I like to use ASX shares as the way to build my wealth. It's easy to progressively add small amounts to my portfolio, and compounding can help grow my portfolio at a very satisfactory pace, if I choose right. Hopefully, I can reach a $1 million portfolio one day.
I don't want to have to deal with tenants, repairs, land taxes or a rental agent – ASX shares are my preference over investment properties.
What sorts of ASX share investments are the right call? Well, I like to keep one of Warren Buffett's sayings in mind for this.
He said that the first rule of investing is don't lose money. The second rule is don't forget rule number one. It's with this mindset that I'm putting quite a bit of my regular investment money into the following ASX shares.
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MFF Capital Investments Ltd (ASX: MFF)
I'm a big believer that investing in the best businesses makes a lot of sense because of how they compound earnings year after year. If a business grows its earnings at a compound annual growth rate (CAGR) at 10%, the profit will double in less than eight years.
MFF describes its investing strategy as the following:
We take a long-term view and focus on a select group of businesses that offer attractive combinations of quality and value, clear our high opportunity cost hurdle and create the potential for self-reinforcing growth. Our portfolio today comprises approximately 25 individual investments in some of the world's best exchange-listed businesses.
Its largest seven positions include Alphabet, Mastercard, Visa, Bank of America, American Express, Meta Platforms and Amazon.
I like this ASX share because of the combination of share price growth and dividend growth it has delivered to investors.
Its FY26 guided dividends equate to a grossed-up dividend yield of around 6%, including franking credits. It's trading at a discount of close 10% of its net tangible assets (NTA), which looks appealing to me.
VanEck Morningstar Wide Moat ETF (ASX: MOAT)
Long-term investing is easy when you own businesses that have strong long-term potential.
This exchange-traded fund (ETF) looks to invest in US businesses that are seen to have economic moats that are expected to endure for a long time and enable them to generate strong profits for many years to come.
To put a timeframe on it, the Morningstar analysts expect the economic moat to almost certainly last a decade and more likely than not to last two decades. After that, the fund only invests when these great businesses are trading cheaper than what Morningstar analysts think they're worth.
The MOAT ETF hasn't needed to rely on the US tech giants for its long-term returns that have averaged in the mid-teens and I think it's capable of delivering good returns in the coming years.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
Soul Patts is one of my favourite ASX share investments for diversification and long-term returns. It has already been listed on the ASX for 100 years and I think it still has a very long-term history ahead.
It operates as an investment conglomerate that has stakes (or full ownership) of a variety of listed and private businesses. Some of its investments include TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Tuas Ltd (ASX: TUA), Aeris Resources Ltd (ASX: AIS), Electro Optic Systems Holdings Ltd (ASX: EOS), Nexgen Energy (Canada) CDI (ASX: NXG) and plenty more.
I like how the ASX share has built a portfolio of businesses that can perform in all economic conditions and deliver rising cash flow generation along with a growing portfolio value. Its investments can organically grow themselves, plus Soul Patts regularly makes new investments.
