For most Australians, building wealth starts with the income they earn from working.
But I like the idea of gradually building something alongside it.
ASX shares can give investors ownership in businesses that may grow, pay dividends, and become more valuable over time. Given enough patience, that portfolio could eventually become a substantial asset in its own right.
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I would invest in ASX shares regularly
I would start by making investing a habit.
Rather than waiting for the perfect moment, I would aim to put a manageable amount into the share market regularly and gradually build my ownership of strong businesses.
The early years may not look particularly exciting. A few thousand dollars invested here and there can feel small compared with a salary or a home.
But each investment adds another asset working on my behalf.
And as the portfolio grows, dividends can be reinvested into more shares, while successful companies can increase in value. Eventually, the returns generated by the portfolio itself can become a meaningful part of the wealth-building process.
I would own businesses that can compound
For the core of the portfolio, I would look for ASX shares with potential to become more valuable over many years.
TechnologyOne Ltd (ASX: TNE) is the type of business I have in mind.
Its enterprise software is deeply embedded within organisations such as councils, universities, and government bodies. It can grow by attracting more customers, expanding internationally, and encouraging existing customers to use more of its products.
If a company can repeatedly reinvest in opportunities like these, earnings can grow and shareholders can benefit from that progress over a long period.
I would not expect every investment to produce spectacular returns. I would be looking for a collection of strong businesses that can steadily do more over time.
Dividends can help as well
Capital growth would be a major part of my plan, but I would not ignore income.
A company such as Macquarie Group Ltd (ASX: MQG) can potentially grow over time while also returning cash to shareholders through dividends.
During the wealth-building stage, I would generally reinvest that income.
This means the dividends buy more shares, which can generate further dividends in later years. The effect may look small initially, but decades of reinvestment can make a considerable difference.
Later in life, the same portfolio could potentially provide income without requiring every share to be sold.
That gives me another reason to think of share investing as building a second pool of wealth rather than simply trying to make money from share price movements.
I would spread the risk
I would also avoid relying too heavily on one company or sector.
An Australian portfolio could include businesses exposed to healthcare, technology, financial services, resources, consumer spending, infrastructure, and overseas markets.
ResMed Inc. (ASX: RMD), for example, gives investors exposure to global demand for sleep apnoea treatment, while BHP Group Ltd (ASX: BHP) provides ownership of major mining assets supplying commodities used around the world.
I think owning a collection of strong businesses makes it easier to stay invested when one company or industry goes through a difficult period.
That patience is important because building meaningful wealth through shares is usually a long process.
Foolish takeaway
I would approach ASX investing as something I build gradually in the background for years.
Every regular investment adds another small piece of ownership, while business growth and reinvested dividends can make that portfolio increasingly valuable over time.
The goal would be to reach a point where my wealth is no longer being built solely from the money I earn from working.
I think a patient portfolio of quality ASX shares can be a powerful way to get there.
