Ever thought about retiring as a millionaire? The ravages of inflation means a million pounds does not go as far as it used to – but it could still make for a much more comfortable retirement. Something many people do not realise is that this does not require a lottery win or striking it big in the stock market. Drip-feeding money in to well-known FTSE 100 blue-chip shares over the long term could be enough on its own for someone to build a seven-figure portfolio.

Slow and steady over the long term

FTSE 100 shares are not necessarily the best companies from an investment perspective.

Many are already large and mature, meaning their growth prospects could be small or non-existent.

With 100 companies in the index, inevitably some will do poorly over time.

So, what is the appeal?

I see it as a question of balancing potential rewards with risk tolerance. While the FTSE 100 may not be stuffed with racy growth options, it does offer access to sizeable, well-established businesses that typically have proven commercial models and staying power.

Over time, that can be a rewarding set of companies in which to invest.

Investing for the decades to come

For example, imagine someone puts £500 per month into a Stocks and Shares ISA and compounds it at 5% annually.

After 41 years, the ISA will be worth over £1m. Yes, that is a long-term timeframe – but it means that for under £20 a day, somebody could realistically aim for a million.

Is a 6% compound annual growth rate realistic for a diversified cross-section of FTSE 100 shares (or, say, an index tracker)?

I think so. At the moment, the index yields around 3.1% from dividends, and I reckon an additional compound annual gain of 3% or so in share price over the long term is feasible.

Building a hand-selected portfolio

As I mentioned above, one approach would simply be to ‘buy the index’ by investing in a tracker fund.

Personally I do not do that, instead preferring to try and choose specific FTSE 100 shares that I think have strong long-term potential.

Of course, even good businesses can go through bad patches, so rather than plumping for a single such blue-chip share, I diversify my portfolio across a few different ones.

One share I reckon investors ought to consider right now is insurer Aviva (LSE: AV).

Thinking about the future

With its 6.2% dividend yield, the FTSE 100 firm could potentially meet the 6% target I mentioned above.

I say potentially because there are a couple of caveats.

Dividends are never guaranteed at any company. Indeed, Aviva cut its payout sharply in 2020.

Another caveat is share price gain potential. Aviva’s share price is up 56% in five years, slightly beating the FTSE 100’s 51% gain. But past performance is not necessarily an indicator of what to expect in future.

As the UK’s largest general insurer, Aviva faces the risk that smaller rivals could try to build market share by competing on price, costing it either market share or profitability.

Still, that scale is also an advantage. The FTSE 100 company is well-established, with deep insurance expertise and a large customer base. I regard those as strong competitive advantages.