ISA shares and shares can be a useful platform for a long -term investor.

While some people focus on the potential development of share prices, others operate their ISA to generate passive streams of income in the form of dividends.

The combination of these dividends can be very lucrative for a long -term investor.

Imagine, for example, that by reinvesting dividends in time, the investor can escalate the value of his ISA by about 906,000 pounds. It is possible – but how much would it require?

Three variables for long -term dividend income

The question of how much it would require, in insulation, is like the question of how long it is a piece of string.

There are three variables when it comes to forecasting how much ISA can generate through sophisticated dividends. Only one is how much it is invested. The next is the average dividend performance, and the third is a time frame.

For example, for example, 100,000 £ ISA met for 30 years with an average of 8% per year, would escalate by about 906 thousand. GBP.

The same result can be achieved for less money (but longer time) or shorter time (but more money).

Some bargain dividend shares in sale

Is 8% of the annual dividend performance possible? There is more than twice as much as electricity FTSE 100 Finally average.

I think it is so. Each well -constructed ISA is varied in various actions. But on some potential occasions on today’s market, I think that the average 8% performance is available.

One of the shares, I think that investors should consider their ISA, is the FTSE 100 financial services company M & G (LSE: MNG).

The demand for assets management is high and I expect that it will remain so in a long -term perspective. Thanks to the well -established brand, gigantic customer base and international operations, I believe that M&G has some powerful competitive benefits to act in this space.

M&G aims to maintain or escalate dividends to action annually. In recent years, it has developed in recent years, and the performance is currently 9.2%.

One of the problems is that politics owners withdrew more than recently adopted M&G funds in their main business. If this is continued, it is a risk of profits.

Choosing the right ISA

In my example above, I mentioned an investor from 100,000 pounds in ISA. But few investors have such a gigantic sum of lying inactivity. Annual ISA contribution add -ons mean that the construction of an ISA, which had 100,000 pounds for investing from scratch.

Despite this, the rules of the above approach persist. It would be possible to escalate 100,000 pounds to invest in ISA, bringing a standard limit of 20,000 pounds for each of the five tax years.

However, obtaining an appropriate complete return is not, however, about the careful selection of the action and the combination of dividends. ISA costs and fees can eat in return.

So a elementary first step for an experienced investor is a thorough comparison of the action and shares ISA when making decisions that best suits its own needs.