One advantage of investing in your 20s is that you can afford to take higher risks.
This doesn’t mean you should start day trading your savings away, it just means you can invest in companies which might not be suitable for investors approaching retirement.
This is because if you’re in your 20s, you have a lot of time to recover your losses if things don’t go to plan.
Another advantage of investing in your 20s is the ability to benefit greatly from compounding.
For example, a single $10,000 invested in the share market and earning a 9% return would grow to be worth ~$23,700 in 10 years. Whereas in 40 years it would be worth a massive ~$315,000.
If you can then afford to invest $5,000 into the share market each year after year one (and earn the same return), you’ll have amassed a fortune of $2.15 million at the end of year 40.
That certainly is a nice nest egg to retire on, with only a very limited outlay each year.
With that in mind, here are three top ASX shares I think could be good options for investors in their 20s:
Afterpay Ltd (ASX: APT)
The first share that I think investors in their 20s ought to consider buying is this payments company. I believe it is well-positioned for growth over the next decade thanks to the growing popularity of buy now pay later with consumers and retailers and its international expansion opportunity.
Bubs Australia Ltd (ASX: BUB)
Another option to consider is Bubs. It is a goat’s milk-focused infant formula and baby food company which has been growing its top line at a rapid rate over the last couple of years. Pleasingly, I believe it still has a long runway for growth. Especially given its growing distribution footprint online in China and offline in Australian supermarkets.
Pushpay Holdings Group Ltd (ASX: PPH)
A final option to consider is Pushpay. It is a provider of a donor management system, including donor tools, finance tools, and a custom community app to the faith sector. It has been growing at a rapid rate thanks to its leadership in a niche but lucrative market. I believe can continue its growth over the coming years thanks to its sticky product, the shift to a cashless society, and its industry-leading software.
We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.
And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!
*Extreme Opportunities returns as of June 5th 2020
More reading
- These are the 3 reasons I own Pushpay shares
- Is the Pushpay share price too high to buy?
- 3 top ASX growth shares to buy for FY21
- 10 high quality ASX shares to buy in FY 2021
- Invest $50 per day in ASX shares to generate a $50,000 passive income
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 BUBS AUST FPO and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended BUBS AUST FPO and PUSHPAY FPO NZX. 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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