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Becoming an ISA Millionaire

Honest reporting on shorter-term trading activity and ideas
1nvest
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Re: Becoming an ISA Millionaire

#460198

Postby 1nvest » November 22nd, 2021, 10:20 pm

Lootman wrote:Last week my ISA (briefly) passed the £1,000,000 mark. This caused me to look back at this topic from almost exactly 5 years ago where I noted that my ISA at that time was worth half a million.

Given that contributions since then have been £100,000 (5 times £20,000) that assumes an uplift in value of £400,000 due to gains and dividends.

Overall this is not a stellar investment performance. But what it does tell me is that it does not have to be. A fairly mundane investment return can still get you there as long as you contribute as much as you can every year, avoid making withdrawals, and let time do the rest.

Now just hoping that the rules don't change on me.

Congratulations. However as many more surpass that milestone I suspect changing the rules will become increasingly more likely. In 2018 estimates suggest there were around 500 ISA millionaires across three or four of the major providers, once at 5,000 to 10,000 is when I suspect former Budget statements as "ISA dividends continue to remain exempt" may at first see ISA dividends become taxable, only capital gains being exempted. Perhaps followed by exit/withdrawal tax rule changes or maximum values only being exempted (first £250K/whatever - i.e. 10K state pension plus 10K from ISA income, 20K combined being seen as 'generally fair enough').

yorkshirelad1
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Re: Becoming an ISA Millionaire

#460263

Postby yorkshirelad1 » November 23rd, 2021, 10:13 am

Having made as much use as possible of PEPs, Single Company PEPs, TOISA, TESSAs, demutualisation shares (which you could transfer into an ISA becuase some were received for a cost of £0 so didn't affect the annual subscripton limit) and ISAs, it seems me & Ms YL have ISAs (currently held at HL) totalling £6m. A fair chunk of that success is due to a very early suggestion for a certain scottish investment trust (that is well discussed on these hallowed lemony pages), and quietly squirreling away annual allowances (which presupposes the cash is available to do so) each year and leaving it to compound.

I do remember seeing a recent press article (e.g. https://citywire.co.uk/funds-insider/news/the-secrets-of-the-isa-millionaires/a1470332 and others) by HL trumpeting how they had a number of ISA millionaires. I slightly resent being used as a statistic for them to plump up their own image, and more to the point, drawing attention to the number of ISA millionaires, as low-hanging fruit for desperate Chancellors. After all, only rich people have ISAs... (never mind that long-forgotten encouragement of getting people to save by the likes of Nigel Lawson, who started PEPs when he was Chancellor).

I suspect in a few years time it'll be how many £10m ISA holders there are.

To answer the OP: quietly, steadily, patiently would be my advice. Personally, I like boring too, but everything these days has to be sexy, sensationalist, head-line grabbing, Top 10 lists, but I prefer to leave that to others. I'm a tortoise.

Dod101
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Re: Becoming an ISA Millionaire

#460289

Postby Dod101 » November 23rd, 2021, 12:01 pm

A lot of course depends on whether you withdraw or reinvest the dividends. I have been extracting almost all of my dividends since the beginning but even so am getting very close to a million but so what? After a certain level it is best to keep the numbers down and give it to others when they need it rather than wait until the government has extracted IHT from it and anyway, after a while you begin to lose the housing NRB.

For me this discussion is on the wrong Board because I have certainly not been 'Trading my way to a million'

Dod

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Re: Becoming an ISA Millionaire

#460291

Postby Midsmartin » November 23rd, 2021, 12:24 pm

The number of people with ISAs worth more than £1m will be higher than the figures in that article as it's perfectly possible to have ISAs with multiple providers.. as long as your total contributions are within the limits of course.

AleisterCrowley
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Re: Becoming an ISA Millionaire

#460297

Postby AleisterCrowley » November 23rd, 2021, 12:41 pm

Well I'm nowhere near.
I spent a lot of money on booze, birds and fast cars. The rest I just squandered
(George Best)

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Re: Becoming an ISA Millionaire

#460601

Postby BT63 » November 24th, 2021, 4:01 pm

Midsmartin wrote:The number of people with ISAs worth more than £1m will be higher than the figures in that article as it's perfectly possible to have ISAs with multiple providers.. as long as your total contributions are within the limits of course.


It would be risky to hold such a large amount with one provider.

I spread my investments across several providers to stay below compensation limits and to limit the amount of money which might become trapped due to an unexpected problem.
In the latter case, when my Legal & General investments transferred to Fidelity a few weeks ago, Fidelity didn't like something about it even though I have been with both companies for over 20 years.
As a result, Fidelity have locked my account pending further investigations and paperwork, so all that was with L&G and all that I hold with Fidelity is locked down at the moment.
Unfortunately for Fidelity, due to my account being locked, it meant that this year's ISA contribution and more ended up going to Aviva instead. I also have investment accounts with M&G and HSBC, plus I still hold significant quantities of shares in certificated form along with other assets outside of the broker/banking system.

Midsmartin
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Re: Becoming an ISA Millionaire

#460630

Postby Midsmartin » November 24th, 2021, 5:26 pm

Thanks for this prod to move some funds. I have too much in interactive investor after the eqi merger. Frankly I'm a bit scared of what might go wrong trying to transfer part of it!


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