Got $5,000? 5 ASX shares to buy for lasting wealth

Analysts think these shares are top options to buy and hold.

A young woman's hands are shown close up with many blingy gold rings on her fingers and two large gold chains around her neck with dollar signs on them.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

If you want to grow your wealth, then buy and hold investing with ASX shares could be the way to do it.

That's because the longer you hold onto ASX shares, the more you benefit from the power of compounding.

For example, if you were to invest $5,000 per year into ASX shares and generated a 10% per annum return, your portfolio would grow to be worth over $900,000 in 30 years.

But which ASX shares could be great options for that first $5,000 investment? Let's take a look at five ASX shares that could generate lasting wealth.

5 ASX shares to buy for lasting wealth

Firstly, when picking ASX shares to buy and hold for the long term, you'll want to focus on quality and the sustainability of competitive advantages.

Companies like CSL Ltd (ASX: CSL) and ResMed Inc. (ASX: RMD) in the healthcare sector immediately spring to mind. Both companies are leaders in their field and have very bright long term growth outlooks.

The team at Morgans is very positive on both companies. It has an add rating and $315.40 price target on CSL's shares and an add rating and $32.82 price target on ResMed's shares.

A couple more ASX shares that could be destined to generate lasting wealth for their shareholders are in the tech sector. They are rapidly growing location technology company Life360 Inc (ASX: 360) and cloud accounting platform provider Xero Ltd (ASX: XRO).

Goldman Sachs is a big fan of both companies and has a buy rating and $14.20 price target on Life360 shares and a buy rating and $152.00 price target on Xero's shares.

A fifth and final ASX share for investors to consider as a buy and hold investment is Lovisa Holdings Ltd (ASX: LOV). It is a fashion jewellery retailer with a fast-growing global store network.

Morgans has been very impressed with the company's growth in recent years and believes this positive form can continue. In fact, last year, the broker spoke very positively about its long-term growth outlook. It said:

"LOV continues to impress us with the rate at which it opens new stores and expands into new markets. As we have said before, LOV may just prove to be one of the biggest success stories in Australian retail. LOV is showing every sign of becoming a global brand."

In light of the above, the broker recently put an add rating and $35.00 price target on the ASX share.

Motley Fool contributor James Mickleboro has positions in CSL, Life360, Lovisa, ResMed, and Xero. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goldman Sachs Group, Life360, Lovisa, ResMed, and Xero. The Motley Fool Australia has positions in and has recommended ResMed and Xero. The Motley Fool Australia has recommended CSL and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on How to invest

A young well-dressed couple at a luxury resort celebrate successful life choices.
How to invest

With no savings at 40, I'd use Warren Buffett's golden rule to build wealth with ASX shares

It's never too late to start investing for a golden retirement.

Read more »

A couple sits in their lounge room with a large piggy bank on the coffee table. They smile while the male partner feeds some money into the slot while the female partner looks on with an iPad style device in her hands as though they are budgeting.
How to invest

Where to invest $8,000 in April 2024

Here's what sort of returns could be on offer from these ASX shares according to analysts.

Read more »

An ASX dividend investor lies back in a deck chair with his hands behind his head on a quiet and beautiful beach with blue sky and water in the background.
How to invest

Shares vs. property: How to generate $500 passive income per month

We run the numbers.

Read more »

A woman holds a lightbulb in one hand and a wad of cash in the other
How to invest

ASX 200 shares vs term deposits: What $5,000 invested a year ago is worth now

Which has been the superior option for investors?

Read more »

Kid on a skateboard with cardboard wings soars along the road.
How to invest

Shares vs. property: Why cheaper homes and ASX small-cap shares are rising fastest in 2024

We look into the changing trends in shares vs. property.

Read more »

Smiling young parents with their daughter dream of success.
How to invest

2 ASX shares that could help set you up for life

Analysts are saying good things about these buy-rated shares.

Read more »

a man wearing casual clothes fans a selection of Australian banknotes over his chin with an excited, widemouthed expression on his face.
How to invest

$20,000 invested in these ASX 200 shares 10 years ago is worth how much?

Would you be laughing all the way to the bank today or not?

Read more »

Busy freeway and tollway at dusk
How to invest

If inflation rebounds I'll be buying this leading ASX 200 share

Inflation doesn’t impact all ASX 200 shares equally.

Read more »