original stake over time.

Sticking with a lump sum is like powering an engine with coal. But adding extra money every month is like injecting it with rocket fuel!


Each scrap of cash you can put together in a Stocks and Shares ISA should be working to make you richer.

And history has shown us that investors make their most money over time from reinvesting dividends. Without this key fact, you lose the ability to take advantage of compounding.

At first, the impact from reinvesting dividends is quite small. Not much will happen for the first 10 to 15 years: a long time to see no huge growth! But after 15 years, your wealth really starts to motor.

Think of an exponential curve. It starts small, and increases slowly. Then suddenly it starts to increase rapidly, and shoots ever higher each year after that.

The additional impact every year from ever greater numbers starts to hit a critical mass at about year 18. If you can be patient and hold on, this is where you’ll make your £1m.

Stocks and Shares ISA success

The best thing about a Stocks and Shares ISA is that all your gains are tax-free. You don’t have to give the government a slice of your earnings from share price rises or dividends, and it will never cost you anything to take money out.

Following the simple principle of adding £500 a month and staying consistent over time. That’s how I plan to make £1m in my Stocks and Shares ISA, and I think you can too.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.