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.

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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.

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Regional Express Holdings Ltd (ASX: REX) shares rocketed out of a trading halt this morning to be up as much as 45% on speculation the airline will start flying between capital cities. This would see Regional Express compete with Qantas Airways Limited (ASX: QAN) and Virgin Australia Holdings Ltd (ASX: VAH). 

3 airlines for Australia?

Media reports say Regional Express, which emerged from the ashes of Ansett, is planning to fly between capital cities and not just to them. The plans would involve flights between Australia’s biggest capitals, Sydney, Melbourne, Adelaide, Brisbane, and Perth. This would give Australia a 3 airline market, with Regional Express operating something between a budget and full-service airline. 

Regional Express today said it is considering the feasibility of commencing domestic airline operations. The airline disclosed it had been approached by several parties interested in providing the equity needed for it to start regional operations in Australia. With airlines globally struggling due to the travel downturn, Regional Express may be able to access additional aircraft at distressed prices. 

What does Regional Express do? 

Regional Express is Australia’s largest independent regional airline. It operates a fleet of 60 aircraft which, prior to coronavirus, were making some 1,500 weekly flights to 59 destinations across Australia. The airline received funding from the Australian Government to continue to operate during the coronavirus pandemic. 

While the value of government funding has not been disclosed, it was enough to allow the carrier to offer 1-2 return flights per week to most destinations in its network. Additional funding has since been secured, enabling the airline to operate 88 weekly services across Australia. 

Expansion plans

Regional Express estimates it would require $200 million to expand its operations. The board is exploring the feasibility of the endeavour and has begun talks with potential equity partners to expand to include domestic operations in addition to regional services. 

According to the Australian Financial Review (AFR), the business plan would involve leasing 10 narrow-bodied jets. “The most significant aspect of this is we will be the only capital city operator that is debt-free,” Regional Express’ deputy chairman John Sharp told the AFR. 

With a sufficient capital injection, the Regional Express board believes, “there is a confluence of circumstances which render the start of domestic operations by Rex to be a particularly compelling proposition.”

The Board expects to make a decision on proceeding in the next 8 weeks. If they decide to proceed, domestic operations are expected to commence on 1 March 2021. 

More reading

• Regional Express soars 45% higher amid plans to take on Qantas and Virgin Australia
• Up 140% since March: the ASX airline share flying under the radar
• In a post-COVID world, could Australia be the next superpower?
• 3 ASX 200 pandemic winners and 3 losers
• Are there any safe havens in ASX aviation shares?

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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.

Motley Fool contributor Kate O’Brien 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 ASX stock of the day: This ASX airline share jumped 45% today on expansion speculation appeared first on Motley Fool Australia.

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