That nest egg is closer than you think.
I'm fond of what I call 'fire-and-forget' ways of wealth-building -- regular sums invested in low-cost, tax-efficient investments. Over the years, it's a practice that's stood me in good stead, as a quick glance at my portfolio of investments regularly confirms.
£100 a month, for instance, put in a low-cost index tracker delivering a reasonably modest 6% return after charges, will grow to £69,646 over 20 years.
While that's not a life-changing sum, it's still not to be sneezed at. Put aside more each month, and the rewards will be commensurately higher.
And while ISAs are the tax-efficient wrapper of choice for many, SIPPs -- if appropriate for your circumstances -- can help your nest egg grow even faster.
Years back, there were fewer ways to carry out this kind of fire-and-forget investing than there are today.
The enticing advertisements were there, of course. But the prosaic reality was often high-cost unit trusts, generally with upfront charges -- or, worse, costly and opaque insurance-based products such as endowment policies.
These days, we've got tax-efficient wrappers such as ISAs and SIPPs, technology-driven fund supermarkets and share-trading platforms to drive trading costs down, and a reasonably rich choice of investments to plump for.
And so, without further ado, here are three of my favourite ways to use fire-and-forget investments to build your wealth.
Let's start with shares. When making small but regular purchases, the killer is commission. £11.95 on a £100 purchase, for instance, doesn't make much sense.
Thankfully, a number of brokers offer a 'share builder' service, where you can buy a share on, say, four set 'dealing days' each month. Your purchases are pooled with those of other buyers, which brings the cost down.
Here on the Motley Fool Share Dealing service, for instance, 'share builder' purchases cost just £2.00 -- low enough to make even a purchase of £100 worth of shares cost-effective.
Bigger monthly sums will be proportionately more cost-effective, of course, but there's nothing wrong with investing £100 a month this way. Better still, invest every month -- but buy every other month, or every third month.
Buying individual shares isn't for everyone. Some people prefer the in-built diversification of collective investments such as funds and investment trusts.
Investment trusts, with their lower charges, are a particularly Fool-friendly form of fire-and-forget investing.
The names of some of these venerable investments may be a little quaint, but there's no arguing with their resilience: some trusts date from the mid- to late-1800s, and have a history of annual dividend increases that approaches 50 years.
Better still, some investment trusts offer share-buying plans -- inside an ISA, or outside an ISA -- that offer investors a way to buy their shares either without paying commission at all, or on payment of a very small commission.
The eight investment trusts managed by Baillie Gifford, for instance -- including its popular Scottish Mortgage (LSE: SMT) and Monks (LSE: MNKS) investment trusts -- can be bought entirely commission-free through a monthly savings plan.
Here's a fuller list of which trusts are available on monthly savings plans, and details of the appropriate charges.
Index trackers are another Fool-friendly investment. Low-cost bundles of shares representing major stock market indices, buying a tracker gets you exposure to indices such as London's flagship FTSE 100, the FTSE All-Share and the FTSE 250.
Where to buy? Many tracker providers offer low-cost regular savings schemes directly, usually within an ISA wrapper if required.
So do low-cost brokers and fund supermarkets, too -- although in the case of some brokers, you'll be buying an ETF, rather than a fund-based tracker.
Watch out, though, for the £2 per month platform fee levied by popular broker Hargreaves Lansdown (LSE: HL), which in my view makes a start-from-zero low-cost tracker investment uneconomic, unless the sums involved are fairly hefty.
Which tracker? Start with some of these, and you won't go far wrong.
So there we have it: three easy, low-cost and very effective ways of building wealth.
And even in these difficult economic times, the minimum monthly investments involved are so small that most of us can find the cash to put something extra aside -- even if we've other investment priorities elsewhere.
What's holding you back?
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> Malcolm holds shares in Scottish Mortgage Trust. The Motley Fool owns shares in Hargreaves Lansdown.