Is it easy to get rich with ASX shares and the Australian stock market?
If you ask people with little interest or experience with investing in ASX shares, you might hear things like ‘its all just gambling’ and ‘the stock market is one giant casino’.
People with this mindset see successful ASX investing as nothing more than ‘getting lucky’, just like any other form of gambling.
Whilst I personally abhor this kind of mindset, it can’t be denied that a lot of investors try and play that game. In reality, getting rich quickly in the stock market can only be done with speculative investing (gambling) – betting big on a risky play.
That is not easy to pull off – especially if you want to make it your modus operandi.
But it is a lot easier to get rich with ASX shares if you play the long game instead.
The benefits of a long-term mindset
Warren Buffett (one of the greatest investors of all time) is 89 years old and the world’s fourth-richest person – with an estimated wealth of around US$ 88 billion, according to Forbes.
But Buffett only made his first million when he was around thirty and his first billion circa 50.
He wasn’t gambling, he got rich slowly.
And I think anyone can follow in his footsteps (albeit probably not all the way to $88 billion).
All you need is the right investment choices, consistent investing and a healthy dose of time. Compound interest works best with these three ingredients and is the real secret to building wealth.
Einstein didn’t call it the eighth wonder of the world for nothing!
Even if a hypothetical investor bought ‘boring’ blue-chip ASX shares like Commonwealth Bank of Australia (ASX: CBA), Woolworths Group Ltd (ASX: WOW) or CSL Limited (ASX: CSL) a few decades ago and just sat on them, they would have benefitted enormously and would likely have a portfolio of formidable value today.
Even a plain-as-paint index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) would have produced excellent results with the same three ingredients.
Investing is most commonly derailed by depriving your portfolio of those key ingredients – especially by doing things like selling shares during a crash.
As long as you stay true to your plan through thick and thin and invest in good quality companies, I think anyone can get rich with ASX shares. Just don’t expect it to happen overnight!
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. 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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