ASX shares can be a powerful tool to make your retirement dreams become a reality. Consistent, compounding returns can really add up if you give your portfolio time to grow.
How to turn $30,000 into $1,000,000 with ASX shares
Some investors would look at the above statement and think it just isn't possible. I think it's worth considering a few ASX shares in the past that have been able to do just that for their shareholders.
1. CSL Limited (ASX: CSL)
CSL is an ASX blue-chip share with a market capitalisation of $128.2 billion today. The CSL share price closed on Friday at $282.37 per share but the Aussie biotech company listed for a stock-split-adjusted $0.767 per share back in June 1994.
That means $30,000 invested in the CSL IPO would have netted an investor 39,113 CSL shares. Multiplied by today's share price, and assuming a buy and hold strategy, that would be worth an astonishing $11,044,378 today.
2. A2 Milk Company Ltd (ASX: A2M)
A2 Milk is another top Aussie growth share that continues to climb higher. In fact, the ASX dairy share is up 38.4% this year alone.
If we rewind the clock a little bit, the A2 Milk share price was trading at $0.56 per share in April 2015. A $30,000 investment would, therefore, translate to holding 53,571 A2 Milk shares.
Multiplied by Friday's closing price of $19.40, that would mean a buy and hold investor's investment would be worth a tidy $1,039,277 today.
So, what's the secret?
There are a few things that obviously need to go right to turn $30,000 into $1,000,000 with ASX shares.
The first thing you'll notice is that both of these examples rely on a large dose of luck. Investing in IPOs is inherently risky and history has shown they tend to underperform.
The other thing is that both examples of rocketing ASX shares required the investors to buy and hold. Behavioural economics tells us that generally, investors have a lopsided risk profile. Loss aversion, where you sell your winners too early and hold your losers too long, can be a real a problem for investors.
It's best to be patient and get out of your own way. Buy and hold your investments rather than overtrading and losing out in the long-run.
Reinvesting any dividends back into shares can also be a powerful way to turbo-charge portfolio growth in the decades ahead.
Foolish takeaway
If you can choose high-quality ASX shares early in their growth path, you might be the next investor to turn a $30,000 investment into $1,000,000.
