Who wants to be a millionaire?
Believe it or not, there is no need to go on a television game show to make this happen.
If you can set aside $10 each day, you could make your millionaire dreams come true via the power of ASX shares.
Let's take a look at a hypothetical:
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Diversify with a variety of growth stocks
Research from one of the major banks earlier this year found the average Australian had about $34,500 saved up.
Let's say you can invest that much in an ASX stock portfolio and keep adding $10 each day, or $300 per month.
What sort of shares could you buy to supercharge to a million?
One way could be to create a basket of ASX growth shares. But don't forget to diversify so that your whole portfolio doesn't suffer if some stocks bomb.
Three examples of growth stocks favoured by experts at the moment are Cettire Ltd (ASX: CTT), Johns Lyng Group Ltd (ASX: JLG), and Lynas Rare Earths Ltd (ASX: LYC).
The first two have been received warmly by the market after recent results.
Lynas hasn't had the best time of late, with the stock price falling 14.6% over the past 12 months, but it's producing minerals that will enjoy plenty of long-term demand.
The diversification is decent with that trio as they play in the retail, insurance, and mining industries respectively.
How long to a million bucks?
Past performance is no indicator of what might happen in the future. But for the purposes of modelling our million-dollar portfolio, let's examine the five-year returns.
The Johns Lyng share price has gained a phenomenal 568% over that time, while Lynas Rare Earths has rocketed 239%.
Cettire hasn't yet been on the ASX for five years, but its share price has appreciated more than 450% from its closing price on the first day of listing back in December 2020.
Even taking the lowest of those returns in Lynas, the compound annual growth rate (CAGR) is a stunning 27.66%.
Let's be conservative from that figure again and say your portfolio could realistically return 20% each year.
Start with the $34,500 portfolio. Keep adding $10 a day, or $300 each month.
I can tell you that after 17 years, that basket of ASX shares has grown to be worth more than $1.1 million.
That's the power of compounding.
Lock it in, Eddie.
