If you want to retire early, then you could try and win the lottery. But with the odds on Powerball stacked against you, I wouldn't be relying on this.
Instead, I would look to grow my wealth by buying and holding high-quality ASX 200 shares over the long term.
Growing your wealth
The good news is that you don't need to start with a huge sum of money to do this. Slow and steady can win the race when it comes to investing.
If you can afford to put $500 into ASX 200 shares each month, you could potentially retire early thanks to the power of compounding.
It's difficult to say how much money you will need for retirement in the future, particularly if you want to retire early, but let's look at retiring with a passive income stream of $60,000 per annum.
$60,000 passive income in retirement
Historically, the share market has provided investors an average annual return of 10%.
And while past performance is not a guarantee of future returns, I'm optimistic that the share market will continue to deliver similar returns over the long term.
If it does, and you invest $500 a month and earn the market return, you would have grown your portfolio to just over $1 million after 30 years.
After which, once your portfolio has hit the $1 million mark, you can switch your focus to income by building a portfolio filled with high-yield ASX 200 dividend shares that provide you with ~6% yields.
At present, this includes bank shares such as Westpac Banking Corp (ASX: WBC) (see here) or the Vanguard Australian Shares High Yield ETF (ASX: VHY).
Overall, this means that if you started investing in this way in your 20s, you could theoretically be retiring early in your 50s.
