Reaching a quarter of a million dollars in your share portfolio might sound ambitious — but with a clear plan and consistency, it's a surprisingly achievable goal.
Even if you're starting from scratch, you could build a $250,000 ASX share portfolio by 2035 — that's just 10 years from now.
Here's how to make it happen.
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The magic of consistency and compounding
Let's start with the numbers. If you are able to invest $1,250 per month into a well-diversified portfolio of quality ASX shares (or ETFs) and can earn an average return of 10% per annum, which is in line with historical averages (but not guaranteed), you could reach $250,000 in 10 years.
The formula is simple. Investors need to make regular contributions, commit to the plan, reinvest dividends, and let compounding work its magic.
It's not about picking the next big winner. It is about building discipline and momentum.
What should you invest in?
The key is to focus on quality and diversification. This might include a combination of quality ASX shares and ETFs.
In respect to ASX shares, you want to invest in businesses with strong and sustainable competitive advantages, positive long term growth outlooks, and fair valuations.
Shares that spring immediately to mind are the likes of ResMed Inc. (ASX: RMD), WiseTech Global Ltd (ASX: WTC), Xero Ltd (ASX: XRO), and Lovisa Holdings Ltd (ASX: LOV).
Whereas for ASX ETFs, it is hard to look beyond the iShares S&P 500 ETF (ASX: IVV), the Betashares Nasdaq 100 ETF (ASX: NDQ), and the VanEck Morningstar Wide Moat ETF (ASX: MOAT). In fact, the latter has a specific focus of investing only in the types of companies we are looking for.
Start now — and stay the course
The biggest challenge isn't necessarily picking the perfect shares — it is starting and sticking with it.
Delaying even by a couple of years can drastically change your final outcome. On the other hand, getting started now — even with modest amounts — puts compounding in your corner.
If you're not at $1,250per month, don't worry. Even $500 a month can go a long way when you give it enough time and stay consistent.
For example, $500 a month with a 10% average return over 10 years would turn into $100,000.
Foolish takeaway
With a smart, diversified approach and a long-term mindset, building a $250,000 ASX portfolio by 2035 is achievable.
Just focus on quality, contribute regularly, reinvest dividends, and let time and compounding do what they do best.
