I would put shares like these into an ISA to build serious retirement wealth

Looking ahead to retirement is something many investors start doing late. But the earlier you start opening an ISA to save for retirement, the longer the financial benefits can be huge.

To illustrate, imagine I put £500 a month into my ISA and compound it at 9% per annum. Doing so 15 years before retirement will mean I have an ISA worth around £183,000 when I stop working. Doing the same, but starting 15 years earlier, means I'll retire with an ISA worth around £851,000.

In other words, double time in this example gives too many rather than double the results, using the same investment method. That shows the power of integration.

Using compounding to build wealth

So what sort of companies should I hold in my Stocks and Shares ISA if I want to try to compound at that sort of level?

The answer is that I need to choose carefully. That 9% might not sound like a lot — and in a good year, most stocks will grow more than that. But remember that the 9% here is the compound annual growth rate, which means an average of 9% every year as a whole (my example here uses a 30-year time frame).

Based on that, a compound annual growth rate of 9% is harder to achieve than one or two good years. But it is possible.

Both share price growth and dividends (which I will reinvest) can help my ISA increase in value over time.

Choosing to share a star

Whether it's from growth stocks or income, what I'm looking at will be remarkably similar. In short, it's a business with a proven model that consistently allows it to generate excessive revenue.

Maybe it pays that as a profit or maybe it keeps you in business. Either way, hopefully, buying the right share at the right price can help my ISA grow in value over the long term.

For example, consider a supermarket chain Places to stay in Sainsbury (LSE: SBRY).

The retailer has had a strong five-year run, with the stock price up 43% during that time. On top of that, the dividend yield is 4.7%. Remember though, that's a yield based on present value. If I had bought the shares five years ago when the shares were cheap, my investment would have yielded 6.7%.

Sainsbury's has a lot to offer in an investment. It operates in a market with strong demand that can last for a long time. It has a large customer base and promotes a sustainable trend with its product, loyalty program and network of stores that for some consumers it provides a convenient environment.

Profit margins for grocery stores are slim and have gotten slimmer in recent decades. Continued intense competition may continue to squeeze margins – and profits.

If I could buy Sainsbury's at a fair price, I'd be happy to hold the share in my ISA.

The current balance is too rich for my liking​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ Still, some stocks benefit from strong market competition — and attractive valuations. Getting them now can help me improve the future value of my ISA.