If you’re lucky enough to have $50,000 in a savings account and no immediate use for it, then I think you should consider investing it into the share market with a long term view.

This is because you could turn these funds into a life-changing sum thanks to a combination of time and compound interest.

How is this possible?

As of the end of 2019, the Australian share market had provided investors with an average annual return of 9.5% over the last 30 years.

While we may not have started 2020 in a positive fashion, I remain confident that the local share market will deliver a similar level of return over the next three decades.

If this proves to the case, then a $50,000 investment could grow materially over the period.

For example, if you were to invest the $50,000 into the share market and earn the same return, you would have ~$125,000 in 10 years, ~$310,000 in 20 years, and then ~$760,000 in 30 years. That’s all from just a single investment.

If you’re happy with this potential return, then you could simply look to invest in 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.

Another option is the Vanguard Australian Shares Index ETF (ASX: VAS), which gives investors exposure to the 300 shares listed on the S&P/ASX 300 index.

What if you beat the market?

Now, imagine if you could outperform the share market by a small margin each year.

Instead of an average annual return of 9.5%, what would happen if you achieved a return of 11.5% per annum?

With this level of return, your $50,000 investment in 2020 would be worth ~$150,000 in 10 years, ~$440,000 in 20 years, and a massive ~$1.3 million in 30 years.

While beating the market is hard, it is possible. Shares like REA Group Limited (ASX: REA) and ResMed Inc. (ASX: RMD) have consistently beaten the market over the last 15 years and appear well-positioned to continue this trend over the next decade.

The key is identifying companies with strong business models, positive long term outlooks, and competitive advantages.

More reading

• 3 high quality ASX blue chip shares to buy in June
• 3 founder-led ASX shares to buy for strong long-term returns
• 3 investing secrets for success with ASX shares
• ASX 200 investor in your 40s? 3 shares to buy now
• I don’t normally buy ETFs, but I would buy these 2

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited and ResMed Inc. 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.

The post How to become a millionaire by investing in ASX shares appeared first on Motley Fool Australia.

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The BHP Group Ltd (ASX: BHP) share price has had a rollercoaster start to 2020. Shares in the Aussie iron ore miner are down 9.02% in 2020 but are still managing to outperform.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 12.70% from where it began the year.

The BHP share price has started to gain some momentum in recent weeks. It’s currently the largest ASX 200 share by market capitalisation and is valued at $165.5 billion.

But with all that’s happening in the global and domestic economy, is BHP a cheap share to buy right now?

Why the BHP share price could be cheap today

I think it’s fair to say I’ve never been a huge resources sector investor. I am bullish on the future of renewable energy and the role that graphite, manganese and aluminium can play in that future.

However, ASX resources shares can be tough to value. Anything that relies on commodity prices as the basis for its value is likely to be volatile.

We’ve seen the BHP share price fall as low as $24.05 on 13 March before rebounding strongly to its current $35.41 valuation. That’s good news for shareholders who managed to buy the dip but is the current price a bargain?

Iron ore prices are starting to rebound which is positive for BHP earnings. The group’s shares are currently yielding 6.02% but there’s no guarantees this will be maintained by the August earnings season.

I think the potential for an infrastructure boom is a big plus. If governments around the world look to infrastructure for stimulus, I’d expect the iron ore price to surge.

This could have a knock-on effect for the BHP share price and send it back towards its 52-week high of $42.33.

Foolish takeaway

There’s no such thing as a safe bet in ASX 200 shares and this is especially true at the moment. However, the BHP share price could be a solid large-cap with upside potential to help boost a diversified portfolio beyond 2020.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• This embattled ASX 200 company could be the next M&A target
• ASX 200 rises 0.3%, Zip rockets higher
• Why Coles and Woolworths shares were flat in May
• 3 long-term impacts of near-zero interest rates

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Is the BHP share price cheap right now? appeared first on Motley Fool Australia.

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Are you looking to add a few ASX blue chip shares to your portfolio in June? The good news is there are plenty of quality options to choose from right now.

To narrow things down, I’ve picked out three ASX blue chip shares which I believe offer compelling risk/rewards. They are as follows:

Goodman Group (ASX: GMG)

The first ASX blue chip share to consider buying is Goodman Group. I think the integrated commercial and industrial property group is a great option due to the strength and positive outlook of its portfolio. This is largely due to its exposure to industries benefiting from structural tailwinds like ecommerce. I expect these assets to be in demand for a long time to come and underpin solid earnings and distribution growth over the next decade.

ResMed Inc. (ASX: RMD)

ResMed is another ASX blue chip share which I would buy today. I think the medical device company is a great buy and hold option due to the proliferation of sleep apnoea. Education around this sleep disorder is increasing and looks likely to lead to greater numbers of diagnoses over next decade. This should mean that demand for ResMed’s industry-leading sleep treatment solutions continues to grow and drives strong earnings growth

SEEK Limited (ASX: SEK)

A final ASX blue chip share to consider buying is SEEK. I’m a big fan of the job listings company due to its market-leading ANZ business and its rapidly growing China-based Zhaopin business. While a lot of investor focus is on its ANZ business, I would argue that the real star is Zhaopin. In the first half it contributed 47.8% of total revenue. This compares to the ANZ business, which accounts for 25.6% of its revenue. Given how lucrative the China market is, I believe Zhaopin will underpin strong growth for many years to come once the crisis passes.

More reading

• How to become a millionaire by investing in ASX shares
• 3 founder-led ASX shares to buy for strong long-term returns
• ASX 200 investor in your 40s? 3 shares to buy now
• How you can get very rich with ASX 200 shares
• 10 quality ASX shares to buy in June

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended ResMed Inc. and SEEK 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.

The post 3 high quality ASX blue chip shares to buy in June appeared first on Motley Fool Australia.

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