Is it possible to become a millionaire (or near to) through investments?

kidmugsy

A friend of mine astonished me by saying that his Final Salary pension was worth £1.5M for LTA purposes - which means that it is worth far more in reality. Mind you, he had a happy promotion late in his career.

Eco_Miser

Is it possible to become a millionaire (or near to) through investments?
Yes, but it involves either saving a large fraction of a million into the investment, or waiting a long time, see jamesd's post above for figures the cheapest example saves £64,800 over 54 years, the quickest saves £384000 over 16 years.

Mr.Generous

Don't spend all your life scrimping for a target, spend some money enjoying yourself. I am nowhere near a £m in assets, but I have great holidays, a nice car and a couple of houses. I also gave both my kids decent cash deposits for their first homes. Should I have saved it all and now be a millionaire?

atush

There are plenty of isa millionaires, and pension pot millionaires.

The key is to invest every month/year, for many years. And to reinvest income.

Look up compounding.

Pincher

It's the Dr. Evil inflation thing. In one decade, a million is a lot,
forty years later, you are living in a million pound house.


For lots of people, you just have a forty year career, and voila, you can sell the house, and there's a million. No capital gains tax either, because it's your principal private residence.


Just try selling a Buy-To-Let property, with £600k of capital gains after 20 years. You THOUGHT you had a million, dream on. George Osborne is waiting for his cut.

Plus

Once upon a time, millionaires used to be oligarchs and plutocrats. Now they're just people who happen to live in the right bit of London. Billionaires are the new millionaires.

jamesd

Mr.Generous wrote: »

Don't spend all your life scrimping for a target, spend some money enjoying yourself. I am nowhere near a £m in assets, but I have great holidays, a nice car and a couple of houses. I also gave both my kids decent cash deposits for their first homes. Should I have saved it all and now be a millionaire?

Maybe not, but I'll be able to retire at 55 or sooner if i want to. Or now if I had to. How does being able to retire 12 or more years before state pension age look? Not with the full million, you don't need that much to have plenty of income, unless you're used to and want to maintain high levels of spending.

I haven't been scrimping. I was used to living on low incomes so I just had relatively modest spending habits and have only increased that spending by a relatively low amount - hence that investing of 60%, means I'm only spending 40% or less of my potential spending, at least before tax.

bowlhead99

Pincher wrote: »

Just try selling a Buy-To-Let property, with £600k of capital gains after 20 years. You THOUGHT you had a million, dream on. George Osborne is waiting for his cut.

Well yes, so you don't sell it - you can still take the income from it, and if you need wodges of cash you can borrow against it. Keep it until you die, no CGT on death - just the normal inheritance taxes that anyone with that level of cash or investments would pay.

It's a bit like Apple - billions of overseas cash profits that they don't want to repatriate to the US to give to their investors because of having to pay US tax on them; so they just borrow and give that money to their investors instead.

In other words, if you want to behave like a millionaire you can, even if you technically owe a bunch of tax if you were to cash out.

Aretnap

http://www.scotsman.com/news/elderly-scots-millionairess-leaves-1m-to-charity-1-3382990

Glen_Clark

Pincher wrote: »

.........£600k of capital gains after 20 years. You THOUGHT you had a million, dream on. George Osborne is waiting for his cut.

Gideon (alias George) Osborne tells you to use 'clever financial products' to avoid paying tax .. http://www.theguardian.com/politics/video/2015/feb/16/george-osborne-tax-avoidance-2003-interview-hsbc-video