How to become an ISA millionaire

While many ‘normal’ folk have worried about finances during the pandemic, the rich have, in the main, got richer. According to Oxfam, the world’s 10 richest billionaires have collectively seen their wealth grow by $540^ billion over last year. But in some of the areas hit hardest by lockdown, billionaires saw their fortunes shrink. For example, a UK billionaire in the fashion and retail industry, saw their wealth drop from $8.1 billion in February to $2.4 billion by the end of June*.

“In September 2020, Jeff Bezos could have paid all 876,000 Amazon employees a $105,000 bonus and still have been as wealthy as he was before the pandemic.”
— Power, Profits and the Pandemic by Oxfam International

Investing towards the first million

While adding the title ‘billionaire’ to our resume is out of the question for many, becoming a millionaire might be more attainable.

The latest global wealth report from Credit Suisse shows there are 51.9 million millionaires* (measured in US dollars) worldwide. 39%* of those individuals live in the United States, followed by China 11%*, Japan 6%* and United Kingdom 5%*.

So, could you or I become one of them? The simple answer is ‘yes’.

Data from the Association of Investment Companies (AIC) shows that investing the full ISA allowance annually from 1999 to 2020 and reinvesting the dividends into Scottish Mortgage Investment Trust would have returned more than ten times the original investment: a staggering £2,541,100.**

Elite Rated funds that could have made you a millionaire

Now, I don’t know many (if any) millennials who are maxing out their ISA allowance each year, but even smaller regular investments over the long term could get us to millionaire status.

Since I don’t have a crystal ball to tell you which investments will make ISA millionaires in the next twenty years (I wish!), I thought I would take a closer look which Elite Rated products could have made you a millionaire in the last twenty, by investing £600 a month – roughly one third of a £20,000 annual salary.

So, it is possible – and that’s in just over 20 years. I’d still be under 50 years of age.

To help increase your chances of becoming a millionaire, it is important to get started as soon as you can. This will give your investment the chance to make the most of compounding and grow over time. Just think how many more investments could make you a millionaire over 25 or 30 years.

^Source: The Inequality Virus: Bringing together a world torn apart by coronavirus through a fair, just and sustainable economy, Oxfam, 25 Jan 2021
*Source: The Global wealth report 2020, Credit Suisse
**Source: 28 Investment Companies would have made ISA investors millionaires, AIC, 22 Feb 2021
^^Source: FE Analytics, total returns in sterling, 31 Jan 2001 to 29 Jan 2021