The best time to start investing in ASX shares is when you're in your 20s.
When you start investing earlier in life you give yourself the longest amount of time for your share portfolio to utilise compound interest for you.
It might be best to go for growth businesses for people in their 20s which will hopefully create the most wealth. They also have low dividend yields, which isn't great for income, but it is good for losing less of the returns to tax along the way:
iShares S&P 500 ETF (ASX: IVV)
One of the best investments on the ASX could be a S&P 500 exchange-traded fund (ETF). The reason why it's an attractive idea is because many investors don't actually do any better than the market average – achieving the average is an excellent result for your wealth.
The S&P 500 ETF is a fund which tracks the average return of the American share market, which is where all the big and exciting tech businesses are located like Microsoft, Apple, Alphabet, Facebook and so on. These are fantastic global businesses, they don't just make their earnings from the USA.
Another reason why the ETF could be a really good option is that it only charges a 0.04% management fee per annum, so you get to keep nearly all of the returns for yourself. Lots of investment managers charge 1% or more per annum.
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital has achieved the best performance of any listed investment company (LIC) on the ASX over the last decade. Its job is to invest in good value shares that are listed overseas.
Its costs are a bit higher than iShares S&P 500 ETF but the costs are fixed so as MFF Capital gets bigger its costs are cheaper as a percentage of the net assets.
Two of its biggest holdings are Visa and MasterCard, which make up around a third of the portfolio. Those two payment businesses have great network effects, are growing at impressive rates and are benefiting from society going cashless as well as an increase of online shopping.
It's useful that MFF Capital can hold cash or use debt to try to manage its risk profile or take advantage of opportunities.
Foolish takeaway
I really like both of these investment ideas. You could easily just hold one of them as your only investment and likely do very well over the next decade. MFF Capital is the one in my portfolio because I like the flexibility that it can invest anywhere in the world, whereas the S&P 500 is stuck with US shares.
