I think the ASX share market is a great way for investors to build wealth. It’s possible for some investments to grow significantly. People can use that to make hundreds of thousands of dollars, or perhaps even $1 million.

Of course, nothing is certain in the share market. For starters, volatility can throw up a lot of uncertainty and cause large swings over a short time period.

Plus, just because a business is doing well now doesn’t mean it will be doing well in five years or ten years.

But, if we can identify the ones that have a long growth runway and are executing well on their goals then they may be able to achieve large financial gains.

I’ve picked out three names that I think could produce great compounding returns over the next decade. If I invested $50,000 in each of them and held for the long term, I’d hope to be able to reach $1 million with ASX shares.

Vaneck Morningstar Wide Moat ETF (ASX: MOAT)

This is one of my preferred exchange-traded funds (ETFs). It enables investors to buy a group of US-listed businesses that have strong economic moats. In other words, the businesses are rated as having strong competitive advantages.

Competitive advantages can come in many different forms, including intellectual property, brand power, cost advantages or other forms of an economic moat.

But, the portfolio only invests in those businesses when Morningstar analysts think it’s trading at an attractive price.

This investment style has led to the index that the ETF tracks to return an average return per annum of 19.2% over the last decade to March 2023 and 17.1% per annum over the past five years.

Past performance is not a guarantee of future results at all, particularly if we’re talking about returns of more than 15% per annum. But, without a working crystal ball and for the fun of doing the calculation, if the $50,000 were to grow at 17% per annum over the next decade, then it could turn into approximately $240,000.

Airtasker Ltd (ASX: ART)

Airtasker is a very different company from the sorts of businesses that Vaneck Morningstar Wide Moat ETF invests in. It’s another one I’d choose for a $50,000 investment.

The ASX share offers a platform that allows users to advertise a task that needs doing. That task could be almost anything – furniture assembly, accounting, photography, removalists, painting, food delivery and so on.

It’s a small business with a market capitalisation of around $100 million. I’m looking at it as an idea that could grow significantly. Just growing to a $1 billion valuation would mean the business is ten times bigger, which could mean the $50,000 investment growing to $500,000, assuming the Airtasker share count doesn’t change much.

How likely is Airtasker to achieve that growth?

I think the company has a lot to like about it. It has a gross profit margin of more than 90%, which means that a large majority of new revenue turns into gross profit, which can be used to invest for further growth, such as marketing or product development. Its software-based operating model also means that it doesn’t take much capital to grow.

It’s targeting the very promising and large markets of the United States and the United Kingdom. Airtasker is growing quickly.

In the FY23 half-year result, trailing 12-month (TTV) UK gross marketplace volume (GMV) saw 83% growth year on year to £3.5 million, while UK revenue rose 153% to £0.4 million. US posted tasks grew 5.5x year over year to 34,000, with tasker offers up 9.4x year over year to 54,000. Total organic revenue grew 23% to $17.1 million.

If the ASX share can keep growing revenue, then I think it can keep re-investing and growing strongly.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa is a retailer of affordable jewellery with a global network of stores. It has a sizeable position in Australia, France, Germany, the UK, South Africa and the US. This is the third pick I’d invest $50,000 into for growth.

But, I think the company has plenty of potential to add a lot more stores in France, Germany, the UK and the US.

There are also some very promising markets that Lovisa has only recently entered into, where it only had a small number of stores (less than five) at the time of the FY23 half-year result. These include Canada, Mexico, South America and Hong Kong.

I believe there is huge potential for this company to roll out hundreds, if not thousands, of new stores across the world, particularly if it’s able to successfully expand into India and mainland China.

I think the ASX share’s profit can grow significantly in the coming years, which will enable the Lovisa share price to keep climbing.

There’s also the potential that the business could decide to increase its addressable market with an offering of more expensive jewellery, perhaps with a different brand. But, that’s not a core part of my thesis.

Not only could the profit grow, but Lovisa’s dividend could also keep growing too, which would add to the wealth-building effect.

The post Want a possible $1 million in retirement? Invest $50,000 each in these 3 ASX shares and wait a decade appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker. The Motley Fool Australia has recommended Lovisa and VanEck Morningstar Wide Moat ETF. 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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