Helping you Make Tax Free Wealth using ISAs & SIPPs

For a limited time only, ISACO Ltd. specialist Paul Sutherland is offering a free financial review and a copy of Stephen Sutherland’s book (retail value £19.97) about ISA trend investing to the next 10 people to register their interest. Call me on 07989 452101 and I’ll tell you what to do to get your financial review, glossy and detailed ISA guide and a copy of Stephen book – GRATIS! …Sam

So, you want to retire rich and be financially secure for you and your loved ones. Once you’ve made a decision to become wealthy, your mind will start asking the question, “How?”

This article will leave your mind fired up with ideas and inspiration about the amazing possibilities you’re going to be open to when you understand the power of a simple and powerful way to make as much “tax free” wealth as you decide and precisely how to do that.

Imagine being able to rest assured you have enough liquid cash to be able to live your dream lifestlye and never have to worry about money again. Now that would be a special time in your life…

Have you heard yet about “ISA Trend Investing”? If not, let’s start with the basic ideas and simplified concepts which can catapult you in to the world of tax free wealth…

Put simply, ISA Trend Investing is a way for you to capitalise on your TAX FREE investment allowance the UK government gives everyone each year through the ISA wrapper.

What is an ISA?

In other words, what goes in to your ISA and any gains made through investments using that ISA as a tax free wrapper does not get taxed for the duration it stays in the ISA. You can add to any ISA you open in a given tax year any time during that year. Once the tax year closes, you can open another ISA.

You probably know already about cash ISA’s which are the one’s often offered by high street banks with returns like “2-3%” if you do not withdraw in a year or some other terms and conditions. You may have also heard of “stocks and shares ISA” which allows you to be able to invest in stocks and shares using your ISA.

This simply means you are using your ISA as a “wrapper” to invest in stocks and shares. This protects any money invested (and hence any gains to your ISA value) from the tax man. You can invest in individual stocks (requires a great deal of professional skill to be consistently profitable); you can invest in investment funds (pooled and professionally managed funds which will invest in a normally diverse portfolio of different stocks – we have plenty of articles on investment funds here at UKInvestors.org).

Let’s stay focused on investment funds for a moment. It is likely that your high street bank offers a stocks and shares ISA range of products whereby you can choose from a (very) limited selection of funds in which to put your hard-earned ISA money. This route is not what we do as serious investors, however, we’re not qualified to advise you and of course you are welcome to see your advisor at your bank and talk about what funds they run or buy in to.

The other way you can invest your ISA money in stocks and shares via the investment fund route is in the “funds supermarket.” This means opening an ISA with (or transferring your ISA to) a company such as Fidelity International or Hargreaves Lansdown and deciding for yourself from a far broader range of funds that are available around the world. It’s about choices and this frees up your choice considerably.

If you visit a website like http://www.morningstar.co.uk and click on “ISA funds” you can perform all kinds of searches about the ISA fund performances of a multitude of funds available to invest in. Want some info that will put your greed glands in to hyperactive? Some of these funds can return as much as 50% or even 80% in a single year! That means if you invest £10,000 in to your ISA this year and buy a fund which performs well for that year (50% or 80% gain in the collective stock portfolio of the fund) and sell out of the fund at the end of the year, your money becomes £15,000 or £18,000 respectively. This is a powerful way to get very rich over time…

But we know funds can go down as well as up because the stock market moves in both direction. So the question arises, how can I maximise the potential of these funds? The simple answer is to get in to the fund when the stock market is going up (bull market) and get out when the stock market is going down (bear market).

Now this is not easy to do as a DIY investor but it is possible. There are some rules that must be followed in order to increase the probability or likelihood of you choosing the best fund for your money and timing the market like a professional. There is also a system that needs to be followed and you must commit to becoming a full time stock market professional if you really want to get the results you are aiming for- and that could mean huge sacrifices for you.

Some rules you might need to follow (this may challenge some of your existing beliefs, so I ask you to keep an open mind and just trust I know what I’m talking about here from years of experience and contacts who are stock market professionals):

1. You become an active investor. You don’t just “buy and hold” stocks/funds. You attempt to time the market by buying at high probability of the market continuing a move upwards and selling when the market warns that a downtrend may have started. This means you catch not all, but a substantive amount of an upmove.
2. Of course, you will be using your full ISA allowance as a “stocks and shares” component. You will no longer be using a cash ISA. You will be investing in stocks and shares, and so you will be using what is called a stocks and shares ISA not a cash ISA. There is one cap to the amount of ISA money you can invest each year. You can either split it between a cash ISA and a stocks and shares ISA or just invest all the allowance (or a part of it depending on how much you decide to sock away!) in to stocks and shares ISA which you will do for the purpose of ISA trend investing when you see how much money you can make…
3. You will research investment fund performances using a number of criteria with the objective of finding the best possible fund which will give your ISA the best gains during the markets upmove in to which you are looking to buy.
4. Market timing is employed to buy your investment. You will need to understand money and order flows, how the stock market works, possibly how it relates to other markets (such as commodities and forex) and financial instruments, technical and fundamental analysis and how to “read the market” like a professional.
5. You will have a timing system for exiting your “trades.” Your trades are not stock trades per se. Really, you are buying and selling in to and out of investment funds- it is the fund manager and their team of professionals who are responsible for the stocks held in the fund. Buying and selling in and out of a fund is known as “switching” or “placing a switch.”
6. An objective of you employing your strategy is to outperform the world’s leading stock indices (in particular the NASDAQ because it has a track record of high performance in bull markets) so that you are “beating the market.” If you are not doing this, you may as well invest in an ETF (exchange traded fund) such as the QQQQQ which tracks the NASDAQ and enjoy the same performance as the NASDAQ. If you’re going to go to all this trouble and commitment, you must be beating the NASDAQ on a consistent basis year in and year out for it to be worth it.
7. Based on the fact you are going to be the stock market professional in all this, you will not be using your advisor any more. Put simply, you are going to NEED to be more qualified in real terms that your advisor in terms of managing your money and investments.

Here’s the good news though. If you do not wish to take the DIY route, it is possible for you to follow a professional investor who spends all their full time hours in front of the charts, doing all the research, not only in to what is the best fund to invest in and should I be invested right now, but also, detailing where the money is flowing, how the stocks within the fund are performing and many other analsyses which have enabled this professional investor (and their team) to get consistent returns over an 8 year period.

Would you like to “shadow invest” and by following what the professional traders are doing on a day by day basis get the same results as them if you choose to do what they are doing? The amazing thing is it can take under 5 minutes per day to do this. Want to find out more? If you’ve got this far, I’d like to honour your enthusiasm and commitment by sending you an ISA investment guide worth £97. You can then get more information on ISA Trend Investing and the powerful concept I’ve just described which is “shadow investing”. All you need to do is sign up in the form below and I’ll send you instructions to your email on how to get the £97 value guide for FREE. Sign up below.

If you have any questions about ISA trend investing or anything else, do give me (Sam) a call on 07989 452101 and I’d be delighted to help you.

We just explored some of the ways ISA trend investing works. ISA trend investing is presented as the best financial investing strategy. There are many reasons for this.

Firstly, you are creating tax free liquid wealth because you are using an ISA wrapper to invest in stocks and shares.

Secondly you are taking the volatility risk out of investing in individual stocks and shares by investing in an investment fund.

Thirdly, you are going to get the aggressive returns of a fund, as opposed to the limited returns of for example and index tracker (a fund that follows all the companies or a large selection of companies in an exchange without such discretion as a managed fund, such as the “QQQQ Exchange Traded Fund which tracks the Nasdaq”)

Fourthly you invest in an active way. In simple terms this means utilising information to get in to the best possible fund at the right time (timing the market entry) and getting out at the best possible time. That does not mean you will “get in at the bottom and out at the top.” That would be impossible, even for Warren Buffet.

What it does mean is that you will get in to a confirmed trend when the market is going up, and get out when that becomes a confirmed downtrend. This way you will take some of the profits of an upmove and avoid some of the losses of a downmove. In other words minimise the loss-impact of a downtrending market and maximise the profit-impact of an uptrending market on your ISA account.

There’s two ways of going about actually taking action and doing this. You can become a professional market reader and trader. This is possible but it won’t be possible without help. If you want help in how you should go about doing this, we have “Liquid Millionaire” the book available for you to order at half the price of Amazon. If you decide you want to do something called “Shadow Investing” which would mean you taking about three minutes per day to see what we are doing precisely and why, then you can become a “Shadow Investor” which would mean becoming a premium client.

This will enable you to have a personal consultant to help you get set up and a daily market update sent to your email each day showing you the exact thoughts on the market of our professional trade team who trade with their own ISA and SIPP money. You can choose to follow them to the letter. They don’t give advice. We’re not authorised to do that. However, what returns they get, you will get. Not only does this cut out the middle-man (your advisor) who may well not be as well qualified as you had thought, but it gives you the opportunity to literally follow the track record of a proven team of traders.

This second way is the “lazy man’s way to riches.” Each day, one of our professional trade team creates a report called, “the Daily Market Update.” In this report you will learn about the traders thoughts on the market action of the previous day, the performance of key indices, the volumes being traded, sector awareness in terms of money flows and any other relevant information. Moreover, you will receive the clear knowledge of whether the market is “healthy” or “unhealthy.” This is the first piece of crucial information you need.

The second piece of crucial information is, if the market is healthy, is which fund do I invest in. If the market has turned healthy that day, it’s your choice to go ahead and “switch” your ISA out of a “cash” or “parked” fund and in to the investment fund until you get a report which says our team are switching out. You will then get approximately equal to the returns that are made by the investors.

This may seem hard to believe or may be you are sceptical. Let me therefore show you some hard results, not only of the performance over the past eight years, alongside the performance of the NASDAQ, but also real client testimonials, to prove to you that this can work for you, too.

If you have any questions, or would like to take this further, or simply to have a financial review and understand how ISA trend investing can help you to achieve your financial goals, why not contact us via the mailform or give us a call.

If you read part 1 of this financial investing series, you probably can’t wait to hear about what ISA Trend investing is and how it can help you to create financial security for you and your loved ones. We have already established that the stock market can be a lucrative investment vehicle, given that the stock market has been in a long term uptrend and may be about to break out after a period of sideways movement over the last decade.

In utilising ISA trend investing as your financial investing strategy, you are not going to be simply investing in individual stocks and shares using an ISA, nor are you going to be leaving your money in a fund for the next ten years- at least that is unlikely if you want to make far greater than average returns.

In fact, we’re going to be leaving individual stocks entirely alone. They are simply too volatile and you will be concentrating your risk by doing this. So, we are going to concentrate on fund investing (aka mutual investing in investment funds). In ISA trend investing you aim to have your ISA money invested in a fund when the market is showing strength and you keep your ISA money on the sidelines (or in a “cash” fund) when the market is showing specific signs of weakness. In other words, ISA trend investing is active rather than passive investing.

Additionally, you do not use a cash ISA. You invest as close to the full amount each year as you can in a stocks and shares ISA only. When the trend of the market is deemed to have the aforementioned strength, you then buy the best possible fund that you can find by searching for funds that can be bought in to with a stocks and shares ISA. There are ways of finding funds that will almost definitely outperform the “index tracker” funds, so we do not tend to invest in trackers. Remember, you only use your ISA to buy your fund when the market is deemed as in an uptrend. You either sell out of your fund, or simply stay on the sidelines when otherwise.

Technical analysis (i.e. the use of charts) are used to aid market timing. The fund that gets bought must be bought not only when the market is healthy, but at the best possible time that gives you the maximum probability of success. Similarly, exits are timed to try to take the most out of the market. This helps you to get out of downtrending markets. As soon as a downtrending market gives confirmation signals that it is no longer “healthy” it is your signal to get out of the fund and leave your ISA money “parked” either in “ISA parking” or in an extremely low risk so-called “cash fund.”

Just to be clear on that, you don’t actually sell your ISA and convert it in to cash. You keep your money in the ISA wrapper, but you are switching the ISA in and out of a fund or funds. This is very straightforward and simple to do. It is the matter of a simple phone call to the holdings company or can even be done on the internet.

Doing this allows you to set goals that are more ambitious than if you were simply “buying and holding” in a fund. This is because you are making the most of “upmoves” and getting out as soon as possible that a “downmove” is happening. Your goal in this is to outperform the NASDAQ because the NASDAQ composites US stocks, and the US is considered the leading business economy. In addition, the long term returns the NASDAQ we can say from past results that the Nasdaq is able to provide an annualised return of about 25% over a ten year period.

So, let’s review some of the simplified points that make up “the best financial investing strategy”…

1) You will use investment funds – a vehicle whereby the “ordinary investor” can make substantial gains
2) You will be an active investor (not passive).This means you will be smart enough to get in to the right fund when the market is in a confirmed uptrend and out in to “cash parking” when the market is in a confirmed downtrend.
3) You will pick the best possible fund which has the highest probability of outperforming the market by the biggest percentage
4) You will use an ISA or SIPP to shield your capital from tax
5) The more you invest the full ISA amount of £7200 per adult in your household, the more your capital will grow because of compound interest

So, you’ve decided that one of the goals you are targeting is to make millions of pounds in tax free liquid capital (i.e. cold hard cash!). In which case, you may well enjoy what you are about read. What I’m about to tell you is the to-the-point and easy-to-understand answer to the question, “what is the best financial investing strategy?”

First though, let me give you an idea of who “the best financial investing strategy” is aimed at. If you’ve got this far in to reading, I believe I can safely say that one or more of the following apply to you. And that is why I’m going to help you.

= You are looking for a secure financial situation for when you retire
= You would like to upgrade the way that you live your life in terms of its prosperity
= You are someone who aspires to enjoy the good things in life, wealth, health and happiness
= You’d like to be able to travel more, visit places of interest and take holidays whenever you’d like
= Perhaps you have young ones in your family for whom you also desire a financially secure future
= You’d like to be able to quit working like a slave for a living and kick back and enjoy life sooner rather than later
= You have the dream of affording a big house in a financially prosperous area
= You’d like to give public schooling to your children (i.e. a private education in one of the top private schools in your area)
= You would love to feel the joy of making more money
= You desire to be a well-respected person in your community and your family
= You’d like to be the owner of more than one piece of property

With that out the way, please allow me to introduce you to possibly the greatest opportunity of the present day. If you make the decision to leverage this financial investing strategy, it could mean that you end up with millions of pounds in tax free cash. And I’m about to show you just how that is possible on this website.

In 1980, after the stock market had been trading sideways for about ten years, it made a breakout which caused gains of 3470% over the subsequent two decades. In fact, if during the last decade, the trend had continued in this way, the NASDAQ would be trading at 8433 and not 2652.

That means that right now, you are staring at an opportunity that may well rival the property market buying opportunity that took place in the early nineties. You should know that between the last half of the 90’s to mid-way through the naughties, the prices of property on the market rose by a whopping 215%. No one needs to tell you that fortunes were available to be made. Smart property investors knew that to buy houses at 1984’s prices in 1994 was a golden opportunity to invest.

These smart investors knew as well as any smart stock market trader that the long-term trend is upward and that forms the basis of a smart financial investing strategy. Over time, the market is going upwards, in the long term. And therefore, the probability was that the market would make a shift to the upside.

You see, it’s a fact, that, like housing market, the stock market is in a long-term uptrend. Have a look below if you are sceptical. I have printed a chart from yahoo finance to show you the last 70 years of stock market action. The stock market over the last ten years has made very little in the way of progress. This means we could at any time soon be at the start of a big move.

In the next part of this series of articles entitled, “what is the best financial investing strategy?” I will introduce you to the concept of ISA Trend investing. This is your key to making millions in tax free cash leveraging the awesome investing power of the stock market, compounding and tax free investment wrappers.

Great question. The stock market can be risky in the short term because the market can be very volatile and swing in either direction. That means if you put your money into the market, one month or even one year later, the value on your investment may have gone down.

Using this same example, if you didn’t know how the stock market worked and you had lost value on your investment in a short space of time, you may decide to draw out your money taking a loss and swear never to invest in the stock market again.

Therefore many people do get their fingers burnt because they don’t look at the market as a long-term investment. They also don’t know when to enter or exit the market.

The stock market is something where you must invest your money and then keep it in for a minimum of at least ten years. This is a golden rule you must obey if you want to be financially successful.

The key is to look at the market as a very long-term investment vehicle. We suggest that you look at locking in your cash for at least twenty years and after seeing how money grows over time, I’m sure you’ll understand why.

One other reason why we suggest a very long term view, is because of risk. If you take a look at the charts below, you’ll see what percentage risk you have of losing money in the stock market with different time periods.

An historical analysis of UK shares shows that the longer they were held, the greater the likelihood that positive returns would result. For example, between 1969 and 2000, shares provided positive returns in 75% of the one-year holding periods.
When holding periods were extended to ten years or more, positive returns were realised 100% of the time. Shares are represented by the total returns of the Financial Times All Share Index, for the period 1969–2000.
Let’s quickly summarise these three graphs. If you tie up your money for one year, you have a 25% chance of losses. If you tie it up for five years, you have an 11% chance of losses, but if you tie it up for ten years or more, you have a 0% chance of losing money.

That means that if you can leave it invested for a minimum of ten years, you have absolutely zero risk of loss! If you can leave your money invested for a minimum of ten years, you have absolutely zero risk of loss!
I believe there are stock markets all over the world. Is the growth potential of every stock market the same?
No, and all markets will have different past performances. As you will soon see, both the US and the UK stock markets have, over time, continued in an upward trend, continually growing. Of course there have been periods where the markets have corrected (gone down) for sometimes one or two years, but this is normal action.

The great news is that the markets are always in an up-trend. That means that if you leave your money in the market over the long term, you are virtually guaranteed of excellent growth on your money.

The key part to realise here is that after every market correction, the market eventually goes higher and has always eventually moved into new higher ground.
Why does it keep going higher and will it ever stop?
Before I tell you why it keeps on going higher and higher, first take a look at these two charts of the growth of the US and the UK stock markets over the last thirty years. (See the two below graphs)

Source: Courtesy of Global Financial Data

Source: Courtesy of Global Financial Data

You can clearly see that the markets just keep going higher and higher.
Now take a look at the next chart that highlights two major correction periods in the UK markets. These were times when people were saying the world was coming to an end just as they were between 2000 to 2002.

The above figure shows clearly that these short-term fluctuations eventually iron themselves out and share prices eventually rise after a fall. These drops may seem serious in the short term but looked back on after a few years they can turn out to be insignificant blips.

The reason the stock market keeps going higher is that our world is continually getting better and better. It is a fiercely competitive world that we live in and new exciting and dynamic products and services are being created and developed all the time.

This will always continue to happen and people will continually need to buy products and services just to survive. For example, we will always need food, drink, clothing and shelter to survive.

Some people in the world will want more than survival, and desire either to sustain or even upgrade their lifestyles.

People will continue to buy from established companies’ products and services as well as purchasing products and services from new and dynamic companies.
Companies will make profits on the goods and services they sell.

Investors will always want to buy shares in both well-established, deemed safer, companies and new hot growth companies and so stocks prices will continually rise.

The strongest, most innovative companies will survive. The dinosaurs that don’t move with the times will die. New companies will replace them. Competition is becoming stronger in each industry every single year.
So let me repeat this key point. The stock market will always continue to rise higher and higher. It will have brief periods when it will correct but it will never stop going higher and higher.

What exactly is the stock market?
The stock market is an actual physical location (or computerised system) for the organised buying and selling of stocks, (stocks meaning a share or part ownership in companies).
Why is the stock market “The” place to invest?
Before I answer your question, let’s start with the basics. A share or stock represents ownership or equity in a company. Stocks or shares of companies are bought and sold at a stock market.

When you buy stock, you become a shareholder in the company whose stock you have bought. A shareholder may benefit from the company’s growth through an increase in the stock’s price.

It’s a fact that stocks grow money much better than gilts, bonds or any building society account as you will see in the next three charts.

Take a look at the chart below that shows how equities (stocks) outperform gilts and treasury bills over a 40-year period from 31 Dec 1962–31 Dec 2001.

You can see that stocks are the clear winner. Just £100.00 invested for 40 years without any further additions would have been worth £1,192. That’s a whopping 1,092% growth!
Why so much growth?
It’s because of the combination of two powerful forces. One is the stock market and the other is compounding.
The graph below shows how equities outperformed bonds and cash over a 15-year period.

The above shows equities versus a building society account compared over a 10-year period (Courtesy of Lipper’s Hindsight)

This is a key point because when we work on your plan, you will be using an estimated return of 12% per year growth just to be conservative.

However, in the next chapter you will see that there are investments linked to the stock market that consistently outperform the market, which means every year they beat the stock markets returns.

So instead of getting your money to grow at just 3% to 4% per year from a bank or building society account, by choosing investment vehicles that are linked to the stock market but manage to consistently outperform it, you’ll see that you can grow your money at 15%, 20% and even 30% or more, per year!

There really is no limit on how much you can grow your money per year using the stock market as its main growth vehicle. The only limits are those that are placed by your own mind.

Once again, stocks come out the clear winner.

It’s a fact that over time, stocks have outperformed all other types of investment and common stocks have been the only group to consistently outpace inflation.

Let’s take a look at what percentage return you can expect from putting your money into stocks. The table below shows percentage returns of stocks in the UK stock market over three separate time periods.

You can see that if you had invested in stocks over the last 50 years, you would have made a return each year of 13.6%.

But what If I can’t afford to invest any money? What if it all gets spent on day-to-day stuff?
We will help you find the money. You will learn dozens of ways of how to FAST TRACK your plan on this website.

Let me tell you a story about a family of smokers to illustrate how we all have the money.
Every morning for a period of time, Stephen would take our dog Spike for a walk. At the same time each day, he would often see a family who were chain smokers.

We assumed that each of them would smoke on average one packet of twenty cigarettes in a day because every time he saw them they always seemed to have a cigarette in their mouths.

So let’s do some figures:

If the family decided to give up and they knew how to invest that money wisely then they could first save the following:

One packet per day costs £4.20 x 7 days = £29.40 spent per week on cigarettes.
There were four people in the family so £29.40 per person per week on cigarettes x 4 people = £117.60 spent by the whole family per week.

If we multiply this by 52 weeks for the full year (£117.60 x 52) it equals £6,115.20 spent on cigarettes in a year.

Then divide this by 12 (12 months).

The family could be investing £509.60 per month instead of spending it on cigarettes.
Guess what happens if the family invested this money over 30 years and it grew at different rates of return like 10%, 15%, 20%, 25%, 30%.

At 10% the money grows to £1,059,607.57. (Over one million pounds!)
At 15% the money grows to £2,869,950.20
At 20% the money grows to £7,988,617.77.
At 25% the money grows to £22,316,208.56.
At 30% the money grows to £61,713,439.21.

Did you get that? Sixty one million pounds if it grew at 30%!
The family would be millionaires if they just got 10%.

This is why Stephen and I have a strong belief that anyone in a free country can become financially independent in a lifetime, if they intelligently use the incredible power of compounding.

Now do you believe me when we say “Everybody has the money”?
It’s simply the choices we make about what we do with it that count.

Let’s now review what you have learned over the last few Investing For Beginners lessons.

Summary of key points learned:

Compounding is: interest paid on a sum and its accumulated interest.

Financial independence starts with saving a single pound coin a day.

The value you place on every pound is critical to your success in becoming financially independent.

A good rule of thumb is: always pay yourself first then pay the bills second.

The Billionaire Duke of Westminster once said: “Look after the pennies and the pounds will take care of themselves.”

We know that compounding works with three key factors.

1) Time – Long-term perspective (the longer the better).
2) Discipline – Having the discipline to stick to your plan.
3) Money – A set amount of allocated money every day, week, month or year in accordance with your financial independence goal.

Even Albert Einstein described compounding as “The eighth wonder of the world.” He also said “It’s one of the most powerful forces in our society.”

Money doubles every five years at a growth rate of 15% a year.

How you can leave a legacy – Invest as little as £5,000 pounds as soon as your child is born in an investment which grows at 15% a year for sixty-five years and you’ll have over 40 million pounds.

The risk of delaying your plan to attain “Financial Independence” could be disastrous as in the example of Simon Smart & Phil Foolish.

Everybody has the money. It’s the choices we make about what we do with it that count.

This concludes the lessons on investing for beginners. We suggest that if you are new to investing and wish to continue your learning, that you start with our articles on the stock market.

What would happen if I decide to delay saving a percentage of my income immediately?
The risk of not saving a percentage of your income is very high because as you can see below time works with us or it can work against us.

If you don’t start immediately it means you’ll have to invest more money or invest in a higher risk investment vehicle to achieve your goal of financial independence.
So we suggest you start today!

That’s right, if there is one action you must take from this book it is to start saving a percentage of your net income immediately or it can be fatal, as you will see in the next two examples.

Start saving a percentage of your net income immediately or it could be fatal

Example 1
Simon Smart is twenty-three years old and is planning to be financially independent by the age of 55 (32-year plan). If he decided to invest £150 a month for a period of thirty years in an investment that grows at 15% each year, after thirty two years his money would be worth over £1.1 million pounds. (£1,121,380.18) – see below

Example 2
Phil Foolish was also advised to start investing when he was twenty-three but he didn’t take the advice. Now he is ten years older than Simon, which makes Phil thirty-three years old. He’s delayed saving for the first ten years but Phil is confident that even though he wasted ten years, he can still accumulate the same amount as Simon (£1,121,380.18) in twenty two years.
Why then is Phil Foolish so confident and why did he continue to put off his financial plan?
The answer is that Phil can afford to invest double the amount that Simon Smart is investing. Phil can invest £300 per month in the same investment as Simon and that grows once again at 15% per year.
And what is the reason why Phil is called Phil Foolish?
After twenty years growing at 15%, his money would only be worth £534,871.84
(see the below graph)

How can this be?
You can see again that time does play a big factor and even though Phil invested double the amount of money that Simon did, Phil still falls short by a whopping £586,508.30.

Let’s say that you were going to invest £50.00 per month over a thirty-year period.
If the money grew at a rate of 15% per year, every year, the money would grow into £281,588.52.
But if you decided to wait ten years to invest for whatever reason, investing the same £50.00 per month for twenty years, the money would grow into only £66,353.67.
That’s a massive £215,234.85 you would have missed by waiting ten years.
That means if you were investing just £50.00 a month, every single day you put things off, it would cost you £58.96 per day or £413.91 per week of future income.
Could you live with the thought that every day you will be losing out on future income?
Can you really afford to do that?
As you can see, delaying starting your financial plan is not a wise decision.
Its interesting also to note from this example that in a thirty year plan of £50.00 per month growing at 15%, your money, after twenty years, would be worth £66,353.67.

Check this out…

However, after 30 years it would be worth £281,588.52. That means that in the final 10 years it grows by £215,234.85.

Look…

Many people don’t realise that money really starts to grow at massive rates in the final years of their plan. The financial trap that most people fall into is that they spend all the money when it has only been growing for a few years.
They fail to realise that by leaving it, it would eventually become a huge amount as long as it was invested wisely.

Many people don’t realise that money really starts to grow at massive rates in the final years of their plan.

In Investing for beginners VII we introduced the idea of compounding and how the growth of your capital can become exponential over time.

Let’s look at the tables below, to demonstrate how money grows at 5%, 10% 15%, 20% & 30% a year, so we can see clearly what is possible in your lifetime using compound interest.

coming soon…

By looking at all the tables, we hope you can see clearly that if you were to save, let’s say for example £50 a month every month over a period of 30 years, your money would grow at different rates depending on how much you could get it to grow.

Let’s look at how £50.00 per month grows at different rates of return over time. I have highlighted these amounts in blue on the compounding tables.

At 5% over 30 years £50.00 per month would grow into £40,934.89

At 10% over 30 years £50.00 per month would grow into a tidy £103,964.64

At 15% over 30 years £50.00 per month would grow into a very respectable £281,588.52

At 20% over 30 years £50.00 per month would grow into a magnificent £783,812.58

At 30% over 30 years £50.00 per month would grow into a whopping £6,055,086.26!

As you can see this is the reason why we suggest you must start your savings plan today!

If you now know its time for you to take control of your finances, we acknowledge you and we want to help you reach your dreams. Sign up below to our newsletter for real quick information and what to do next…