There is no doubt that the downturn in overseas travel has been devastating to our local travel industry. Many of our leading ASX travel shares have seen their share prices plummet in recent months as bans on international travel have kicked in.

Data just released by the Australian Bureau of Statistics (ABS) indicates that overseas arrivals in Australia in April 2020 were down by 99% compared with April 2019.

Devastating impact on ASX travel shares

Since 20 February, Australia’s major airline Qantas Airways Limited (ASX: QAN) has seen its shares decline by a massive 47%. Qantas recently secured a further $550 million in funding against 3 of its aircraft, following a $1.05 billion raising in March.

The COVID-19 impact on its major competitor Virgin Australia Holdings Ltd (ASX: VAH) has been even more devastating, with Virgin shares falling heavily in the months before the company entered voluntary administration in April.

The travel booking sector also has been hit savagely, as both international and domestic flight bookings have dried up. Corporate Travel Management Ltd (ASX: CTD) has seen a partial rebound in its share price since mid-March to now be down around 30% since 20 February.

Unfortunately, the same can’t be said for Webjet Limited (ASX: WEB), which is down 67%, and Flight Centre Travel Group Ltd (ASX: FLT), which is down by 71%, in the same period. Both Webjet and Flight Centre were forced to undergo capital raisings to boost liquidity and try to ensure they come out of the crisis in a sound financial position.

Sharp decline in April part of a downward trend

The ABS revealed that over two-thirds of the 22,000 arrivals in April were citizens returning from overseas, while just under 7,000 arrivals were non-Australian citizens.

The ABS further noted that the decreases in arrivals and departures during April were part of a continuing downward trend that has been evident in the past few months since travel restrictions were first put in place by the Australian government at the beginning of February.

When will international travel pick up again?

It is quite possible that domestic travel could gradually start to pick up in the months ahead as the government begins to ease lockdown restrictions. However, the chances of international travel getting back to normal to any significant degree before the end of this year are highly unlikely.

While the Australian government hasn’t made any official comments, the most likely first step for international travel will be for flights to resume between Australia and New Zealand, with travel between Australia and other countries introduced further down the track when the outbreak of the pandemic globally is more under control.

More reading

• ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation
• Regional Express soars 45% higher amid plans to take on Qantas and Virgin Australia
• The smartest ASX shares to buy if you have $2,000
• Why Afterpay, Flight Centre, Mesoblast, & Sezzle shares are dropping lower
• 3 top ASX 200 shares you can buy on sale today

Motley Fool contributor Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group 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 ABS reveals overseas travel arrivals plummeted a massive 99% in April appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3fMc3Nk

I think it’s very possible to build good wealth with small investments. You just have to utilise the power of compound interest.

If you think you need to invest hundreds of thousands of dollars to build good wealth then you’d be mistaken.

There are great calculators out there that help you calculate how much you can build your wealth in the coming years and decades.

According to Moneysmart, if you invest $500 every month for 20 years and the share market grows at 10% a year then you’d finish with $380,000. That’s not millionaire status, but investing $6,000 a year is fairly achievable for most households. That’s not increasing the monthly $500 investment at any point.

Imagine if you were 25 and had 40 years to compound your wealth to retirement instead. You’d end up with over $3.1 million.

What ASX shares would be helpful for building good wealth?

You could go for good exchange-traded funds (ETFs) that provide diversification and have cheap fees like BetaShares Australia 200 ETF (ASX: A200), iShares S&P 500 ETF (ASX:IVV) and iShares S&P Global 100 (ASX: IOO).

You could go for quality fund managers like Magellan Global Trust (ASX: MGG), WAM Global Limited (ASX: WGB) or Future Generation Investment Company Ltd (ASX: FGX).

Or to build your wealth you could go for some of the best individual shares out there like Brickworks Limited (ASX: BKW), Pushpay Holdings Ltd (ASX: PPH) or Bubs Australia Ltd (ASX: BUB).

More reading

• Revealed: 5 dividend shares for reliable income
• Why high yield dividend shares can be detrimental to your wealth
• Is it time to buy ASX small caps for your portfolio?
• The Pushpay share price is up 70% in 2020: Why I would still invest
• Is it time to invest in shares or wait on the sidelines?

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, MAGLOBTRST UNITS, and WAMGLOBAL FPO. The Motley Fool Australia owns shares of and has recommended Brickworks, 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.

The post How to build good wealth with small investments appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2y14LVa

Superannuation has gotten a lot of publicity lately. On one hand, super balances around the country were subjected to some pretty nasty volatility earlier in the year when the first wave of fear over the coronavirus gripped the markets. Since the S&P/ASX 200 Index (ASX: XJO) fell over 38% peak-to-trough in March, most Australians would have seen the value of their super balance fall quite far in all likelihood.

On the other hand, the government has allowed some individuals to withdraw up to $10,000 from their super accounts in this financial year to assist with hardship because of the coronavirus. Another $10,000 is permitted in FY21 (starting in July).

Despite these issues, superannuation still has a powerful potential to help you build long-term wealth – a potential that is too often ignored.

So where does this potential come from? Well, it’s the nature of the super system itself.

The advantages of super

Superannuation isn’t a ‘form of investment’ or an ‘asset class’, as is often misconstrued. It’s merely a vehicle that can hold other assets (like ASX shares) within it.

But unlike investing outside your super fund, the rules over tax are very advantageous if you invest through super.

For one, contributions are typically only taxed at 15% on entry – as opposed to other income which is taxed at your full marginal rate. All earnings that the assets within your fund generate (e.g. dividends and interest) are also taxed at 15%.

As such, super can be viewed as something of a tax shelter.

Now, normally, all Australian employers are required to pay 9.5% of each employee’s salary into super. This level is the bare minimum most employees will receive, but you can also contribute on top of this base with salary sacrificing.

Salary sacrificing is also done with pre-tax dollars (up to a cap), so you will also be paying less tax on this money. Of course, the downside is that you can’t touch the money until retirement.

How superannuation can make you a millionaire

By using this vehicle effectively and over a long period of time, you can significantly boost your wealth and prospects of a comfortable retirement. Compound interest works best when it’s left alone and works even better in a tax-sheltered environment like super.

So if you aren’t already, it might be a good idea to take full advantage of our super system. There are many perks like salary sacrificing to invest within super that investors ignore to their detriment. Don’t be that guy – make sure your super is working as well as it can for you today!

More reading

• Top brokers name 3 ASX 200 shares to buy right now
• LNG spot price surge benefits ASX 200 shares
• The smartest ASX shares to buy if you have $2,000
• ASX gold shares steady: Can gold provide your portfolio with defensive and safe returns?
• Is $1,000 of A2 Milk shares a good investment?

Motley Fool contributor Sebastian Bowen 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 How to use your superannuation to become a millionaire appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3dGFFtP