£20K to put into a Stocks and Shares ISA? Here’s how I would aim to turn it into £250K!

Is it possible to turn a Stocks and Shares ISA into a long-term wealth creation machine?

I believe it is. In fact, if I had £20k and put it into an ISA now, I think I’d really aim to turn it into a portfolio worth a quarter of a million pounds over time.

Here is the way.

To begin, it is useful to lay down the basic principles.

I will take a long-term approach. As a serious investor, I believe it is possible to increase my ISA value by more than 12 times – but not in the short term.

Yes, I would be happy to have one assignment that does very well. But even the best business can run into unexpected difficulties (or unexpected problems, at least). So I would divide between five to 10 different stocks. I see £20K as sufficient for that purpose.

Fees and commissions can eat into my profits, so I would take the time in advance (now, in fact) to choose the right Stocks and Shares ISA for my financial circumstances and investment objectives.

A milestone towards a million

However, how can I hope to turn £20,000 into a milestone on the road to becoming a millionaire over time?

It is actually not as difficult as it may seem at first, or impossible.

If I compound the amount of my Shares and ISA Shares at 12% every year on average, I will have reached my goal after 23 years.

That integration does not depend only on profit. It can also come from financial growth. Yes, on the contrary, falling stock prices can work for me and that is always a risk if I pick my stocks poorly.

Buying good stocks at attractive prices

So, what kind of stocks should I look for that I think could earn me a 12% compound annual return over the long term?

A good example of the type of firm Science Judges (LSE: JDG).

Its share price has grown 94% over the past five years and dividends have been growing annually by double-digit percentages recently, although yields are modest.

The judges identified a very lucrative market. It sells scientific instruments to customers such as labs and industrial users. They need absolute precision so they are willing to pay a premium for quality products.

By purchasing competitively priced small and medium-sized manufacturers, Judges has been able to build a profitable product portfolio of high-profit scientific instruments.

Its unique knowledge and customer base gives it a strong competitive advantage, helping its profits and profits. In fact, the model has been so successful that the main risk I see is competitors trying to copy it, perhaps raising the purchase price for possible acquisitions when they come to market. That would hurt the jury’s strategy.

But the reason I don’t buy it now is not that danger. The valuation I think is too high (even after the 30% share price fall since May).

If I could buy it at the right price, I would add the judges to my shares and ISA shares in a heartbeat.