Becoming a millionaire isn't out of reach, you know. It really takes just three things:

  • Some money to invest
  • An effective growth rate for your money
  • Time

Let's say that you're a relatively aggressive investor and you can sock away $10,000 per year into the stock market. Here's how long it will take you to become a millionaire, and the average growth rate you'll have to achieve:

Time

Growth rate

10 years

41%

15 years

22%

20 years

14%

25 years

10%

30 years

7%

35 years

5.5%

40 years

4.25%

Pretty interesting, eh? If you have enough time, you might almost reach millionairedom via a simple savings account or CD! But most of us don't have 40 years. So, let's look at what we can do in 20 or 25 years. We'll need to earn average returns in the 10% to 14% range. (Remember, saving and investing more means you won't have to earn as high a return -- or that you will end up with more money.)

The stock market, on average, has returned about 10% annually over many decades, though in your particular investing period, it might end up averaging more or less. You can aim to beat that with carefully chosen individual stocks. Below are some examples that popped up when I screened at our CAPS community of investors for large-cap stocks with returns on equity (ROE) of 15% or more, dividend yields of 2% or more, and CAPS star ratings of four or five (out of five). See how some of them have grown over time:

Company

CAPS Stars

Dividend Yield

ROE

20-Year Average Return

Johnson & Johnson (NYSE:JNJ)

*****

3.6%

29.4%

13.9%

McDonald's (NYSE:MCD)

****

3.4%

34.3%

12.5%

PepsiCo (NYSE:PEP)

*****

3.5%

42.7%

11.6%

Caterpillar (NYSE:CAT)

****

4.7%

40.5%

11.0%

3M (NYSE:MMM)

*****

3.6%

29.5%

9.3%

Sources: Motley Fool CAPS, Yahoo! Finance.

Bad -- and good -- news
Of course, while these terrific companies turned in great results, many other terrific companies didn't fare quite as well. The 20-year average return for Alcoa (NYSE:AA), for example, is 3.2%, and for Boeing (NYSE:BA), it's 7.1%. That just goes to remind us that it's important to spend time picking your stocks carefully.

Fortunately, if you don't have the time, interest, or skills for that, you're not out of luck. You can have someone else do your stock-picking for you -- a mutual fund manager! There are many funds with market-beating records that can serve you well. Consider, for example, the FBR Focus (FBRVX) fund, which has outperformed its benchmark index handily over the past decade, averaging 8% annually. (Its recent top holdings: American Tower and Markel.) The Vanguard Health Care (VGHCX) fund has averaged nearly 16% over more than 20 years. So don't think that some great performances aren't possible from funds.

Just as some terrific stocks can make you a millionaire over time (even in today's volatile market), so can some great mutual funds -- with a lot less pressure placed on you.

So, look for funds on your own, avoiding sales loads if you can, and finding managers who have been at the helm for more than a year or two and whose philosophies and approaches you respect. In addition, look for low fees, and ideally, low turnover. Or, let us help you by doing much of the legwork for you.

I invite you to check out our Motley Fool Champion Funds newsletter, which is where I've gotten some good leads myself. Try it for free and see which funds have been recommended -- and why. Together, our picks have been beating the benchmark indexes by some six percentage points. Stock funds, balanced funds, small-cap funds, foreign funds, bond funds, value funds, funds for your 401(k) ... you name it, and we've got some for you, whether you're an aggressive or a conservative investor, or somewhere in between.

Longtime Fool contributor Selena Maranjian owns shares of Johnson & Johnson and 3M. 3M is a Motley Fool Inside Value recommendation. Johnson & Johnson and Pepsico are Motley Fool Income Investor selections. The Motley Fool is Fools writing for Fools.