How to turn $20,000 into $650,000 in 5 years with ASX shares

Investments in Xero Limited (ASX:XRO) and these ASX shares five years ago would have made you very wealthy. Here's how wealthy…

| More on:

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

I'm a big fan of buy and hold investing and believe it is the best way for investors to grow their wealth.

To demonstrate how successful it can be, I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

However, on this occasion I'm going to do things a little differently and change the time scale to just five years. This allows me to look at companies that have not been listed as long as normal.

With that in mind, here's how you would have fared if you had invested in these ASX shares five years ago:

Happy young man and woman throwing dividend cash into air in front of orange background.

Image source: Getty Images

Appen Ltd (ASX: APX)

The Appen share price may be trading significantly lower than its 52-week high, but that won't be bothering longer term shareholders. Since this time in 2016, Appen's shares have thoroughly smashed the market. The catalyst for this has been increasing demand for the artificial intelligence data service company's services from some of the largest tech companies in the world. This includes the likes of Apple, Facebook, and Microsoft, and is being driven by the increasing importance of AI for businesses. Over the last five years, Appen's shares have generated a total return of 62.7% per annum. This would have turned a $20,000 investment into $230,000.

Temple & Webster Group Ltd (ASX: TPW)

Thanks to the shift to online shopping, which has accelerated during the pandemic, this furniture and homewares focused ecommerce company has been growing its sales at an explosive rate. This has led to Temple & Webster's shares surging higher since their IPO in 2016. In fact, anyone lucky enough to have invested in its shares five years ago, would have generated an average total return of 101.5% per annum. This means that a $20,000 investment in its shares at that point would be now worth a staggering $665,000.

Xero Limited (ASX: XRO)

Finally, this cloud-based business and accounting platform provider has been a great place to invest over the last five years. Thanks to its strong recurring revenue, which has been underpinned by its rapidly growing customer base globally, Xero's shares have generated mouth-watering returns for investors. Since this time in 2016, its shares have provided a total return of 53.7% per annum. This would have turned a $20,000 investment into almost $172,000.

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Appen Ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of Xero. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on How to invest

Workers planning together in a design team.
How to invest

How to build a $25,000 ASX share portfolio from zero

Time, compounding, capital, and good investments is all you need.

Read more »

A young female investor with brown curly hair and wearing a yellow top and glasses sits at her desk using her calculator to work out how much her ASX dividend shares will pay this year
How to invest

How to start investing in ASX shares with $1,000

The first investment is often the hardest. Here’s how I would approach it with $1,000.

Read more »

A banker uses his hands to protect a pile of coins on his desk, indicating a possible inflation hedge.
How to invest

Stagflation: How to position an ASX stock portfolio

Investing with stagflation might become a necessity on the ASX...

Read more »

A man thinks very carefully about his money and investments.
How to invest

How to build a second income from ASX shares without taking big risks

You don't have to risk it all to build a second income on the share market.

Read more »

A couple are happy sitting on their yacht.
How to invest

A 2026 market crash could be a once-in-a-decade chance to build a $1 million ASX portfolio

The investors who built lasting wealth didn't avoid market crashes. They used them.

Read more »

A man leaps from a stack of gold coins to the next, each one higher than the last.
How to invest

How to build a $500,000 ASX share portfolio step by step

Aiming for half a million? Here are four easy steps to take to try and get there.

Read more »

A head shot of legendary investor Warren Buffett speaking into a microphone at an event.
How to invest

How to build a Warren Buffett-inspired ASX share portfolio

Investing like the Oracle of Omaha isn't as complicated as you might think.

Read more »

Beautiful holiday photo showing two deck chairs close-up with people sitting in them enjoying the bright blue ocean and island view while sipping champagne.
How to invest

How to build massive wealth with ASX shares

The share market could be the place to be if you want to become rich.

Read more »