One thing I think most Australians will share, is the dream of becoming wealthy one day.
While you could achieve this by winning the lottery, it is worth remembering that the odds on you actually winning are extremely slim.
In light of this, if you want to become rich, I think you need to take matters into your own hands.
How can you become rich?
I believe that investing in the share market with a long term and patient strategy is arguably the most effective way of building wealth.
This is because if you invest over a long period, you will benefit from the magical power of compound interest. This is what happens when you earn interest on top of interest or returns on top of returns when it comes to shares.
It explains why a $10,000 investment earning a 10% return will be worth $11,000 after one year, but almost $26,000 after 10 years.
Compound interest will then turn that $26,000 into a massive $67,000 after 10 more years and then $175,000 after 10 more.
And that’s just a single investment, let’s not forget. Investing what you can each year would compound into materially more over the same period.
Which shares would be good options for long term investments?
If you’re wanting to make a successful buy and hold investment, then I believe you should be looking at companies with strong business models and long runways for growth.
A prime example of a quality buy and hold option is biotherapeutics giant CSL Limited (ASX: CSL). I believe it is well-placed to be a market beater due to its world class businesses, leading therapies and vaccines, and lucrative research and development pipeline.
Another company to consider is artificial intelligence services company Appen Ltd (ASX: APX). Its team of experts prepare the high quality data that goes into the machine learning models of some of the biggest technology companies in the world.
It has worked with Facebook and Google and also with Apple on its Siri virtual assistant. Due to the growing importance of artificial intelligence and its leadership position in the market, I believe it is well-placed for growth over the 2020s.
All in all, I think these two ASX shares would be a great place to start on your quest to becoming rich through investing.
This Tiny ASX Stock Could Be the Next Afterpay
One little-known Australian IPO has doubled in value since January, and renowned Australian Moonshot stock picker Anirban Mahanti sees a potential millionaire-maker in waiting…
Because ‘Doc’ Mahanti believes this fast-growing company has all the hallmarks of genuine Moonshot potential, forget ‘buy now pay later’, this stock could be the next hot stock on the ASX.
Doc and his team have published a detailed report on this tiny ASX stock. Find out how you can access what could be the NEXT Afterpay today!
Returns as of 6th October 2020
James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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