How I’d invest £77 a week in a Stocks & Shares ISA to aim for a million

There are an estimated 2,000 ISA millionaires in the UK today. Here’s how I’d invest £77 a week in a Stocks and Shares ISA to try and become one of them.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Long-term vs short-term investing concept on a staircase

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

A million pounds doesn’t go as far as it once did, but it’s still a very sizeable amount of money. And for a lot of folk, that figure still grips the imagination. Some investors, though, have already reached that millionaire milestone by investing in their Stocks and Shares ISA account.

In fact, there are an estimated 2,000 ISA millionaires in the UK today. Their average portfolio value stands at £1,412,000, as of June 2022, according to data from HMRC.

These are people who have invested their savings month after month, year after year, and built their pots up over time to reach that million figure. The key ingredients are consistency, time, and patience.

Here’s how I’d invest £77 a week in a Stocks and Shares ISA to get the ball rolling.

The maths

Firstly, here are the numbers to prove that aiming for a million is realistic, over the appropriate time frame.

Let’s assume I start with £12,500, as that is the amount it’s estimated the average person has in savings in the UK today. If I were to save and invest a further £77 a week, that works out at £333 a month. Investing £333 a month, it would take me 30 years to reach a figure of £1m.

This is assuming a 10% annual return, which is definitely achievable.

Compounding

Year Deposit Amount Accrued InterestBalance
0£12,500£12,500
1£3,996£1,497£17,993
5£3,996£13,872£46,352
10£3,996£49,591£102,051
20£3,996£252,050£344,470
30£3,996£868,329£1,000,709

The power of compound interest is astonishing. Even though Warren Buffett started investing at the age of 11, about 99.7% of his wealth was created after his 52nd birthday. No wonder Albert Einstein supposedly called compound interest the “the eighth wonder of the world”.

Indexing

When people say ‘the stock market’, they’re often talking about the S&P 500, which is the largest 500 companies listed in the US.

And that is where I’d start investing, because the S&P 500 has gained value in 40 of the past 50 years, generating an average annualised return of 9.4%.

I’d invest in the S&P 500 through a low-cost index fund, which tracks the performance of the index. It’s actually down 18% so far this year, so I intend to invest in the index myself soon.

Diversity

Beyond the index, I would look to build a diverse portfolio containing both dividend and growth stocks. For income, I’d start with the FTSE 100, as there are some very attractive high-yield stocks listed in the UK.

A few that stand out to me right now are National Grid, Legal & General, and Rio Tinto. These stocks currently have dividend yields of 5%, 7%, and 9%, respectively. I have been buying shares of the first two stocks recently, and continue to monitor Rio Tinto as that 9% dividend yield looks very appealing to me.

For income and growth, I like the look of British drinks giant Diageo and consumer data giant Experian. Again, these are stocks I have in my own ISA portfolio.

Of course, it goes without saying that all stocks carry varying degrees of risk. That’s why it’s so important to I keep my portfolio diversified.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ben McPoland has positions in Diageo, Experian, Legal & General Group, and NATIONAL GRID PLC ORD 12 204/473P. The Motley Fool UK has recommended Diageo and Experian. 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.

More on Investing Articles

Middle-aged black male working at home desk
Investing Articles

If an investor put £20k into the FTSE All-Share a decade ago, here’s what they’d have today!

On average, the FTSE All-Share has delivered a mid-single-digit annual return since 2014. What does the future hold for this…

Read more »

Hand of person putting wood cube block with word VALUE on wooden table
Investing Articles

One FTSE 100 stock I plan to buy hand over fist in 2025

With strong buy ratings and impressive growth, this FTSE 100 could soar in 2025. Here’s why Mark Hartley plans to…

Read more »

Investing For Beginners

If a savvy investor puts £700 a month into an ISA, here’s what they could have by 2030

With regular ISA contributions and a sound investment strategy, one can potentially build up a lot of money over the…

Read more »

artificial intelligence investing algorithms
Investing Articles

2 top FTSE investment trusts to consider for the artificial intelligence (AI) revolution

Thinking about getting more portfolio exposure to AI in 2025? Here's a pair of high-quality FTSE investment trusts to consider.

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

Do I need to know how Palantir’s tech works to consider buying the shares?

Warren Buffett doesn’t know how an iPhone works. So why should investors need to understand how the AI behind Palantir…

Read more »

artificial intelligence investing algorithms
Investing Articles

Can investors trust the National Grid dividend in 2025?

National Grid surprised investors this year with a dividend cut to help fund upgrades. Is this FTSE 100 stalwart still…

Read more »

Micro-Cap Shares

3 high-risk/high-reward penny stocks to consider buying for 2025

These three penny stocks are risky. But Edward Sheldon believes they have the potential to be excellent long-term investments.

Read more »

Investing Articles

If a 40-year-old put £500 a month in a Stocks & Shares ISA, here’s what they could have by retirement

Late to investing? Don't worry. Here's how a regular long-term investment in a Stocks and Shares ISA could generate huge…

Read more »