The idea of using the stock market to replace your salary and never have to work again sounds like a distant dream. But it’s one that’s increasingly within reach for everyday investors.

So how big does a portfolio actually need to be? And what’s the smartest way to build it?

Crunching the numbers

The average full-time salary in the UK currently sits at £39,039, according to the latest ONS data. That means to sustainably generate that as a passive income, following the widely-used 4% rule, an investor would need a portfolio worth around £975,975.

That’s a chunky sum. But here’s the thing, you don’t have to get there overnight. And for patient investors who start early, it’s more achievable than most people think.

Can a modest investor really get there?

A modest investor putting aside £500 a month and targeting the market’s long-run 8% average total return would reach that figure in roughly 33 years.

That’s obviously a long time. Yet for those willing to pick stocks directly and focus on quality compounders, that timeline can shrink considerably.

One stock that expert analysts have flagged as a high-conviction opportunity in May is 3i Group (LSE:III).

Fun fact: over the last decade, the FTSE 100 private equity giant has delivered an exceptional 22.6% annualised return. And anyone who’s been drip feeding £500 a month at this rate since 2016 is already sitting on £222,578. Give it another 10 years, and compounding would transform this into £2.3m!

These exceptional long-term returns are being driven by backing and growing businesses across Europe and North America. The most impressive has been Action, the discount retailer that has become one of the fastest-growing non-food retailers on the continent.

As 3i’s own management noted in its most recent results: 

“Action’s performance continues to exceed our expectations, with new store openings accelerating across Europe.”

That momentum has been a powerful engine for 3i’s net asset value and, by extension, its share price. But is the good news already priced in?

What could go wrong?

The bull case for 3i is hard to ignore. Action’s relentless store rollout shows no signs of slowing, with the business expanding into new territories and posting double-digit like-for-like net sales growth. For long-term investors, this is exactly the kind of quality compounder that can dramatically accelerate the journey towards financial freedom.

The bear case however, is equally real. 3i’s fortunes are heavily tied to one investment. If Action were to stumble, whether from a shift in consumer spending, rising competition, or execution mis-steps in new markets, the knock-on effect for 3i’s valuation could be severe.

There’s also the broader macro backdrop to consider. A global economic slowdown or tightening credit conditions could weigh on private equity valuations more broadly, even if the underlying businesses remain healthy.

The key question now is whether Action can maintain its remarkable growth trajectory as it pushes into new markets.

The bottom line

No passive income journey is risk-free. But for patient investors with a long time horizon, the stock market remains the most powerful wealth-building tool available.

Overall, I think 3i’s a compelling long-term compounder in the FTSE 100 right now. So for investors dreaming of ditching the 9-to-5, it’s a stock that’s worthy of a closer look.