If you want to become wealthy then you just need to do one main thing for your personal finances. Save.
The biggest difference for your money will be how much money you save. If you have enough income then it’s easier to save an extra $5,000 a year than it is to earn an extra 2% annual returns from your investments.
There are a number of good phrases when it comes to saving. “Live below your means”. “Spend less than you earn”. It’s true. It’s certain that you can make your money work harder by simply spending less, whereas investment returns are uncertain.
When you look at a compound interest calculator like the one from Moneysmart, you can see what a difference it makes. Let’s assume your investments return 10% per annum no matter how much you invest. Over 20 years if you invest $750 a month you end with $569,000. If you invest $1,000 a month you get $759,000 after 20 years. It’s clear how becoming wealthy can be decided by how much you save.
The coronavirus is certainly causing a lot of difficulty at the moment. But if you’re able to keep saving during this time then investing into shares is a really good thing to be doing right now.
How saving can help your investing to become wealthy
Your long-term returns can be boosted when you buy assets at cheaper prices. Good saving allows you to buy more of those assets. Exchange-traded funds (ETFs) like BetaShares Australia 200 ETF (ASX: A200) and Vanguard Australian Shares Index ETF (ASX: VAS) are now much cheaper than they were a few months ago.
High-quality long-term ASX shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES) and Brickworks Limited (ASX: BKW) are also at attractively cheaper prices and can help you become wealthy over time.
Here are some of the best shares you could be thinking about for your portfolio.
5 Cheap Stocks With Massive Upside Potential
Our experts at The Motley Fool have just released a FREE report detailing 5 shares you can buy now to take advantage of the much cheaper share prices on offer.
One is a diversified conglomerate trading 40% off it’s all time high, all while offering a fully franked dividend yield of over 3%…
Another is a former stock market darling that is one of Australia’s most popular and iconic businesses. Trading at a significant discount to its 52-week high, not only does this stock offer massive upside potential, but it also trades on an attractive fully franked dividend yield of almost 4%.
Plus, this free report highlights 3 more cheap bets that could position you to profit in 2020 and beyond.
Simply click here to scoop up your FREE copy and discover the names of all 5 cheap shares.
But you will have to hurry because the cheap share prices on offer today might not last for long.
Returns as of 7/4/2020
More reading
- These 3 ASX 200 retail shares are absolutely thriving right now
- 3 high quality ASX shares for a retirement portfolio
- 3 of the best ASX dividend shares for income
- Where I’d invest $1,000 into ASX shares right now
- ASX 200 Weekly Wrap: New ASX bull run continues
Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. 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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