As you may or may not know I have an ISA that I run alongside my standard investing account. I know plan to focus way more on my ISA and have already transferred at least 10% of my investing account over to my ISA and I plan to eventually move my entire standard account over into the ISA this is because I want to maximise the yearly ISA allowance so that I can avoid paying any tax on the capital gains of these investments. Just imagine if I had a mother company down the line like Argo but I invested say £2,000 and I make £40,000 but then have to pay capital gains tax on it, I’d be fuming. Therefore I am going to utilise the ISA especially considering that I won’t be able to use the entire £20,000 this remaining tax year across all of my ISA’s. At some point in the future if I’ve used up all my ISA allowance and there are some investment opportunities then I’d use the standard investment account.
What is my strategy with my ISA?
Ok, my strategy has two main components, the first is automated monthly investments into 10 specific stocks. The second is using free funds to invest in growth opportunities, and with the profits made from those investments, I reinvest some of it into the automated 10 stocks and some of it back into the free funds pile. This way I can snowball the impact of my strategy both for the automated investments and for the growth opportunities free funds.
The 10 stocks which receive automated investments are half dividend focused half growth focused. They are either REIT’s or ETF’s. They include areas such as, Clean energy, electric vehicles, emerging markets, automation and robotics, commercial real estate, residential real estate (students).
One of the companies I have automated investments in is Realty Income, their business is in residential and commercial real estate. They use the monthly rent payments to provide monthly dividends for share holders. This is a great way to invest in real estate without actually physically owning the real estate. Effectively you get 4.2% PA but it is paid monthly, so your money is compounded at 0.35% monthly. Most of the other companies and equities in my ‘automated investments’ either have a similar focus or look for diversified growth ETF’s.
The aim for the automated part of my ISA is to achieve numerous incomes from dividends (monthly and quarterly) around 5% PA and to be invested in diversified ETF’S for future disruptive industries.
The second aim is handpicking certain stocks for my ISA with the aim of attaining significant capital gains. There are certain methodologies and strategies I stick to, however the aim is to attain these significant gains and reinvest them back into the automated part of my ISA. I recently made an investment that increased by 2,000%, I didn’t invest a large amount of money, if I invested £1000, I would’ve made £20,000. Enough to fill up my ISA for the tax year. Over the years there will be more opportunities (maybe not as lucrative as 2,000%, but enough to make a long term difference) to increase the investments in my ISA.
I believe that taking this approach over a long period of time will be beneficial as I will receive the benefits of passive investing and active investing.
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