Making a Million Using Stocks and Shares ISAs - Part 2 of 26
By Stephen Sutherland, author of Liquid Millionaire.Posted in the Category of ISAS, Investing, Investment Fund, Wealth Building on 29th January, 2010.
Tags: isa, isa investment, isa trend investing, liquid millionaire, million.
Over the last few months, I’ve been writing an ISA Trend Investing Guide that shows you how you could make a million using ISAs.
Over the next few weeks /months, I’ll be giving you an exclusive sneak preview before the main newspapers get their hands on it because I suspect that some time in the future, you’ll be seeing a copy inside your favourite weekend broadsheet.
In my previous blog I introduced how ISAs are one of the UK’s best-kept secrets. Today I’ll be continuing with content from the guide’s introduction and illustrate how much tax you will save by investing through an ISA.
How much tax will you save?
Interest from savings:
If you pay tax at the basic rate, outside an ISA you would usually pay 20 per cent tax (2009-2010) on your savings interest.
If you pay tax at the higher rate, outside an ISA you would usually pay tax at 40 per cent on your savings interest.
If you pay the ‘saving rate’ of tax for savings, outside an ISA you would pay tax at 10 per cent on your savings interest
For example, let’s imagine a pair of twins who earn identical amounts of money each and every year.
Twin number 1 decides to invest in individual stocks (not using an ISA) and twin number 2 decides to invest in investment funds using his ISA to protect all the gains.
Each year, each twin makes a gain of +10% on their portfolio. Twin number 1, who invests through the stock market, has to pay tax on his gain and because he’s a high rate tax-payer, his gain is reduced to just 6%.
Twin number 2, on the other hand, keeps all his 10% gain because his gain is “totally” protected through investing using an ISA.
Look at what happens to their trading accounts over various periods of time, assuming that both were investing £1700 each and every month. By the way, this is the equivalent of the maximum that a couple could invest using an ISA (Tax-Free wrapper) as from April 6th 2010 onwards.
As you can see, the end results are remarkably different.
Are you ready to learn more about how ISAs could make you a million – or even more?
I thought so.
Find Out More
If you would like to find out more about how you can make a million pounds through using an ISA and help make you a liquid millionaire then please contact a member of my team for a chat. 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.
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