Could I aim for millions by spending £130 a week on shares?

Can our writer really aim for millions by investing a few hundred pounds each month in shares? With the right approach and patience, he thinks it’s worth trying.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Jumbo jet preparing to take off on a runway at sunset

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

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.

How realistic is it to dream of becoming a multimillionaire by investing in shares without any money saved up to begin? If I am very patient, I do think I could aim for millions by drip feeding money regularly into the stock market. Here is how I would go about it.

Stay the course

Putting a few hundred pounds a month into shares might make me rich – but only slowly. Over time hopefully I could see the money add up, both from adding a regular £130 and getting gains from the investments I have already made.

But I would not start buying shares thinking it is some kind of get rich quick scheme.

Instead I would adopt a timeframe of decades and try to identify great companies I reckon might have a brilliant future. If I am able to invest in such shares at an attractive price, that could form the basis of my plan to aim for millions.

Doing the maths

Investing £130 a week may not sound like a life-changing financial strategy. But the regular saving will add up. At that rate, I could put aside £6,760 each year to invest.

If I keep investing and am able to generate an average 10% annual return – which I would reinvest – then I could be a millionaire after 29 years.

However, my aim in this example is not to be a millionaire but to aim for millions. To do that and earn at least £2m, using the same assumptions, would take me 36 years.

Did you notice something interesting there? Doing exactly the same thing every week, my second million pounds would only take seven years compared to four times that long for my first! That shows the snowball effects of compound investing, when the money my investments have already earned make me even more money.

In fact, after my first 29 years I would have earned just over £1m. But after another 29 years I would be sitting on a portfolio worth over £17m! All of that would have come from investing £130 a week, year in and year out. The plan does not change — but the speed of returns might, thanks to the power of compounding.

I’d aim for millions smartly

The example shows how time can have a huge multiplying effect on the rewards from great investments.

That is why I would be smart about how I aim for millions. Instead of just focusing on the possible rewards, I would always consider the risks involved and try to minimise them. For example, I would build a diversified portfolio of blue-chip companies I understand. I would aim to buy and hold instead of speculating in short-term investments.

Where to start

I already hold some shares in my own portfolio I think are such quality blue-chip firms with great prospects, like Legal & General and Altria.

If I wanted to put the plan above into action right now, I would put aside my first £130 in a share-dealing account today. But I would also start searching more share ideas that could be the lynchpin of my success and help me aim for millions — with a practical plan.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

C Ruane has positions in Altria Group and Legal & General Group. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

I’d put £20K in an ISA now to target a £1,900 monthly second income in future!

Christopher Ruane shares why he thinks a long-term approach to investing and careful selection of shares could help him build…

Read more »

Mature couple at the beach
Investing Articles

6 stocks that Fools have been buying!

Our Foolish freelancers are putting their money where their mouths are and buying these stocks in recent weeks.

Read more »

Black woman using loudspeaker to be heard
Investing Articles

I was right about the Barclays share price! Here’s what I think happens next

Jon Smith explains why he still feels the Barclays share price is undervalued and flags up why updates on its…

Read more »

Investing Articles

Where I’d start investing £8,000 in April 2024

Writer Ben McPoland highlights two areas of the stock market that he would target if he were to start investing…

Read more »

View of Tower Bridge in Autumn
Investing Articles

Ahead of the ISA deadline, here are 3 FTSE 100 stocks I’d consider

Jon Smith notes down some FTSE 100 stocks in sectors ranging from property to retail that he thinks could offer…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

Why I think Rolls-Royce shares will pay a dividend in 2024

Stephen Wright thinks Rolls-Royce shares are about to pay a dividend again. But he isn’t convinced this is something investors…

Read more »

Investing Articles

1 of the best UK shares to consider buying in April

Higher gold prices and a falling share price have put this FTSE 250 stock on Stephen Wright's list of UK…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

The market is wrong about this FTSE 250 stock. I’m buying it in April

Stephen Wright thinks investors should look past a 49% decline in earnings per share and consider investing in a FTSE…

Read more »