There are thousands of people in the UK who now have an ISA worth at least £1 million.

One thing they all have in common is that, at some point, they had an empty ISA account, before putting in some money and investing.

Maybe they weren’t aiming for the million on purpose – but they got there anyway!

With the annual ISA contribution deadline coming up this weekend, now seems like the perfect moment to think about how someone with a currently empty ISA could aim for a million.

More than one approach

Put 20 thousand pounds sterling now Before the deadline and then doing the same thing each tax year, compounding by 5% per year, the IAT will be worth £1m after 26 years.

A much stronger CAGR of 15% would shave a decade off this timeline, making it 16 years.

Meanwhile, what about the person who doesn’t have £20,000 a year to invest?

The same approach could still work, but depending on how much money is put into the Homeland Security Act, it would take more time.

Is this worth doing?

With a long enough time frame, even fairly modest amounts of money invested in the right way can yield very good results.

Set realistic goals

You might read that and think, “Well, obviously it makes more sense to aim for 15% compound annual gains and not 5% at that time“.

But that’s like deciding to run your first marathon and deciding that doing it in three hours would be better than doing it in five.

The truth is that high performance can be very difficult to achieve. Having unrealistic goals can lead an investor to destroy wealth rather than build it through poorly judged risks.

I think compound annual gains of 5% and 15% are achievable, at least for some investors.

Go to 5%

Take the example of 5%.

at present, FTSE 100 index Yield 3.1%. This alone could achieve more than three-fifths of the goal.

And with some growth in stock prices overall (although most internal audit benchmarks contain losers, not just winners), I see the 5% target as possible when we stick to a fairly broad range of proven, leading companies.

What about 15%?

To achieve a compound annual gain of 15% over 16 years, an investor will need to make some exceptionally good choices about which stocks to buy and hold.

The clarification is diploma (LSE: DPLM). Its stock price rose by 136% in five years. The last 16 years have seen the stock price achieve a CAGR of 25%.

And that’s before considering profits. Although only 1% today, someone who bought at a much lower price 16 years ago would now have a return of about 34%.

Why Has the diploma performed well in the long term?

It has a clear and proven strategy and business model. He focuses on areas where he can add value to customers.

Many of the products it distributes are of great interest to customers, giving it pricing power and helping it weather the economic cycle.

At its current price-to-earnings ratio of 45, the company is too expensive for my taste. Risks include slowing demand for aviation-related products, hurting revenues, as airlines need to reduce their budgets as jet fuel prices rise.

Other companies that seem cheaper to me now also have these characteristics…