Becoming a stock market millionaire is an investment objective shared by many investors. After all, who doesn’t love the idea of having a seven-figure portfolio and the financial freedom it provides?
Obviously, joining the top-5% of British wealth owners is no easy task. But it’s not as impossible as many might think. And following a strategy as simple as investing consistently in high-quality companies each month might be all that it takes for patient individuals.
The journey to £1m
Sticking with low-cost index funds is arguably one of the best ways to start putting money to work. These clever investing vehicles automatically diversify a portfolio and match the performance of the stock market with next to no effort.
Historically, that’s translated into an average annual return of around 8% a year. So, providing this continues to be the case moving forward, consistently investing £500 each month will allow investors to enter millionaire territory within around 34 years when starting from scratch.
| Starting Capital | Time To £1m With £500 Per Month At 8% |
| £0 | 33.5 Years |
| £10,000 | 32 Years |
| £20,000 | 30.5 Years |
| £50,000 | 27 Years |
| £100,000 | 23 Years |
Even when starting off with a chunky lump sum, the journey towards a seven-figure portfolio is a lengthy one. And it may take even longer than expected should the stock market decide to throw a tantrum along the way. After all, 30 years is more than enough time for multiple crashes and corrections to materialise.
So one way to speed things up is by simply investing more each month. But for those unable to spare any additional funds, stock-picking could be the silver bullet to accelerating the wealth-building process.
The power of stock picking
By allocating capital exclusively to individual businesses with wide competitive moats and ample long-term growth prospects, a portfolio can go on to vastly outperform. A perfect example of this over the last 15 years is Rightmove (LSE:RMV).
Today, Rightmove is the largest online property portal used by home buyers and sellers across the country. But that wasn’t the case back in 2010. And investors who spotted the potential for such a service have reaped an annualised return of 18.4%.
To put this into perspective, investing £500 each month at this rate cuts the journey to reaching £1m down to just 19 years when starting from scratch.
| Starting Capital | Time To £1m With £500 Per Month At 18.4% |
| £0 | 19 Years |
| £10,000 | 18 Years |
| £20,000 | 16.5 Years |
| £50,000 | 14 Years |
| £100,000 | 11.5 Years |
Still worth considering in 2025?
Rightmove controls more than 80% of the online property marketplace. And even with fierce competition emerging, the power of its network effect has so far prevented it from being disrupted. Pairing that with growing demand and chunky profit margins suggests that Rightmove’s days of delivering market-beating returns aren’t over.
Of course, there are never any guarantees. Rightmove is highly sensitive to the cyclical property market. During downturns, the group may be forced to slash the price of its marketing packages. This could impair both growth and earnings, sending shares firmly in the wrong direction – an opportunity that its growing list of competitors may take advantage of.
Having grown substantially, it’s unlikely that Rightmove will continue generating an 18.4% annualised return indefinitely. So, investors hunting these sorts of gains will have to search for other promising stocks that have yet to take off. However, Rightmove’s growth story isn’t over yet, that’s why I think its still worthy of a closer look.
