Ask us anything: How to get to £2 million using an ISA

0:01You know what I love, Damo? Things that save me time. You don't have YouTube Premium, mate, so I just don't believe that. Granted, I'll give you that one. However, I've got one for you. A great time saver in personal finance is Money Week magazine. They spend a lot of time distilling the biggest stories in personal finance down into consumable chunks, so you don't have to scroll and scroll. They give practical tips on savings, investments, pensions, the UK economy, the global economy. It's like your five a day, but for finance. If you want to give Money Week a try, you can get six issues in print and the app absolutely free by visiting moneyweek.com forward slash money.

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0:50We are back for season two of Making Money next Monday. We're so excited for what's in store and we're kicking off with a deep dive on what to put in your portfolio with personal finance YouTube royalty, Romin from Pension Craft. Thank you everyone who sent in your questions or giving us a review. We love hearing from you and we really do listen to what you're telling us about the podcast. So keep the messages coming in. Okay, Sian asks, do you broach friends, family when you see them making terrible financial decisions? Or do you pick them up on their terrible financial decisions? If I haven't advise them to make the terrible financial decision yes you are the terrible financial decision this is going to the moon guys invest in this two weeks later yes so it's on zero now sorry about that terrible financial decisions it's like you see someone getting a new car or whatever you could you could beat them over the head and be like oh that's a terrible financial decision but actually like you know let them do what they want what what gets me is i have people that are like, oh, watch your channel.

1:53And yeah, I really like what you do, blah, blah, blah. So yeah, I'm 100 % all in on a clean energy fund. And I'm like, what? How did you get that from what I said? Because it's the future, bro. Like that kind of stuff. Well, I might say, oh, you know, I don't agree. I've got one example. This is going to sound so privileged, I guess. My masseuse. yeah so I have a masseuse and this is all part of me living my life a little bit more 50 quid a month sorts me out I go see her and she talks to me and she's actually friends with my missus that's kind of how I got introduced and Jess was telling me that she she's in this thing called CashFX which is a well-known scam it's like a really well-known like yeah Ponzi scheme or whatever and Jess was like she wants to talk to you about it but she knows you'll disapprove and she just wants to believe that it's true that's what she said so I went along and I was like oh how you doing financially she's like oh yeah I'm in this really exciting like investment that's going really well and I knew that it was CashFX behind the scenes but I also knew that she just wanted to believe that it was real so I didn't really want to squash her dreams because she told my missus that she knew it was a scam but she just didn't care that she wanted it to be real so I said yeah be careful don't put all your money in that and she's never spoke about it again so I think it's all gone pretty badly but that's really my only real world example of seeing someone doing a really bad thing I said to you a few times actually when you called me about you said don't do that certain toke you said put eight grand into this and it's a sure thing I was like to me but just be careful yeah I did not heed your words

3:42Nick wrote to us, great work on the YouTube channel and the pod. You're so far ahead of what other people are doing in terms of UK finance. Clearly aimed at you that too. My question is for Damo. You said recently that enough money for you would be 2 million inside of a stocks and shares ISA. How quickly do you reckon you can get that 2 million in an ISA given the 20k allowance? Is the 2 million a target based on higher annual rates of return? Or is it just a general aim at maxing out your ISA allowance every year until you're 60? and that should come to about 2 million quid. The answer to this question is£1 ,666 a month at a 7 % return for 30 years is 2 million quid.

4:20Job done, next question. Done, next question. Bang, bosh. No, that's actually how you got me into the ISO. When I saw the returns and like how it compounds and yeah, just the more you put in and yeah, over different time periods, 10 years, 20 years, 30 years, it's very feasible, especially anyone in your 30s, even in your 40s, it's very achievable. I think maybe I need to caveat the like, because we were given like, what is enough? Maybe just 2 million pounds in investments would be a better answer. And that when I'm taught, I mentioned my ISA, but you'd also mentioned maybe a pension and the combination of the two.

4:58You could have a million in one, a million in the other. Because, you know, the thing about the 30 years, I'll give as an example, I'm using that because I'm 34. So you could start at 30, you could get to 60. you'd need to max out your ISA every year. 1 ,666 times 12, I believe is 20 grand. So that's where that comes from. Someone starting in their 20s could pay an even less. I've used 7 % because I think that's more of a realistic, you know, the average rate of return is actually higher than that. And even a 1 % difference in that would make it higher. I wanted to be conservative there because Nick asked about, am I forecasting higher rates of return?

5:34So I just want to show how it's doable and obviously with pensions and stuff as well you're paying money into your work-based pension they're doubling that and then that you're getting the return on the stock market so I honestly think with long enough time horizons if you're in your 30s or whatever two million quid at retirement across all of your accounts is is an achievable goal and the more you earn as you get older the more you'll pay in that one six six six doesn't need to come every month you could do it you know at a later point as well i started investing in my 20s with like 50 pound a month now i put in significantly more than that and he's already a millionaire just like that guys if you see him in the street asking for some money that's how you get there a beg borrow and steal you wait up full ice every single year no i did you know you just you just keep ramping it up and testing yourself and every year you you up you increase the amount if you go play on a dividend on a compound interest calculator and you put in the amount that you can afford now and then at the bottom it lets you adjust increase the amount that you put in each year by a percentage if you just say a percentage in your head that seems could you increase the amount by one percent a year and you'd be like yeah fine put that in and see what difference that makes to the figure overall i'm not saying everyone can sit here and max their isa but you're asking me specifically how i've got to that figure and that's how i got to that figure and i do max my isa on an annual basis but i didn't starting up that place i didn't start putting 1666 pound a month in i start you know i started with 50 pound a month one of my friends said to me the other day that he was watching the podcast with his partner and she was like turn it off turn it off this makes me depressed and he's like oh but we need to fix our finances she's like i don't want to think about our money and they just had a kid as well and they're like so i don't want to think about our money it's it's all stressful and i think that's money avoidance problem that's how a lot of people feel they're like oh i won't worry about it it's too scary I worry about my pension later I worry about that's how I was definitely I worry about my isolator and then you don't start but once you start and you like you said play around on the calculator you kind of when you're working towards something it's a lot easier but it's I think it's getting started that scares people the most.

7:43Next question Jordan has a question what was the worst stock you've ever invested in? Go on T. There have been a few and it was so bad that I've actually like, you know when you have trauma, I blocked the name from my memory, but it was an oil company. My friend's like, trust me, trust me, this oil company, they're going, it's really cheap now. And then price went to zero. I put a few grand there, price went to zero. But more recently, last year, I put some money into like a medical company and they were meant to produce all these new medicines and they went bankrupt. So those are my words too.

8:18I blocked them from my memory so I couldn't tell you the names and I don't want to remember. I don't ever want to think about them again. What about you, Damien? It's a company probably called Bidstack. I've spoken about it before. Basically, they've got a piece of software, or they claim to have, which can put ads inside of games. So, you know, like product placement inside of a movie, whereby they'll pay for a slot. Obviously, once that movie's shot, it's done. So if they put like a Lucas A bottle in the movie, they can't change that. What Bidstack claimed to be able to do is have a marketplace within games where they can change the adverts within the games.

8:55So you're playing Call of Duty one day and the billboards all have one advert on the next day. They all get changed to others. So it creates like an open marketplace for ads within games. So I was like kind of blown away by this like concept and thought that could be a really big market. But I put my money in and it went crazy and 10X'd in like a few weeks. And I was like, woohoo, I'm on here. And then it collapsed because I didn't take my money off the table and it never really recovered. They've got loads of bad management issues, I believe, and things like that. I kind of just exited it and moved on.

9:28But yeah, that's probably one of the worst. It's one of those where I fell victim to what I see loads of people doing all the time, which is they hear of a fancy technology and they think, oh, that sounds really good. So it must do really well. But, you know, an interesting technology and a business that makes money are two very different things. um ai is a prime example of that at the minute the amount of people that are just trying to grab anything to do with ai is like it it looks very bubbly and when you consider a lot of these businesses aren't making any money i mean chat gpt is burning cash i'm not saying it won't make money some someday but you know share prices tend to follow earnings over time so consider that before you invest in hype because what i did with bid stack was i invested in the hype of a technology.

10:14I didn't understand the business. What was it? Who was it? Was it Warren Buffett you said that said that it's hard to outperform the FTSE or outperform the... Yeah, direct quote that. Was it? No, that is definitely not what he said. Word for word. Basically, picking stocks, the chances of you outperforming the markets is very, very low. He said, get ready so you never have to be ready or whatever. Stay ready so you don't have to get ready. That's what he said. Stay ready so you don't have to get ready. That's how I live my life.

10:49What kind of topics do you want us to cover in season two of Making Money? Let us know at makingmoneyatkindling.media or message us on Instagram. Thank you again to everyone who supported us by leaving a review or subscribe to the YouTube channel. It makes a massive difference and we really appreciate it. See you next week. See you next week. This isn't advice. Whilst we discuss individual examples, we can't give you personal financial advice. What we can do is offer a perspective and discuss the issues.