Turning 40 is a milestone. For many Australians, it is the decade where careers are more established, debts are gradually being paid down, and thoughts about retirement start to get serious.
But the big question remains: if you are starting your investment journey now, is it still possible to build a sizeable nest egg?
The good news is yes — especially if you harness the power of consistent investing and compounding returns.
Time is still on your side
While you may not have the same runway as a 20-year-old, at 40 you still have 27 years until the age pension kicks in at 67. That's nearly three decades for your money to work for you.
Compounding — where your returns generate further returns — is one of the most powerful forces in investing. Even modest contributions, invested regularly, can snowball into significant wealth over time.
$500 a month
For many people, $500 a month is achievable. It is the equivalent of cutting back on a few discretionary expenses or diverting a little more of your pay into investments. Over time, that discipline can make a world of difference.
And unlike lump sums, a monthly contribution also smooths out the ups and downs of the market. You buy more when prices are low, and less when they're high — a strategy known as dollar-cost averaging.
Where to put the money
The key isn't just investing regularly but investing wisely. Building a portfolio of quality ASX shares and ETFs with strong business models, experienced management teams, and sustainable competitive advantages is a proven way to grow wealth.
For example, ASX blue chips like ResMed Inc. (ASX: RMD) or Telstra Group Ltd (ASX: TLS), alongside broad-market ETFs such as the iShares S&P 500 ETF (ASX: IVV), can provide a mix of stability, dividends, and long-term growth.
The result at retirement
So, how much could $500 a month actually become?
If you start at age 40, invest $500 every month, and earn an average annual return of 10% — roughly in line with long-term share market returns (though not guaranteed) — by age 67 you would have around $765,000.
That's over three-quarters of a million dollars built steadily from modest, consistent investing.
Foolish takeaway
The lesson is clear: even if you're only starting to take retirement investing seriously at 40, you still have plenty of time to build real wealth.
By sticking to a disciplined plan of regular contributions, focusing on quality investments, and letting compounding work its magic, you can retire with confidence — and a nest egg big enough to support the lifestyle you want.
