I think ASX shares are a great way to build wealth over the long term. For beginner investors, it might be the case that $500 is how much money they have to start.
In my opinion, investing is the type of thing that people can learn best by getting stuck into it and getting experience. People don't need a ton of money to get started.
Many brokers have a minimum investment size of $500. For example, that's how much CommSec requires investors to have.
I think it's a good idea for beginner investors to consider investments that could make sense for the long term and that they might want to buy more of in the future. A $500 investment could just be the start.
With that in mind, here are three I'd start buying:
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Betashares Nasdaq 100 ETF (ASX: NDQ)
This is an exchange-traded fund (ETF) that owns a number of businesses that we see and probably use in our everyday lives. An ETF is an investment that owns a bunch of different shares inside it.
I think it can be a useful teaching tool to be invested in shares that we use the products or services of.
Some of the recognisable names in this portfolio are: Apple, Microsoft, Amazon.com, Alphabet, Tesla, Meta Platforms, Nvidia, Costco, Adobe, Intel, Netflix, PayPal, Starbucks, Monster Beverage, Moderna, Airbnb, Kraft Heinz and Lululemon.
It could be a good time to consider this ASX share with $500 because the Betashares Nasdaq 100 ETF has dropped around 25% this year. In other words, these shares are on a big discount at the moment.
Australian Ethical Investment Ltd (ASX: AEF)
Australian Ethical is an interesting funds management business.
It looks to provide investors with investment funds that match their ethics. For example, it avoids fossil fuel businesses and invests in companies that are making a positive difference to the world.
The ASX share has a growing number of customers, as more people look for ethical investments.
A key segment of the business is that it offers superannuation money. It had $6.2 billion of funds under management (FUM) at 30 June 2022 – over FY22, it achieved record super net flows of $0.8 billion. It's benefiting from the regular superannuation contributions made by employees and other people.
After falling around 60% in 2022, I think the Australian Ethical share price looks compelling for the long term.
Wesfarmers Ltd (ASX: WES)
I think Wesfarmers is one of the most attractive long-term ideas around.
It has been around for many decades, and I think it could continue to be one of the longest-running companies.
Several businesses are in the portfolio, including Bunnings, Priceline, Kmart, and Officeworks.
One of the most attractive things about this ASX share is that management is unafraid to change what names are in the portfolio. For example, it has divested coal, Kmart Tyre & Auto and Coles Group Ltd (ASX: COL) in recent times. It has acquired Catch, Priceline and a stake in a lithium project in recent years. I like that it's focused on the future.
With a good dividend, a growing portfolio of good businesses, and a long-term focus, I think Wesfarmers is one of the most solid ASX shares around.
The Wesfarmers share price has fallen around 25% in 2022.
