Invest with ISAs and Turn Your First Million into £75 Million - Part 2 of 2
By Stephen Sutherland, author of Liquid Millionaire.Posted 17th July, 2009.
Tags: isa, isa trend investing, retire rich, tax-free millionaire.
Investing with ISAs and How You Could Turn Your First Million into £75 Million
In Part 1 of this series I shared with you a formula for becoming a tax-free millionaire through ISA Trend Investing. Today I want to show you how, if you acquire the skill of getting your money to grow at 20% – which of course is not going to be easy, but it is possible – your first million could end up turning into a £75 million pound fortune – or even more.
How is this possible?
By making it a goal to become a centenarian (a person who is 100 or over), and using the 7% Withdrawal Formula with ISA Trend Investing, it could help to make you worth a staggering £75 million.
How to Become Richer Each and Every Year
You and your partner set a goal to make £1 million pounds by the time you are 60, using ISAs.
After reaching your target, you then set up an automatic 7% withdrawal which in turn would help to fund your lifestyle. Now, if you master the skill of growing your money at 20% per year, your large chunk of capital, after your lifestyle costs have been taken out, will continue to grow at approximately 11.6% every year.
To put it another way, you become richer each year. Because you and your partner accumulated £1 million pounds, you would then withdraw £70,000 (7% of £1 million) to pay for your lifestyle. Your million would drop to £930,000 and then grow at a rate of 20%. At the end of the year, you would have £1,116,000. This means that even though you have taken money out to pay for your lifestyle, your original £1 million pounds has grown by 11.6%.
The following year’s 7% of cash flow would be £78,120. This equates to an 11.6% increase from the previous year’s living expenses. As you can see, the great thing is that if you follow the 7% formula and manage to get your money to grow at 20% each year, your main lump sum gets bigger, making you richer each year and your lifestyle even better.
And if we stick with this example, you can clearly see what happens as you get older:
At age 70, you’d have £195,000 cash flow to pay for your lifestyle and a tax-free fortune of £2.79 million.
At age 80, you would have £584,000 cash flow and a tax-free fortune of £8.35 million.
At age 90, you’d have £1.75 million cash flow and a tax-free fortune of £25 million.
And if you managed to hit the magic 100 mark, you would have £5.25 million cash flow and a tax-free fortune of £75 million pounds.
The Power of Compound Interest
What you have just seen is the power of compound interest going to work on your behalf. It is mind boggling, isn’t it? The thing that most people say at this point is something along the lines of:-
“But even if I did make it to 100, I would be too old to enjoy it.”
And I reply…Nonsense.
You see, I have a strong belief that human beings, if we wanted to, could live far longer lives – if only we decided to learn how. I have a conviction that I will live until I am at least 100…and I’m not joking. I will share with you why I have this concrete belief in a future article.
Until then, if you have any questions about how it is possible to turn £1 million into £75 million with ISA Trend Investing please do not hesitate to contact a member of my team for a chat. As always you have my word there will be no sales, no jargon, just the facts.
Your friend,
Stephen Sutherland
The UK’s Leading Authority in ISA Trend Investing and Author of Liquid Millionaire
Please Note: As always, let me remind you that I am not a financial adviser and therefore not authorised to give advice on what investments to buy or sell.
We endeavour to deliver quality information, ideas and personal opinions on stocks, funds and the general market. However, the information, ideas and personal opinions provided are intended to be a general guide to financial management only. Our products are intended to be a general guide to financial management. ISACO Limited and its employees are not agents, brokers, stockbrokers, broker dealers or registered financial advisors. ISACO Limited do not accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in its products. ISACO Limited does not recommend particular stocks or investment funds or any other security or any other investment of any kind. If particular stocks or investment funds are mentioned, they are mentioned only for illustrative and educational purposes. Whilst ISACO Limited comments on the services and advice offered by other companies and individuals, none of the companies or individuals have authorised, sponsored, endorsed or approved this publication. ISACO Limited has not received any remuneration in return for including any company or product featured in our products. You should seek advice from a registered financial professional prior to implementing any investment program or financial plan. ISACO Limited, their agents and employees, do not guarantee any results or investment returns based on the information in this program. Past performance is no indication or guarantee of future results and the value of any investment you make can go down as well as up. The products present information and opinions believed to be reliable, but the accuracy cannot be guaranteed and ISACO Limited is not responsible for any errors or omissions. ISACO Limited accept no liability for such inaccurate or incomplete information.
Note: All articles are copyrighted. Reprinting in any form without permission is not permitted. To request reprint permission for one or more articles, please contact Stephen.
