When people hear investing goals like $50,000, it can sound intimidating. But when you break it down into monthly habits rather than a lump sum, it becomes more achievable than most people realise.
If I were investing $500 a month into ASX shares and exchange-traded funds (ETFs), this is how I'd think about getting there and what I'd likely invest in along the way.
Image source: Getty Images
Building a habit
The most important part of this plan is consistency.
Putting $500 aside every month does two powerful things. First, it forces regular saving without relying on motivation. Second, it spreads your investing across market ups and downs, which reduces the risk of terrible timing. This is called dollar-cost averaging or DCA.
At $500 a month, it wouldn't take as long as you might think to build a $50,000 nest egg.
Assuming a 9% average return each year, which I think is a fair and realistic target, an investment of $500 a month would grow to the target amount in just over 6 years.
It doesn't happen in a straight line. Some years will feel slow. Others will surprise you. But the maths quietly does its job in the background.
How I would target a 9% annual return
A 9% return isn't about chasing speculative stocks or getting lucky. It's roughly in line with long-term equity market returns, assuming dividends are reinvested and you stay invested through cycles.
To give myself the best chance of achieving that, I'd stick to high-quality businesses and broad ETFs.
For example, a core holding like the Vanguard Australian Shares Index ETF (ASX: VAS) gives exposure to the largest ASX shares and captures dividends along the way. Pairing that with something global like the Vanguard MSCI Index International Shares ETF (ASX: VGS) helps diversify beyond Australia and adds exposure to sectors we lack locally.
Those two alone could comfortably form the backbone of a monthly investing plan.
Adding quality ASX shares over time
Alongside ETFs, I'd gradually add individual ASX shares to the portfolio when opportunities present themselves.
I'm not trying to buy everything at once. I'd rotate contributions based on value and conviction. Some months might go into ETFs. Others might go into a single high-quality stock.
Examples of the types of shares I'd be comfortable owning long term include businesses like Wesfarmers Ltd (ASX: WES), which offers stability and cash flow, and ResMed Inc (ASX: RMD), which has structural growth drivers and strong execution. For higher growth exposure, something like HUB24 Ltd (ASX: HUB) or Zip Co Ltd (ASX: ZIP) could make sense.
The key is that these are businesses I'd be happy to keep buying incrementally, rather than trying to time entries perfectly.
Foolish takeaway
Turning $500 a month into $50,000 doesn't require perfect stock picks. It requires time, discipline, and a sensible approach to investing.
By consistently buying ASX shares and ETFs that represent quality businesses and broad market exposure, achieving a 9% average return over the long run is very achievable. Stay invested, reinvest dividends, and let compounding work quietly in the background.
It's not flashy. But this style of investing has worked for decades.
