For many young investors, the idea of building serious wealth through the share market can feel out of reach — especially when starting with just a small amount.
But what if I told you that investing as little as $50 a week into ASX shares could make a meaningful difference to your financial future?
Thanks to the power of compounding, even small, regular investments can snowball into something substantial over time.
Let's take a closer look.
Starting early with ASX shares makes all the difference
Imagine you're 21 years old and decide to invest $50 a week — roughly $200 a month — into a diversified portfolio of quality ASX shares or ASX ETFs.
Let's imagine that over time, these investments earn an average annual return of 10% — which, while not guaranteed, is broadly in line with the long-term returns of the Australian share market.
At first, the numbers might not seem all that impressive. After five years, your portfolio would be worth around $15,000. But fast forward to age 31, and it has grown to over $40,000. Keep going until you're 41, and that becomes around $140,000, all else equal.
Now here's where things really take off!
If you stick with it through to age 51, your portfolio could be worth around $415,000. And by the time you reach 61, you're looking at approximately $1.1 million — all from investing $50 a week for 40 years.
Why compounding works
Compounding is what happens when your investments generate returns — and then those returns go on to generate their own returns. It is like a snowball rolling down a hill: it starts small, but the longer it rolls, the more momentum it gains and the large it becomes.
And the best part? The earlier you start, the more powerful the effect becomes. That's why 21-year-olds who start investing now have such a big advantage — time is on their side.
Small habits, big rewards
You don't need to pick the next Pro Medicus Ltd (ASX: PME) or Xero Ltd (ASX: XRO), nor time the market perfectly. Simply setting up an automatic monthly investment into a low-cost ETF or a portfolio of reliable ASX shares can be enough to build serious wealth over time.
And if you ever find yourself with a little extra cash — say a tax refund or a bonus — adding that to your investments can help accelerate the compounding process even further.
Foolish takeaway
Investing $50 a week might not feel like much today, but over the course of a working life, it could become a life-changing amount of money. The key is to get started, stay consistent, and let time do the heavy lifting.
In the world of investing, the small decisions you make today could have a huge impact on your future.
