Millennials: how to get a £1 million investment portfolio by 2050

If 2020 is your year to learn more about investing, and to actually make a start, achieving a £1 million pot in just 30 years may not seem like an achievable goal.

If you’re simply saving your money in cash, you would have to save £33,333 a year, or £2,778 a month. Probably not realistic for most.

But what if I told you it is possible with significantly smaller monthly amounts – thanks to compound interest and taking a bit more risk? I had a look to find out which Elite Rated funds might rise to the challenge.

“Investing is laying out money now to get more money back in the future.” – Warren Buffett

Investing for the long term

While the idea of a thirty-year investment for some is slightly overwhelming, it is a good time period to look at because, for myself and many other millennials, it’ll bring us right into retirement age. And while I don’t relish the thought of being 57 (ancient!), a million pound investment portfolio heading into retirement doesn’t sound awful.

It started me thinking: what could I afford to put into the portfolio over the period? The average pay for a millennial worker in the UK is around £23,700. A while ago a colleague told me that a good way to split your salary is one third on rent or mortgage, one third on bills and going out and one third on savings.

Taking that into account, I looked to see which Elite Rated could help me reach the £1 million mark with £700 invested a month.

Only two Elite Rated funds have managers going back thirty years: ASI Emerging Markets Equity (33 years) and EdenTree Amity UK (32 years). Had someone my age invested £700 a month in the latter 30 years ago, it would have got them very close to the goal line with a pot of money worth £908,806.59*. ASI Emerging Markets Equity however, would have surpassed the goal: it would have produced a pot of month worth £1,056,566.78** after 30 years – with monthly contributions as low as £500 a month.

I decided to broadened my search to find out which Elite Rated funds – that had been in existence for 30 years but had been run by different managers – returned £1 million pounds or more over 30 years, and which one had required the smallest investments to achieve that goal: the winner was Jupiter European. Monthly savings of just £275 were required to get to millionaire status***. Now that is very doable!

Elite Rated funds that returned £1 million or more over 30 years

Fund NameMonthly investmentTotal returns
Jupiter European£275£1,079,923.68***
Janus Henderson European Selected Opportunities£450£1,120,257.23****
Baillie Gifford Shin Nippon£450£1,011,879.82****
ASI Emerging Markets Equity£500£1,056,647.17**
Schroder Income£550£1,037,292.62^
Baillie Gifford Japanese Smaller Companies£550£1,033,557.23^^
Investec UK Special Situations£600£1,080,603.56^^^
BMO Responsible Global Equity£650£1,063,377.45^^^^
Marlborough European Multi-Cap£650£1,021,349.59^^^^
Legg Mason IF Martin Currie European Unconstrained£700£1,006,719.03*^

And of course, the million pound question: could you achieve £1 million in just 20 years? One Elite Rated fund would get you there with £700 a month contributions: Scottish Mortgage Investment Trust returns £1,058,071.66*^^ – although TR Property Investment Trust almost gets you there at £958,969.11*^^ over the same period.

Learn more about how investments trusts could make you a millennial millionaire

*Source: FE Analytics; regular savings, £700 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
**Source: FE Analytics; regular savings, £500 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
***Source: FE Analytics; regular savings, £275 month, 31 Jan 1990 – 31 Dec 201, total returns in sterling
****Source: FE Analytics; regular savings, £450 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
^Source: FE Analytics; regular savings, £550 month, 31 Jan 1990 – 31 Dec 2019
^^Source: FE Analytics; regular savings, £550 month, 28 Feb 1990 – 31 Dec 2019 (previous month data not available), total returns in sterling
^^^Source: FE Analytics; regular savings, £600 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
^^^^Source: FE Analytics; regular savings, £650 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
*^Source: FE Analytics; regular savings, £700 month, 31 Jan 1990 – 31 Dec 2019, total returns in sterling
*^^Source: FE Analytics; regular savings, £700 month, 31 Jan 2000 – 31 Dec 2019, total returns in sterling

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Remember, all investments can fall in value as well as rise, so you could make a loss. Before you make any investment decision, make sure you’re comfortable and fully understand the risks.Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.