The Australian share market is a great place to grow your wealth.
Over the years, countless Aussies have constructed ASX share portfolios and grown them to be worth tens of thousands and sometimes significantly more.
But how realistic is it for someone to grow a $7,000 portfolio into $75,000 by 2030? Let's find out.
Growing an ASX share portfolio to 2030
Unfortunately, turning $7,000 into $75,000 in a touch over five years without making any further contributions is next to impossible. Anyone promising you this sort of return shouldn't be trusted.
Sure, you could get lucky piling all the funds into a group of speculative ASX stocks, but the likelihood is that you will end up with less money than you started with when things go awry.
But that doesn't mean that there isn't a pathway to $75,000 when starting at $7,000. If you can afford to make regular contributions to your ASX share portfolio, you would have a good chance of bringing your dream into reality.
How to get there
Compounding is your best friend when investing. And the best way to benefit greatly from this friendship is by making regular investments into ASX shares.
By doing this, you can supercharge your returns and grow your wealth over the coming years.
Five years isn't a long time in the share market. We could have a couple of bad years and then three good years. But let's imagine that across the five years you average a total return of 8% per annum and reinvest any dividends.
If you were to do this and invest $1,000 monthly into your ASX share portfolio, you would grow your portfolio to $75,000 within the five years. And if you were to outperform this return, you could get there even sooner.
How to beat the market
Certain ASX shares are more likely to deliver stronger than average returns for investors than others.
Generally, outperformers have strong business models, sustainable competitive advantages, and positive long-term growth outlooks.
Companies such as CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG), and ResMed Inc. (ASX: RMD) all tick these boxes and have beaten the market over the past decade. This could make them worth further investigation as potential additions to your ASX share portfolio.
The main thing is coming up with an investment plan that works for your budget and then sticking with it through the years. You will thank yourself in the future.
