MENU

Why it makes sense to invest

Earlier today I wrote an article about three shares I’d buy for my child. In that article I made the point that some people don’t start investing until they’re 30 or 40, you could give your child decades of compounding before their peers even started.

However, I didn’t mean in the slightest that it’s too late to start investing if you’re 30, 40, 50 or even 60. The older you are the higher your earning power is likely to be and there are still many, many years to go before that person hits the average Australian life expectancy.

According to the World Bank the average Australian’s life expectancy was 82 in 2015. This number is slowly but steadily increasing and many Australians will pass 90 or even the big 100. In my family alone, I have several members of my family who have reached over the age of 90.

The point I’m trying to make with these statistics is that nearly every Australian has decades of compounding still available to them.

Moneysmart has a great compound interest calculator which you can play around with to see how much you could growth your wealth by.

For example, if you start with an initial deposit of $5,000 and add $250 each month and compound that over 20 years with a (conservative) growth rate of 7% you end up with a balance of just over $150,000. I’d like to think that most people would be able to scrounge $3,000 together each year by cutting back on a few things.

Of course, if you start with a bigger deposit, add more each month, have longer to compound your wealth or manage to grow your wealth faster than 7% per year then you could be well on your way to $1 million or more.

Shares like Ramsay Health Care Limited (ASX: RHC), Challenger Ltd (ASX: CGF), InvoCare Limited (ASX: IVC) and Rural Funds Group (ASX: RFF) have all proven to be strong market-beating stocks since they listed.

Foolish takeaway

I believe that every person should try to invest in assets that will compound your wealth. Property can be a good way to grow your wealth, but I personally believe the best option is shares.

Looking for ideas to grow your wealth? Try these top growth shares.

Top 3 ASX Blue Chips To Buy In 2018

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2018."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tristan Harrison owns shares of Challenger Limited, InvoCare Limited, Ramsay Health Care Limited, and RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended Challenger Limited and RURALFUNDS STAPLED. The Motley Fool Australia has recommended Ramsay Health Care 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 Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!