Ask anyone if they would like to retire rich and almost without a doubt there will be a resounding response of 'yes'.
However, ask the question of people if they are actively doing something about it and almost without a doubt the response will be resoundingly more muted!
One of the hardest things for people to do is to actually put aside some of their earnings and save for the future. It's difficult to be a disciplined saver but spending less than you earn is a tried and true way of ending up with a healthy retirement nest egg.
If you are already living within your means and diligently setting aside a little each year to meet your long term goals – congratulations, you're already on your way to retiring rich!
Once you've mastered the first step – saving – the next step is to invest those savings and earn a reasonable return on your money. For some people this means bonds or deposit accounts, for others this means property – that's fine – each to their own. For me, and perhaps you, it means equities.
Will you be a passive or active investor?
This is a big decision. A passive investor will choose an index fund and be content with the market's return – that's no slouch – the market is tough to beat and its average historic performance (compounded) has been more than adequate to help you get rich.
The alternative is to try and beat the index by being an active investor. This means you or your delegate will pick individual stocks and manage a portfolio. There are risks with this approach – you could underperform the market – but also potential rewards – you could end up even richer!
If you're starting out with an active approach it can be wise to stick with proven, large businesses to create a solid foundation for your growth portfolio. Like these stocks… ResMed Inc. (CHESS) (ASX: RMD), SEEK Limited (ASX: SEK) and Computershare Limited (ASX: CPU).
These three companies have global operations, significant market share in each of their respective markets and plenty of future growth opportunities.
