LandlordInvest: IFISA investors can earn £409,060 in interest
Investors can use the Innovative Finance ISA (IFISA) to earn £409,060 in interest alone, according to a new analysis by LandlordInvest.
The peer-to-peer property lender used a recent blog post to highlight the long-term benefits of IFISA investing.
It calculated that when investors add the maximum amount of £20,000 to an IFISA account and reinvest the interest, compound interest can stack up. Using LandlordInvest’s own average annual rate of 10.76 per cent, investors can earn £13,338 in interest within just five years.
Read more: LandlordInvest reports revenue boost in 2022
Over a 10-year horizon, IFISA investors can earn £35,572 in interest. This rises to £134,415 over 20 years and £409,060 across 30 years.
Consistent IFISA investors who put the full £20,000 into the tax-wrapper every year will have a portfolio valued at over £1m within 30 years.
“Investors who take a long view stand to reap disproportionately more rewards than those with shorter horizons,” explained LandlordInvest.
Read more: How to invest in an IFISA with less than £1,000
“Many readers will be aware that Warren Buffet attributes his wealth to compound interest…or of Albert Einstein referring to compound interest as ‘the eighth wonder of the world’.”
LandlordInvest pointed out that the tax-free nature of the ISA wrapper means that there are no deductions made for capital gains tax or any other type of tax. This means that all money earned within an IFISA account can be kept.
Read more: LandlordInvest finds IFISA returns 6 times more than cash ISA