I'm sure many readers dream of becoming a millionaire.
In fact, having a seven-figure cash balance is such a popular dream, Eddie Maguire has been hosting a game show with the aim of winning a million dollars each weekday for years.
But what if you didn't need a healthy dose of general knowledge and Eddie to reach this goal? What if you could do it yourself?
Well, the good news, sorry Eddie, is that you don't need a game show to make a million dollars. You can do this by investing in the share market.
How much do you need to invest to make a million?
In order to grow an investment portfolio to seven figures, I would invest $500 a month into ASX 200 shares.
Doing this consistently and letting the power of compounding work its magic, would see your portfolio grow materially over a long enough period if the market generates returns in line with historical averages.
Over the last 30 years, according to Fidelity, the Australian share market has generated an average return of 9.6% per annum for investors. And while there is no guarantee that it will do the same over the next 30 years, I'm optimistic that it will.
After all, this level of return is in line with what we have seen historically on Wall Street over the last century.
Based on this level of return, you would need just a touch over 30 years to become a stock market millionaire by investing $500 a month into ASX 200 shares.
You could even get there sooner if you can beat the market return. While this is certainly no easy feat, I believe investing in high-quality companies with strong business models and positive long-term growth outlooks enhances your chances of doing so.
For this reason, I would build a diverse portfolio filled with top-quality ASX 200 shares such as Altium Limited (ASX: ALU), CSL Limited (ASX: CSL), and Xero Limited (ASX: XRO), to name just a few.
