A Stocks and Shares ISA is a terrific way for investors to try to get rich and retire early. It allows individuals to get exposure to lucrative UK share markets, entities that tend to deliver an average annual return as high as 10% to long-term investors. To put the cherry on top, such ISAa shield you and I from the greedy mitts of the taxman too.
I use every opportunity I have to invest in my Stocks and Shares ISA. With a maximum yearly allowance of £20,000 it fits my needs perfectly. And it meets the investing requirements of the vast majority of Britons too. It’s why the number of people using these tax wrappers to buy UK shares has ballooned in recent years.
Market confidence remains pretty weak right now. And it could continue to do so as Covid-19 infection rates keep rising, while political uncertainty in the US and a bumpy Brexit process rattle investor nerves too. But those brave enough to buy UK shares despite the tough macroeconomic backcloth could make a fortune further down the line.
They could even become one of those legendary Stocks and Shares ISA millionaires.
How to make a million
As I mentioned above, investors in UK shares can expect to make an average annual return of up to 10%. This figure applies to those who buy stocks with a view to holding them for, say, a decade or more. Under a weaker scenario, they tend to make a yearly return of 8%. This means that they can anticipate making a fat wad of cash from their savings.
Let’s say that you have £5,000 to spend in a Stocks and Shares ISA at the beginning of your investing journey. And you can plough £300 a month into it thereafter. Based on those rates of return, you can realistically anticipate having made at least £660,000 after 34 years. At the higher end, you’re likely to have cooked up a whopping £1.05m. You’d have become one of those famed ISA millionaires.
Getting rich with Stocks and Shares ISAs
These huge sums are what we can expect to make under normal conditions. And here’s the good news for those who are buying UK shares today. Those who invest in their ISAs after a stock market crash like that of early 2020 can expect to make even more stunning returns.
This is because they can buy top-quality stocks at the bottom of the market, and then watch them explode in value as economic conditions improve, corporate profits bounce back, and market confidence gradually recovers. It’s the reason I’ve continued to invest in my own Stocks and Shares ISA despite the macroeconomic meltdown. And it’s how the lion’s share of those ISA millionaires have made their fortunes.
There are stacks of top UK shares like this that are trading at rock-bottom prices. And The Motley Fool, with its extensive catalogue of free and exclusive reports, can help you dig these out. So do some research and get investing in a Stocks and Shares ISA today.
Royston Wild 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.