Dentists Who Invest

Is a common question that many ask when it comes to finance.⁣
The answer is MAYBE – but it depends on your objectives.⁣
If you are planning to trade/stock pick your account then maybe you CAN.⁣
But this requires immense skill AND the time to do it.⁣
If you’re time poor (as most of us are) then maybe this is not viable.⁣
Most people will be investing use a “Buy and Hold” strategy.⁣
In which case we want our portfolio to COMPOUND.⁣
Compounding is one of those things that we often struggle to appreciate fully.⁣
Compounding is the premise that certain things grow exponentially faster with time rather than linearly.⁣
If our portfolio doesn’t compound then we can never hope to retire.⁣
Therefore the MORE it compounds is the sooner we reach financial freedom.⁣
Therefore, IF you use your ISA for “passive income” then you are INHIBITING your portfolios ability to compound.⁣
Most would consider using the dividends of a stocks portfolio for these purposes.⁣
Typically dividends yields are 3-4% – if we use 10% as a good rough metric of what can be attained from a fully equities portfolio…⁣
Then its definitely worth looking at the effect on your eventual retirement pot using the graph below.⁣
So the answer to the question Can I Invest In My ISA For Passive Income? is this:⁣
YES – but it depends on your investing style and/or it may mean that our financial freedom date is not as soon as we’d like.⁣
Fun fact for the day.