I'd aim for a million buying just a few cheap ASX shares!

Here's how you could grow you investment portfolio to the $1 million mark in the future…

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you want to become a stock market millionaire, I have some good news for you.

Growing a million-dollar portfolio is something that anyone can do if they have a combination of time, patience, and sufficient disposable income to invest.

Over the long term, the stock market has generated an average total return of 10% per annum.

And while past performance is not a guarantee of future returns, it would be disappointing if the stock market didn't generate the same level of returns in the future. In light of this, we're going to base our calculations on this return.

Beautiful holiday photo showing two deck chairs close-up with people sitting in them enjoying the bright blue ocean and island view while sipping champagne.

Image source: Getty Images

Building a million-dollar stock portfolio with ASX shares

If you're able to build a portfolio of ASX shares that matches the market return, then investing $5,000 a year in the share market would grow to the million-dollar mark after 31 years.

If you would like to get there sooner, then you would have to increase your annual contributions.

For example, doubling your investment to $10,000 per annum, you would reach your goal after just over 24 years with an average 10% per annum return.

But what if you could beat the market Warren Buffett-style?

Well, if you can beat the market by identifying cheap ASX shares that provide even greater than average returns. Let's say 15% per annum. Then your journey to $1 million would be given a boost.

Investing $5,000 each year would turn into one million almost 8 years earlier after just over 23 years. Whereas investing $10,000 per year would get you there in just under 19 years, which is approximately 5 years ahead of schedule.

Though, it is worth noting that beating the market consistently over a long period is a task that few achieve. But there's nothing to stop you from trying!

The Buffett-inspired VanEck Morningstar Wide Moat ETF (ASX: MOAT) could be worth considering.

It gives investors exposure to a diversified portfolio of attractively priced US companies with sustainable competitive advantages.

The index that this ETF tracks has beaten the market over the last decade with a 15% per annum return and has generated an average annual return of 18.5% since inception.

Whatever you choose to do, the main thing is to make a plan and stick with it, and let compounding work its magic.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended VanEck Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on How to invest

Happy man holding Australian dollar notes, representing dividends.
How to invest

How to build a $100,000 ASX share portfolio

Wanting to build your portfolio? Here is one way to do it.

Read more »

A female sharemarket analyst with red hair and wearing glasses looks at her computer screen watching share price movements.
How to invest

How I would build the ultimate beginner portfolio with $10,000

A strong beginner portfolio often starts with diversification and a focus on quality.

Read more »

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today
How to invest

How to invest $300 a month in Australian shares to target a $50,000 annual second income

The share market is a great place for investors to build a second income.

Read more »

Two boys looking at each other while standing by the start line with two schoolgirls.
How to invest

Just starting out? These 5 ASX shares could be the perfect first buy

Established, resilient, and a diversified starting point for new investors.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
How to invest

How to build a resilient ASX portfolio that can handle any market

Worried about market volatility? Here’s an easy way to handle it.

Read more »

A man stares out of an office window onto a landscape of high rise office buildings in an urban landscape.
How to invest

How to build a winning 10 ASX share portfolio from scratch in 2026

Here's why this group of shares could form a winning portfolio for Aussie investors.

Read more »

A person sitting at a desk smiling and looking at a computer.
How to invest

Why I think doing less could make you a better ASX investor

The urge to act can be strong in markets, but I think patience and discipline are often more powerful over…

Read more »

A young couple hug each other and smile at the camera, standing in front of their brand new luxury car.
How to invest

How to invest $1,000 per month in ASX shares and build long-term wealth

It isn't as hard as you think to build wealth in the share market.

Read more »