The idea of becoming a millionaire no doubt seems like a dream to most people, however it is achievable if you maintain a conservative long-term investing focus.
Consider for example a worker with a superannuation account worth $100,000.
Let's assume this worker is a diligent saver and is able to regularly save $500 per month to add to his or her retirement portfolio. Over a 30-year time horizon this regular savings plan will deposit an extra $180,000 into the portfolio. What's more, as this is for retirement, the original $100,000 plus the regular savings all remain in the portfolio and benefit from compounding – compounding is in many ways the secret to long-term wealth accumulation.
Finally, if this strategy can produce an average return per annum of 8%, then over the course of 30 years the portfolio will achieve a capital gain of $1,405,965. Coupled with the starting value plus the regular deposits, a retiree will hold a total portfolio valued at $1,685,965.
Achieving an 8% return for such a long period of course is not easy. Two ways which could help you get there are by allowing a top performing fund manager such as Perpetual Limited (ASX: PPT), BT Investment Management Ltd (ASX: BTT) or Magellan Financial Group Ltd (ASX: MFG) to manage your investments. Alternatively, if purchased at the right price, buying shares in these three fund managers would have you well on your way to achieving a respectable 8% return too.
