How to become an ASX share market millionaire by investing $500 a month

Becoming an ASX share market millionaire is likely to be an aspiration that many readers have.

And while it might seem like you would need big money to achieve this goal, history shows that this isn’t actually the case.

If you have time on your side, then you could build a million-dollar portfolio with ASX shares even by investing modest amounts.

Becoming an ASX share market millionaire

Over the long term, the share market is delivered investors an average annual return of 10% per annum.

There’s no guarantee that it will continue doing the same in the future, but we’re going to assume that it does for the purpose of this article.

Based on that return, let’s now see how long it would take you to become an ASX share market millionaire starting from zero.

If you’re able to invest $500 into ASX shares each month and earned the market return, you would have grown your portfolio to $100,000 after 10 years thanks to the power of compounding.

But as compounding really starts to work its magic the longer you leave it, let’s now fast forward another decade and see what would happen if you continued with your $500 investments.

We’re not quite at your goal yet, but we’re getting closer. After a total of 20 years, your portfolio would have a market value of $360,000.

Let’s now skip to the end. After a total of 30 years of $500 per month investments, you would reach your goal of being an ASX share market millionaire.

This means that a 21-year-old could potentially be a millionaire by the time they are 51 years old.

Getting there quicker

There are ways to get there quicker than this.

If you have more capital to invest, it could be possible to shave some time.

Here’s a quick summary of how long different monthly amounts would take to compound to $1 million based on a 10% return per annum:

• $1,000 – 23 years
• $2,000 – 17 years
• $3,000 – 13.5 years

Overall, I believe this demonstrates that playing the patient game and investing consistently in high quality ASX 200 shares can be a very rewarding endeavour.

The post How to become an ASX share market millionaire by investing $500 a month appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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