Australia Markets closed

How to double your money with ASX shares

Tristan Harrison
growth

Having cash in the bank isn’t going to help you get rich with Australia’s official interest rate now under 1% and most bank accounts offering interest rates under 2%. I think the only option is ASX shares.

If you left $1,000 in a bank account and it earned 2% a year forever it would take 35 years to double to $2,000.

That’s no good for building wealth.

I can tell you that the Australian share market, being ASX shares, has delivered an average return per annum of around 10% over the decades. Those returns don’t even include the excellent franking credits which ensures Australian investors aren’t doubled taxed.

If your $1,000 grows at 10% per annum it will double in less than eight years.

To achieve that 10% return you don’t need to pick shares yourself necessarily. Just being invested in a broad, diversified ASX exchange-traded fund (ETF) like BetaShares Australia 200 ETF (ASX: A200) and Vanguard Australian Share ETF (ASX: VAS) means you will essentially get the average Australian share market return. You could also go with a high-performing fund manager like WAM Microcap Limited (ASX: WMI). 

There have been lots of shares that have delivered much better returns than 10% per annum over the past five years. For example, the CSL Limited (ASX: CSL) share price is up 222%, Altium Limited (ASX: ALU) is up 984%, REA Group Limited (ASX: REA) is up 150%, Pro Medicus Limited (ASX: PME) is up 2,010% and Xero Limited (ASX: XRO) is up 449%.

Your money can double or more in a relatively short period of time if you choose the right growth shares.

I think one of the shares most likely to deliver excellent returns over the next few years is Pushpay Holdings Ltd (ASX: PPH) because of its growing profit margins, expanding client base and new church management system acquisition for synergies.

The post How to double your money with ASX shares appeared first on Motley Fool Australia.

Some other contenders to potentially double your money faster than the market are these top ideas.

Five Growth Shares Tipped For Big Things In 2020

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield...

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!

More reading

Tristan Harrison owns shares of Altium and WAM MICRO FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Altium and Xero. The Motley Fool Australia has recommended Pro Medicus Ltd., PUSHPAY FPO NZX, and REA Group 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 Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019