Don't delay: Start investing today in shares to become rich

If you want to become rich then I think you should start investing in shares. You can build wealth in an easy way with shares.

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If you want become rich then I think you should start investing in shares today.

There's a common saying that the best time to start investing is 20 years ago, the second best time is today. You could say the same thing about trees – we only get to sit in the shade of a tree today because someone had the foresight to plant a tree years ago.

It takes a long time to become rich. Becoming rich with shares doesn't happen in a day or in a month. It takes many years, or a lifetime, of disciplined saving and investing to reach a desired financial goal or wealth position.

Why you should start investing today 

If you delay your investing journey it will dramatically reduce your final wealth balance. Shares have historically made an average of 10% a year. Whether that's Australian shares as represented by Vanguard Australian Shares Index ETF (ASX: VAS) or international shares represented by something like iShares S&P 500 ETF (ASX: IVV).

Imagine if you give yourself 25 years to build wealth and at the end of it you have $990,000. A great total. But if you delayed and only had 24 years, you'd miss out on that last year of 10% growth and you'd only have $900,000. One year of delay could mean almost $100,000 of growth lost!

Why you should invest in shares to become rich

Why specifically shares? I think there's a number of good reasons why shares will help you become rich. I prefer shares to property for a number of reasons.

On the one hand, I think property 'returns' don't reflect the full picture. Quoted property returns usually don't include the effects of negative gearing – which is an alternative description to 'losing real money'. Returns usually don't include transaction costs like stamp duty and real estate agent selling fees. The property prices quoted don't reflect the tens or hundreds of thousands of dollars of renovations (or just repairs) that have gone into the property – it hasn't simply been growth from a $500,000 property to $1 million with no cost to the investor. And what happens if an investment property doesn't have a (paying) tenant? The costs are still heading out of the bank account.

With shares you can be invested in the best businesses on the ASX or even the best in the world. I think it's these shares that will help people become rich. Don't forget that usually the share return totals don't include franking credits which is a big bonus for investors. Shares are pretty cheap right now because of the coronavirus

Which shares will help you become rich? I like the idea of investments like the iShares S&P 500 ETF, Magellan High Conviction Trust (ASX: MHH), MFF Capital Investments Ltd (ASX: MFF) and Future Generation Global Invstmnt Co Ltd (ASX: FGG).

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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund 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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