While people will give a wide variety of reasons for deciding to invest in shares, at the end of the day their motivation is likely to boil down to a desire to earn a decent return on their savings.
These savings will in turn be utilised for a range of purposes such as ensuring a comfortable retirement or providing a head start in life for their children.
While the motivation for investing in shares might be humble for most, it's amazing to realise that starting from scratch and putting aside a little each week could actually mean that you're a millionaire within just 31 years!
Consider this
You've mastered the concept of 'living within your means'. This frugality allows you to save $100 per week, every week, – adding up to $5,200 per year.
You invest this into the stock market and earn 10% per annum (pa) – we'll get to how in a moment.
Then every year for the next 30 years you add another $5,200 to your share portfolio. All told you will have invested $166,400 (that's 31 x $5,200) and the beauty of compounding your savings at a rate of 10% pa will do the rest. Under this scenario by providing investment gains of $879,516.
Summed together and your total wealth will have ballooned to $1,045,916!
Of course, achieving a 10% compound return over a 31-year period is not easy, but it's not impossible either.
How do you earn 10% per annum?
If you're not an experienced investor, then it could be best to seek guidance from someone who is.
A long-term, top ranking fund manager can be a good place to start. For example, Platinum Asset Management Limited (ASX: PTM) – which manages the Platinum International Fund – has achieved a return of 12.6% per annum since the fund's inception in April 1995.
