Could these stocks make you rich?

Australia’s super rich have one very important thing in common and it’s held true across generations.

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

A recent report by Capgemini and RBC Wealth Management (NYSE: RY) showed that in the past year, Australia has created the most ‘wealthy’ individuals of any country in the world – so how can everyday Aussies start making millions or even billions of dollars?

Over the generations, Australians have made billions in a number of different ways. Whether it was investing in the right companies, starting their own businesses or creating something brilliant, the super-rich all have one thing in common – demand for their services.

Of the top 10 individuals listed on BRW’s Rich 200 list, four made their money in mining related activities, four from property development and management, one from logistics and one from media. All 10 parties were able to make their fortune based on what they perceived was the ‘next biggest thing’.

For example, the mining boom allowed companies like Gina Rinehart’s Hancock Prospecting, Andrew Forrest’ Fortescue (ASX: FMG) and Christopher Wallin’ QCoal, to make billions from resources that lay in Australian soil for so long. They, like any good investor, were able to ride the wave of demand to its highest point before anyone else realised what was happening.

Growing a fortune

So what is the next boom that will enable Australians to strike it rich without being computer savvy, a geologist or builder?

The ANZ (ASX: ANZ), ABC, Financial Review and The Australian have all published material on what they believe to be Australia’s next booming industry. They all seem to agree that Australia’s mining boom may be over, but Australia’s ‘dining boom’ may be about to begin.

Anthony Pratt, Australia’s fourth-richest person, has said that Australia will become a food “superpower” in coming years and could export an estimated $2 trillion. Zhou Wenzhong, Chairman of the Boao Forum for Asia has acknowledged that food security is “one of the key challenges facing the Asian region”. A recent US government-funded study found that by 2050, food production will have to rise by 60% just to keep pace with expected population increases and changing demands.

We’re already starting to see a need for higher global food production in parts of Asia. As Chinese growth rates have contracted, many in the financial sector believe the contractions are a result of the government’s shift from a manufacturing society to taking care of the rising number of middle class. Asia’s middle class is forecasted to grow from 500 million to 3 billion in coming decades and our country will have 20 times more arable land per capita than China, India and Indonesia.

ANZ CEO Mike Smith said that insufficient attention has been paid to the potential surge in Chinese demand for soft commodities such as grain and meat. Mr Smith believes that the growing middle class in Asia would support prices and ensure that more deals were done in the agribusiness sector, which is one of the target areas of ANZ.

Recently an increasing amount of Australian agricultural businesses have been bought out by foreign entities that have the ability and balance sheets to counter cyclical and weather-affected products like wool, grains and fertilizers. The most recent example is Graincorp (ASX: GNC), which will soon be taken over by Archer Daniels Midland (NYSE: ADM) and proves that the Australian agricultural sector is possibly about to produce large amounts of money for both domestic and international investors.

Australian stocks for an Asian boom

One important consideration for Australia’s agricultural sector is water supply. We’ve seen plenty of farmers struggling to make ends ‘meat’ and remain profitable. Companies like PrimeAg (ASX: PAG) and Tandou (ASX: TAN) are small caps that own water rights and rural properties and could stand to benefit from the huge demand in land and water supply.

Nurfarm (ASX: NUF) is a global crop production company that manufactures and sells a range of herbicides, insecticides and fungicides. It sells a large amount of products internationally but currently only 6.1% of revenue comes from Asian markets.

Ruralco (ASX: RHL) is a small-cap diversified agricultural stock that pays a handsome dividend of 6.2% fully franked and has over 500 outlets across Australia. It provides merchandise, fertilisers, seed, wool, livestock, real estate, stock feed, water, grain, risk management and finance and insurance to domestic farmers.

Goodman Fielder (ASX: GFF) is another company that stands to gain from a surge in demand of soft commodities and operates under the banner of many well-known products like Meadow Lea, Praise, White Wings, Pampas, Mighty Soft, Helga’s, Wonder White, Vogel’s, Meadow Fresh and Irvines.

If you would like some exposure to soft commodities but don’t like cyclical and small to medium cap stocks, then perhaps Wesfarmers (ASX: WES) or Coca-Cola Amatil (ASX: CCL) will stand to gain as well. Wesfarmers sells fertilizers and chemicals whilst Coca-Cola’s drinks, fruit juice, milk, coffee and fruit and vegetable products are ready to be taken to another level.

Foolish takeaway

The world’s wealthiest have made vast fortunes from giving consumers what they need and want by perceiving a gap in society or business. Australia is well placed to reap the benefits from an Asian dining boom, just as we have done from the mining boom. Perhaps it’s time to take a risk and get on board with some quality stocks before everyone else has a chance.

In the market for high yielding ASX shares? Get “3 Stocks for the Great Dividend Boom” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool contributor Owen Raszkiewicz owns shares in Ruralco and ANZ.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »