The Motley Fool

How to turn $10,000 into $1 million with ASX shares

I get it. A million dollars. The dream. To make money out of nothing is what every investor dreams of – and to be a stock market millionaire… well just writing that phrase gave this writer goosebumps.

But the reality is that making this kind of return (9,990% to be exact) is going to take a lot of time, unless you’re extraordinarily lucky or extraordinarily talented (most likely both).

But it is possible, so let’s do some maths.

What is the rule of 72?

The rule of 72 lets you calculate how long it will take for an investment to double. All you do is divide the number 72 by your expected rate of return. So if your portfolio returns an average of 10% each year, it will take you 7.2 years for your principle to double.

Using this rule and ASIC’s helpful compound interest calculator, we can work out how long it will take to get to the mil’ mark with $10,000 and nothing else. Well, you would need approximately 6 doubles and at 10%, it will unfortunately take roughly 60 years. But if you bump that 10% return up to 12% – we’re down to 36 years. At 15% we’re at 29 years and at 20%, only 22 short years before you’re a millionaire.

This may not be too comforting for all of you aspiring Richie Richs out there – 20% returns for 22 years is a big ask. So consider this instead. If you earn a 12% return, but also contribute an extra $100 per week to your initial $10,000, it will only take 26 years instead. If you can stretch that $100 to $150, you’d be looking at 23 years and if you could double it to $200 a week, 21 years is starting to sound ok to me.

But a 12% return is still an above market return, so you’ll have to make sure you’re also investing in high quality companies that can outperform the index over time. Names like Macquarie Group Ltd (ASX: MQG), Xero Ltd (ASX: XRO) and Ramsay Health Care Ltd (ASX: RHC) come to mind.

And if you’re more of a passive investor and want to stick with index funds like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) with an average rate of return around 10%, it will take approximately 26 years to hit that million with $200 a week on top of your 10 grand.

So keep this in mind – it’s very hard to get rich quickly on the stock market – but not so hard to get rich slowly. You just have to be consistent in your contributions, and very, very patient.

For more potentially market-beating shares, check out our favourite blue-chips here!

Our Top 3 Dividend Blue Chip Shares for 2019 – NOW AVAILABLE!

You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.

So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!

Stock #1 is a beloved old Australian company turning its attention to high-margin businesses... and rapidly returning cash to shareholders with its hefty dividend...

While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe... poised for years (or even decades) of tremendous growth...

Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.

You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!


Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.