As I've mentioned previously here, a $5,000 investment may not seem like a life-changing sum of money to invest, but if you have time on your side it certainly can be.
Based on an average return of 8% per annum, an investment of $5,000 each year for a period of 30 years would grow to be worth a total of $612,000.
If you can maintain this for a further six years, the power of compounding would take your investment beyond the million-dollar mark.
I believe this demonstrates how rewarding long-term buy and hold investing can be. With that in mind, here are three shares to buy with that first $5,000:
Altium Limited (ASX: ALU)
Altium is the electronic design software company that provides the Altium Designer product. This award-winning software is used by blue chip companies including BAE Systems, Dell, NASA, and Microsoft to design the printed circuit boards (PCB) that are found inside electronic devices. Given its leading position in a market that is expected to grow significantly over the next decade, I believe it is well positioned to continue its strong earnings growth for a long time to come.
REA Group Limited (ASX: REA)
REA Group is the property listings company behind the realestate.com.au website and a number of international equivalents. Although the local property market is going through a tough time right now, REA Group has continued to generate strong profit growth. I believe this is a testament to the quality of the company and expect revenue and earnings to accelerate rapidly once the current headwinds ease. This could make it a great long term investment option.
Webjet Limited (ASX: WEB)
Another top share to consider is this online travel agent. As well as benefiting from the shift to online booking and the inbound and outbound tourism boom, I believe Webjet is well-positioned to continue its explosive growth thanks to the growing popularity of its numerous travel booking brands. These brands have delivered bookings growth significantly higher than the industry average in recent years and management does not expect this to stop any time soon. Over the next three years management is targeting booking growth 3x the underlying market growth rate for its B2C business and 5x the underlying market growth rate for its B2B business.
