If you have $50,000 in a savings account and no immediate use for it, I would suggest you consider investing it into the share market.
This is because if you have a long enough investment time horizon, the share market could turn these funds into a life-changing sum.
As of the end of June, the Australian share market had provided investors with an average annual return of 8.7% over the last 30 years.
This means that if you had invested these funds into the ASX in June 1990 and earned the market return, they would now be worth a sizeable $610,000.
If you can then earn the same return for a further six years, the power of compounding will turn these funds into a cool million dollars.
What about the future?
While nothing is certain, I feel confident the share market will generate a similar return over the next 30 years.
So, if you’re happy with this level return, then you could invest these funds into an exchange traded fund (ETF) that tracks the S&P/ASX 200 Index (ASX: XJO). The BetaShares Australia 200 ETF (ASX: A200) allows investors to do this.
There is also the Vanguard Australian Shares Index ETF (ASX: VAS) to consider. This ETF gives investors exposure to the 300 shares listed on the S&P/ASX 300 index.
But you don’t have to settle for that. The ASX 200’s 8.7% per annum return over the last 30 years is an average. This means some shares underperform it and others beat it.
If you’re looking for future market beaters, then I would suggest you look at investing in the likes of electronic design software company Altium Limited (ASX: ALU), artificial intelligence services provider Appen Ltd (ASX: APX), and biotherapeutics giant CSL Limited (ASX: CSL).
I believe these companies are well-positioned to grow their earnings at a strong rate over the next decade and beyond. This could lead to their shares generating market-beating returns, turning that $50,000 into something significantly larger.
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!
See how you can find out the name of this stock
Returns as of 6th October 2020
More reading
- 2 blockbuster blue chip ASX shares to buy
- ASX 200 finishes lower, Afterpay (ASX:APT) shares rise
- Here’s why Medical Developments (ASX: MVP) share price has soared 12% today
- My top 5 ASX growth shares to buy right now
- ASX 200 flat: Bank of Queensland impresses, CSL guidance update, AUSTRAC clears Afterpay
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 and recommends Altium. 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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