Do you want to be a millionaire? Investing £500 a month in FTSE shares is what it might take

Many people dream of becoming a millionaire, however not many realize that by investing early in FTSE shares, even a modest investor can make this dream come true.

By leveraging the compounding benefits of the stock market, staying focused on short-term volatility, and being patient, great wealth can be accumulated. And best of all, it can be enjoyed completely tax-free if you use instruments such as a Stocks and Shares ISA.

Here is the way.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content of this article is provided for informational purposes only. It is not intended to be, and does not constitute, any form of tax advice. Students are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

Aim for financial freedom

To target £1m, investors in 2026 need three things:

1. £500 a month from their salary to invest.
2. A sound investment strategy.
3. Patience.

Instead of chasing high-risk penny stocks, new investors should focus on established businesses with long-term competitive advantages and adequate cash flow. Fortunately, the FTSE 100It is full of such businesses. And one of the easiest ways to start building wealth is with a low-cost index fund.

Historically, the UK stock market has returned around 8% per annum, including gains over time. And assuming this pattern continues, investing £500 a month at this rate will gradually add up to seven people’s property over 34 years.

So for those who have just turned 30, now would be a good time to start investing to ensure a comfortable retirement. But what if someone is late to start and doesn’t have thirty and a half decades left?

Option one: increase monthly contributions. Doubling the amount to £1,000 shortens the timeline by eight years.

Sadly, not everyone is able to keep a large amount of money out of their monthly payments. This is where the second option comes into play.

Improving stock market recovery

Instead of relying on index funds, investors can choose to invest directly in individual stocks on the FTSE. Implementing a stock picking strategy is a more involved process and requires more self-discipline. But if done correctly, the results can be disastrous.

A perfect example of this JD Sports Fashion (LSE: JD.). Through smart partnerships with top sports brands, this apparel giant quickly expanded its footprint, positioned its stores as cultural hubs, and created a sticky customer culture.

Over the past 20 years, investors who have backed the business while continuing to make returns averaged 4,400%. That equates to a 21% annual return. And anyone who has been on the drip eating £500 a month since 2006 is now sitting on close to £1.8m!

Still worth considering?

Despite its long-term performance, since the beginning of 2022, JD shares are actually stuck on a downward path. A strong consumer spending environment, accompanied by an inventory glut from its main counterpart Nike, had a negative impact on its finances.

But could this create a new opportunity for new investors to buy?

With a new CEO at the helm of Nike, inventory levels are starting to normalize. And with the 2026 FIFA World Cup just around the corner, JD Sports Fashion looks well-positioned to capitalize on both of these routes. However, with Nike products still approaching half of JD’s sales, a prolonged or failed product overhaul could see the UK stock suffer even further.

With a discounted valuation, this business may still be worth a closer look. But fortunately, there are also many other FTSE stocks with exciting long-term potential.