While there will always be the lucky investor who strikes it rich on a speculative mining stock, as a strategy, trying to get rich quickly is bound to lead to disappointment.
Rather, investing is best viewed as a tried and tested way to 'get seriously rich slowly'.
Consider this!
Let's assume you can save an initial $10,000.
Next, let's assume through a diligent savings regime you are able to save $500 every month – this equates to $6,000 per year of additional funds for investment into shares.
Thirdly – and this is where it starts to get a little trickier – imagine you can achieve a return on your investments of 10% per annum (pa). That may sound like a lot, and it is compared with the interest you'd receive from your bank, however, as we'll see in a moment it's definitely not impossible.
Finally, we'll need to utilise the "magic" of compound interest. This "magic" has the greatest effect the longer we allow the compounding to continue. In this instance we'll need 30 years.
The strategy, as outlined above, means in total we save $190,000 to invest into a share portfolio.
The beauty of compounding, achieved via reinvested dividends and capital gains expands our wealth by an extra $971,458!
So, after just 30 years, your share portfolio could ultimately be worth $1,161,458!
Of course, picking stocks that will give you long-term double digit returns is no cinch, but then again it's certainly not impossible.
Consider the 10-year total shareholder returns (TSR) achieved by the following three stocks for instance.
