ASX shares are a great way for a beginner to start building their wealth.

Unlike property which takes tens of thousands of dollars to start investing, you can start with ASX shares with as little as $500.

Here are three ASX shares I’d buy as a beginner investor:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The easiest way to invest may be to just invest in the entire global share market in just one investment.

Vanguard is a world leader in providing exchange-traded funds. The idea is that Vanguard is owned by the investors and it shares its ‘profits’ by lowering steadily lowering fees.

This ETF is invested in over 1,000 businesses across the world. It’s invested in businesses like Alphabet (Google), Microsoft, Amazon, Nestle, LVMH, Unilever, SAP, Toyota and so on. It’s not focused on shares on the ASX. 

It’s the type of investment that could be your only investment for many years. It pays a decent dividend and only has a management fee of just 0.18%, which is very cheap for such a diversified product.

Future Generation Investment Company Ltd (ASX: FGX)

I think everyone should take an interest in Future Generation. It’s a philanthropic listed investment company (LIC) that donates 1% of its net assets each year to youth charities. It amounts to millions of dollars every year.

The LIC invests in fund managers who work for free for Future Generation. It’s a great system. It offers excellent diversification with how many different funds it’s invested in, which each represents a portfolio of ASX shares. The shares it’s invested in are generally smaller, so they have more growth potential.

I also like that the LIC has the potential to outperform when the market is falling with the cash it’s holding.

An attractive portion of the returns come to investors in the form of fully franked dividends from Future Generation.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital doesn’t invest in ASX shares, it invests in some of the best shares in the world like Visa and Mastercard.

Chris Mackay has expertly guided the globally-focused LIC to be one of the best performers over the past decade. I think MFF Capital can continue to be a long-term performer by the focus on quality and reasonable valuations.

MFF Capital is growth-focused, so I think it suits beginners well because you don’t need big income to start with.

Foolish takeaway

I think each of these ASX shares would be a good way for beginners to start investing with their diversification and solid historical performances. At the current prices I’m more drawn to MFF Capital and Future Generation than the Vanguard ETF.

More reading

• What ASX shares should you invest in during a bull market?
• Is the global share market in a bubble?
• Have $10,000? This is where I’d invest it into ASX shares
• Why it’s a good week to buy international shares
• Should your share portfolio actually be 50% cash right now?

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO and Magellan Flagship Fund Ltd. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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In my view, 2020 could be the perfect time to get a credit card. There’s a lot of economic uncertainty right now, which has been reflected in how volatile the S&P/ASX 200 Index (ASX: XJO) has been lately.

But before you start spending like crazy on the plastic, here are a few things to consider…

Why 2020 could be a good time for a credit card

I think one of the biggest advantages of using credit is keeping your money for longer. For instance, your card provider might afford you 60 or 90 days before payment is required.

That means your money could be sitting in a savings account or used elsewhere for those 90 days. It might seem like small amounts of money, but these can add up over time.

But the main reason why 2020 could be a good year for a credit card is the extra protection it can provide. When you pay on a debit card, that money is gone when you transact.

However, when paying on credit, the risk really remains with the credit provider. That could be especially helpful if you’re booking travel in 2020.

You might book a hotel or flight a few months ahead of time. If you pay by credit, and the hotel or airline cancels your booking, you could try and get a charge-back from the credit provider.

It’s a similar story with buying from retailers right now. If you pay by credit card and the retailer folds before you receive your goods, you have a better chance of getting your money back than if you paid by debit.

But… credit isn’t for everyone

The important thing with credit cards is to not overspend. That can be particularly hard to do when economic times are tough.

If you don’t trust your self control, paying by credit may not be the best option. Credit card debt can quickly spiral if you don’t have a good handle on your expenditure.

There’s also the potential fees involved. Reward programs and sign-up bonuses can be enticing, but a no-fee credit card could be a better option depending on your goals.

You could also look to dip your toe in the water with a service like Afterpay Ltd (ASX: APT) to see if you can control your spending without paying by debit card.

More reading

• Should you buy ASX shares or hold cash right now?
• Building a $100,000 portfolio with Afterpay shares and 3 other ASX companies
• What ASX shares should you invest in during a bull market?
• What the 10 largest companies in the world have in common
• Why is it so hard to outperform the ASX 200 index?

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. 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.

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Earning an income from traditional interest-bearing assets like term deposits is becoming increasingly difficult.

Right now, Westpac Banking Corp (ASX: WBC) is offering 1% per annum yields on 12-month term deposits. This is broadly in line with what other banks are offering.

This means that even if you invested $1 million into these term deposits, you’d only get $10,000 of income from them.

Fortunately, the Australian share market is home to a number of ASX dividend shares which offer vastly superior yields.

Three dividend shares which I think would be great as part of a balanced income portfolio are listed below. Here’s why I would buy them:

Dicker Data Ltd (ASX: DDR)

Dicker Data is one of my favourite ASX dividend shares. It is a wholesale distributor of computer hardware and software which has consistently grown its earnings and dividends at a solid rate for many years now. This looks set to continue in FY 2020 with management intending to increase its full year dividend by 31% to 35.5 cents per share. This represents a 4.5% fully franked dividend yield.

Rio Tinto Limited (ASX: RIO)

Another dividend share to consider buying is Rio Tinto. It looks well-positioned to deliver strong profits in the near term thanks to sky high iron ore prices and its world class and low cost operations. Last month analysts at Morgans suggested that Rio Tinto’s shares could offer a fully franked ~8.5% FY 2021 dividend yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A final option for income investors to look at is the Vanguard Australian Shares High Yield ETF. It invests in a wide range of high yielding dividend shares. This includes mining giants, the banks, and many other blue chip favourites. I like this exchange traded fund because of the diversity it gives investors. Which, as we have seen during the pandemic, is very important to have. I estimate that its units offer a forward dividend yield of at least 5%.

More reading

• ASX 200 closes higher, banks keep rising
• Brokers name 3 ASX shares to buy today
• ASX 200 down 0.35%: UBS upgrades NAB and Westpac, Qantas soars again
• Is the Westpac share price too high?
• Why today might be a good day to buy NAB and Westpac shares

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data 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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