Many readers are likely to aspire to being a millionaire one day.
While there are many ways to achieving this goal, one method that has created countless millionaires is investing in ASX shares.
But could you really get there by investing $10,000? Well, the answer is yet, depending on your investment time horizon.
Turning $10,000 into $1 million with ASX shares
The power of compounding and time are your two best friends when it comes to investing. When these two combine, good things happen.
Historically, the share market has generated an average annual return of 10% including dividends.
Were it to do the same again in the future, a single investment in $10,000 could grow into something significant in time if you're patient enough.
For example, thanks to time and compounding, $10,000 would turn into over $40,000 in 15 years if you averaged a return of 10% per annum and reinvested your dividends.
But clearly, $40,000 is still a long way from that millionaire status we are aspiring to.
Well, unfortunately, without making any further contributions, you would have to sit very patiently to reach this level.
In fact, it would take just over 48 years in total to grow $10,000 into $1 million with ASX shares and a 10% per annum return.
If you're 21, then this means that you could have a million-dollar portfolio around the time you reach retirement age. That certainly would be a nice nest egg to combine with your superannuation.
But what if you wanted to get there sooner? Let's look at making extra contributions.
Making a million quicker
Getting to $1 million quicker will depend upon your available income.
If you are able to start with a $10,000 investment and then make $500 contributions each month, it would take approximately 28 years to get there.
Think you could manage $1,000 investments each month? Great, because that would knock off about six years and take just over 22 years to get to $1 million.
Finally, if you're lucky enough to have $2,000 available to invest monthly, then you need a touch of 16 years to grow your portfolio to millionaire status.
Which ASX shares should you buy?
History has shown that a focus on high-quality companies with strong business models has delivered great results.
Companies like CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG), and Xero Limited (ASX: XRO) could tick these boxes and may be worth further investigation.
But the main key to success is to find the plan that suits you (and your budget) and stick with it through the long term. You will no doubt be thanking yourself for doing so in the future as your wealth builds.
