Stop saving and start investing! My 3-step plan for a £1m ISA

first_imgStop saving and start investing! My 3-step plan for a £1m ISA See all posts by Rupert Hargreaves Our 6 ‘Best Buys Now’ Shares “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Rupert Hargreaves | Sunday, 14th June, 2020 It’s always a good idea to save money for a rainy day. However, it’s possible to save too much money, especially when interest rates are at rock-bottom levels, as they are today. As such, now could be a great time to start investing for the future. Doing so could help you dramatically increase the size of your financial nest egg over the long run. With that in mind, here’s my three-step plan to start investing today5G 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…Start investing with an ISAOpening a Stocks and Shares ISA account is a great place to start investing. The great thing about ISA accounts is that any income or capital gains earned on investments held inside these tax-efficient wrappers don’t attract additional tax liabilities. This could allow you to increase your nest egg faster over the long run, as you get to keep more of the money yourself. Most online stock brokers offer a Stocks and Shares ISA account, and they’re just as easy to open and operate as regular dealing accounts.The one big drawback of these accounts is an investor can only deposit £20,000 a year. However, if invested sensibly, this should be more than enough to hit £1m in the long run. Regular investingWith a Stocks and Shares ISA account in place, the next step to start investing is to set up a regular investment plan. A regular investment plan is one of the best ways to invest in the market, in my opinion.If you have a lump sum investment, buying stocks gradually on a monthly basis may make more sense than trying to dive in the market straight away. That’s because pound/cost averaging comes into play. This means an investor buys more of a fund when the market falls, and less when the market rises. As it’s impossible to time the market over the long term, this strategy means you don’t even have to try and is a great way to start investing. Buy the market When using a regular investment plan, buying the whole market within an index tracker fund could be the best approach. Buying single stocks can be a time-consuming and expensive process.Buying the market with an index tracker fund may not only be easier and cheaper, but it could lead to bigger returns over the long run. For example, over the past 35 years, the FTSE 100 has returned around 7% per annum. To replicate this return, all an investor would need to do is buy an FTSE 100 index tracker fund with a monthly investment plan. A monthly investment of £400 would be enough to build an ISA worth £1m within four decades. That’s why it could make a lot of sense to stop saving and start investing today.Even a few extra years of investing could produce big returns over the long term, thanks to the power of compound interest.  Image source: Getty Images center_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Rupert Hargreaves owns no share 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. 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. Enter Your Email Address Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his 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.last_img