Building a seven-figure investment portfolio is never going to be an easy task. It is likely to take a sustained amount of time and capital to achieve.
However, the task could be made easier through opening a Stocks and Shares ISA. Not only does it offer significant tax advantages when compared to a bog-standard share-dealing account, it is also a cost-effective product that may enhance your returns.
Furthermore, a Stocks and Shares ISA is a simple product to understand. Therefore, it is accessible for a range of investors who are looking to improve their financial futures through investing in the stock market.
Tax efficiency
Clearly, all taxes are subject to change. But at the present time, a Stocks and Shares ISA offers a significant amount of tax efficiency. Amounts invested through it are not subject to capital gains, dividend or income taxes.
While this may not sound like an especially great advantage to someone who is just starting to invest, over a long period of holding shares, it could be highly beneficial. It may mean that you do not forego a portion of profit or income to pay taxes, which could increase your chances of making a million.
Of course, there are other tax-efficient products available such as a SIPP. However, the fact that withdrawals can be made from a Stocks and Shares ISA without incurring any tax could make it a simpler means to budget in the long run.
Low costs
Tax efficiency does not come at a great cost for investors who use a Stocks and Shares ISA. Many share-dealing providers charge a modest management fee each year that could be as little as the equivalent cost of a buy or sell transaction.
This makes a Stocks and Shares ISA highly accessible to large and small investors alike. It means that opening a Stocks and Shares ISA at the very start of your investment journey is a realistic prospect, as unlike other products such as a SIPP, it will not make a significant negative impact on your net returns while your portfolio size is relatively modest.
Simplicity
A Stocks and Shares ISA is a simple product to understand. You can invest in a wide range of assets to build an investment portfolio, just as is the case with a standard share-dealing account, and that could lead to financial freedom in the long run.
History shows that the earlier you start to invest, the higher the return potential of your portfolio. With it being possible to open a Stocks and Shares ISA online in a matter of minutes, and funding it being an equally quick process, now could be the right time to focus your capital on the product. It may increase your chances of making a million in the long run.