The purpose of buying a million by buying 7 or 8 well-known stocks? Here it is!

The prospect of becoming a stock market millionaire can seem exciting, but it doesn’t have to be difficult. In fact, I think a person can be targeted for a million simply by buying and holding a limited number of shares of a good and established receiver for a long time.

All you need to go from zero to a million

If one really wants to become a stock market millionaire, one needs not only ambition but also an effective plan.

Just wearing a few and hoping to stumble upon another share that was close to a generation won’t cut the mustard, I see.

Not only is a proper investment plan needed – so is the capital. It takes money to make money.

That said, while you may be starting from scratch, a general pregnancy plan is a useful tool for providing investment capital.

Everyone’s financial situation is different and that will affect whether an individual can invest in their joint account or stocks and get it right. But the short of it is, it’s where the deposit is, the faster one can aim for a million.

Why doing less can achieve more

Imagine that an investor puts in £800 every month and was able to increase the value of his portfolio at a compound rate of 5% every year by investing in 50 high-yielding stocks.

To make that target a million, the investor will open the champagne after 38 years.

But imagine if they only bought the best performing 7 or 8 of those 50 stocks and it got a 10% annual growth rate. They would be a billionaire in 26 years. For 15%, it may take just a few decades.

How top stocks perform will vary over time. But the same principle always applies: few stocks perform better in any group (say, the Ftse 100) The given time will exclude others.

That would speed things up, maybe a lot, like on the way to a million.

That’s just simple math. What’s not so easy, alas, is knowing (or making a good guess) which stocks will be the top performers at any given time.

Going Big, or Best

Most investors know the difference between finding what sounds like a really good opportunity and a great one. The Great Are Rare: Warren Buffett Pins Most of His Success to “about a dozen good decisions“For many years.

So it can feel tempting to invest in good opportunities. But Buffett’s strong performance comes from being patient and going for bright opportunities in a big way.

As an example, consider ExxonMobil (Nyse: xom).

I expect demand for oil and gas to remain high. For decades people have been talking about the use of the fall – and I see that as a risk – but so far it has been tolerated, as the global population increases.

Exxon is well positioned to benefit from this. It has a more focused portfolio than some competitors, outstanding assets, and a proven business model over many decades.

In fact, not only has it proven its business for decades, the great power has grown its division every decade for decades.

This thing, although I think it’s a big business the share price doesn’t strike me as cheap. So, for now, I’m watching without buying.