How I’d invest £1,000 a month in UK shares in 2024 to aim for £100,000

How quickly can Stephen Wright turn £1,000 a month into the magic £100,000 Charlie Munger talked about? Surprisingly quickly, by investing in UK shares.

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.

BUY AND HOLD spelled in letters on top of a pile of books. Alongside is a piggy bank in glasses. Buy and hold is a popular long term stock and shares strategy.

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.

I think buying UK shares can be a great way of building wealth. And the best way to do that – in my view – is by investing regularly in great companies when they trade at attractive prices.

Charlie Munger (who would have turned 100 yesterday) said that things get easier after the first £100,000. So here’s how I’d aim to get there with a £1,000 monthly investment.

Quality companies

Warren Buffett credits Munger with demonstrating to him the importance of investing in quality businesses. That’s advice I’d look to implement in my own investing. 

The best companies have two things in common. They generate significant amounts of cash and they have the ability to do this for a long time to come.

Fortunately, there are several UK stocks that fit the bill. Two obvious examples (and there are several more) are Rightmove and InterContinental Hotels Group (IHG).

The companies operate in different sectors, but both have terrific business models. As a platform business, Rightmove’s costs are low, while IHG’s franchise model avoids the operating costs of hotels.

Neither is risk-free – Rightmove faces increasingly tough competition and a downturn can weigh on IHG’s earnings. But both are proven operations with terrific economic properties.

The road to £100,000

There are many more examples of quality businesses in the FTSE 100 and the FTSE 250. But how quickly could a £1,000 monthly investment grow into something worth £100,000?

On average, the FTSE 100 has returned 6.5% per year over the last couple of decades. At that rate, £1,000 per month becomes £100,000 surprisingly quickly – within seven years.

Over the last few years though, Munger suggested investors should lower their expectations from the stock market. But a 5% return would extend my timeframe by only a matter of months.

Even if I did better and managed a 9% annual return, it would still take me more than six years to get to £100,000. This illustrates a key point.

The most important thing on the road to £100,000 is saving money and putting it into the stock market. That matters far more than whether my annual return is 5%, 6%, or 9%.

Regular investing

I think it’s surprising how quickly £1,000 each month can turn into £100,000 by investing in the stock market. Even with below-average returns, I think seven years is still reasonable.

Of course, if my investments go down in value — which is a real risk — it will take longer, perhaps much longer. Yet I think I’m being conservative with my returns target.

There are other benefits to investing each month as well. If prices fall in any month, I’d be in a position to take advantage and invest while stocks are cheap.

Munger says the first £100,000 is the hardest and investors can take it a bit easier once they get to that level. But that’s something to think about further down the line.

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.

Stephen Wright has no position in any of the shares mentioned. The Motley Fool UK has recommended InterContinental Hotels Group Plc and Rightmove Plc. 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

Dividend Shares

Is a Bank of England rate cut good for the Lloyds share price?

Ken Hall analyses what the latest interest rate cut could mean for the Lloyds share price with the UK bank’s…

Read more »

Investing Articles

2 brilliant bargains I’m considering for my Stocks and Shares ISA!

These FTSE 100 and FTSE 250 shares offer exceptional value on paper. Here's why I'm considering them for my Stocks…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Dividend Shares

How much passive income could I generate with just £10 per day?

Ken Hall wants to create his £10,000 yearly passive income dream by investing just £10 every weekday day in Footsie…

Read more »

Investing Articles

Is the Rolls-Royce share price too high? Here’s what the experts say

The Rolls-Royce share price has surged over two years, representing one of the FTSE 100’s greatest success stories. But is…

Read more »

Smart young brown businesswoman working from home on a laptop
Investing Articles

A top S&P 500 growth share and an ETF I’d buy this November!

I think this S&P 500 share and exchange-traded fund (ETF) could be brilliant additions to my ISA or SIPP right…

Read more »

US Stock

Here are the best-performing S&P 500 stocks after the US election result

Jon Smith notes some of the largest gainers from the S&P 500 yesterday and explains how the election result has…

Read more »

Growth Shares

2 UK stocks knocking on the door of promotion to the FTSE 100

Jon Smith points out a couple of UK stocks that he feels could be ready for the big league based…

Read more »

Investing Articles

Rolls-Royce shares just fell 7%. Is it time to buy?

This investor in Rolls-Royce shares takes a look at the FTSE 100 engine maker's trading update to see what caused…

Read more »