While becoming a share market millionaire by retirement may appear to be an unattainable dream, it is actually more achievable than you may think.
And although you might assume that growing your wealth through ASX shares requires extensive knowledge and a lot of time, especially if you're not well-versed in the stock market, that's not the case.
That's because a simple approach to grow your retirement nest egg through shares exists. This means that nearly anyone with some initial capital and time to allow it to grow can become wealthy, potentially even reaching the status of a millionaire.
Here's how you can accomplish it.
The ideal retirement strategy when investing in ASX shares
Arguably, the ideal retirement strategy when investing in ASX shares, and being successful at it, is simply to be systematic and patient.
Investors that make regular investments in quality ASX shares and let compounding work its magic, have the potential to generate significant wealth.
For example, over the last 30 years, the Australian share market has generated an average return of 9.6% per annum.
And while there is no guarantee that this will be the case over the next 30 years, it is largely in line with historical returns on Wall Street. As a result, it isn't unreasonable for investors to assume similar returns occur over the next 30 years.
Based on the above, here is approximately what would happen if you invested certain amounts into the share market and earned the market return over different periods:
| Growing at 9.6% for: | $5,000 invested annually | $10,000 invested annually |
|---|---|---|
| 5 years | $33,200 | $66,400 |
| 10 years | $85,700 | $171,400 |
| 15 years | $168,700 | $337,400 |
| 20 years | $300,000 | $600,000 |
| 25 years | $507,600 | $1,015,000 |
| 30 years | $835,800 | $1,670,000 |
All in all, the key is to have a realistic plan and then stick to it over the long run.
