Could investing in the ASX 200 make me a millionare within a decade?

Becoming a share market millionaire is a dream that I’m sure many Australians have.

The good news is that it is attainable for anybody if you have time, funds to invest, and a plan.

But could you become a millionaire in just a decade by investing in ASX 200 shares? Well, the short answer is yes.

Becoming a millionaire in 10 years with ASX 200 shares

As of the end of 2021, over the last three decades, the Australian share market has generated an average annual return of 9.6% per annum. This is broadly in line with the historical returns of global share markets.

And while past performance does not guarantee future returns, I would be disappointed if we didn’t average something similar over the next 10 years.

Based on this, if you made a single $400,000 investment into the share market and earned 9.6% per annum for 10 years, your portfolio would grow to be worth just over $1 million.

Of course, very few people have that level of capital ready to sink into the share market, so that isn’t viable for all.

If you’re lucky enough to have $50,000 available to invest every year, then those investments would eventually grow to be worth $1 million after 10 years if you earned the same level of return.

What if you don’t have this level of capital?

If you don’t have that amount of capital to invest, your quest to become a share market millionaire in the space of 10 years will come down to luck, I’m afraid.

If you can identify a small cap ASX share that has the potential to become a 100-bagger (generate a return 100 times your original investment), then you could become a millionaire by investing $10,000.

These investments are very rare, but they do exist. For example, lithium giant Pilbara Minerals Ltd (ASX: PLS) has generated a return of 63.5% per annum over the last 10 years despite its recent pullback. This would have turned $10,000 into approximately $1.4 million.

Slow and steady wins the race

Investors that don’t have a huge amount of capital to invest may be better taking the slow and steady approach instead of relying on luck.

By investing $10,000 each year for a period of 24 years, you would have grown your portfolio to over $1 million if you earned an average annual return of 9.6%.

The post Could investing in the ASX 200 make me a millionare within a decade? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• The top five ASX 200 shares in Macquarie’s model portfolio
• Why is the Flight Centre share price in the red today?
• 3 ASX lithium shares to buy with 40%+ upside: analysts

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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