MENU

How to invest in your 40s

Your 40s should hopefully be the time where you’re approaching, or are at, your peak earning potential.

Kids, a mortgage and marriage will probably take up a big chunk of your money, but with your highest earnings there will hopefully be some money for investing.

Most people will be a few decades from retirement and even further away from being six feet under, so it’s far too early to withdraw everything as cash and stuff it under the mattress.

However, it’s also probably a good age to start heeding one of Warren Buffett’s most famous and wise quotes: Rule number one don’t lose money, rule number two don’t forget rule number one.

I believe that people in their 40s need to invest for growth. Slow-growth, high-yielding stocks aren’t likely to generate strong returns. One idea could be BETANASDAQ ETF UNITS  (ASX: NDQ), it’s an index which gives concentrated exposure to all of the top tech shares in the US like Apple, Alphabet (Google), Facebook, Amazon and Microsoft. The nature of the index fund means that the risk is diversified instead of being invested in just Apple.

Other options could be businesses that lead their industries but should be able to keep growing as profit margins increase and they expand overseas, such as REA Group Limited (ASX: REA), Seek Limited (ASX: SEK) and Altium Limited (ASX: ALU).

Another idea could be to invest in shares that benefit from the ageing population like Challenger Ltd (ASX: CGF) and Ramsay Health Care Limited (ASX: RHC) because you have the time to see the thematic play out.

Another idea could be to invest in food-related shares. The Australian and global populations are predicted to continue rising for a long time to come, which should lead to rising food prices. Two options to place this theme could be Costa Group Holdings Ltd (ASX: CGC) and BetaShares Global Agriculture ETF (ASX: FOOD).

Foolish takeaway

The 40s is the beat time to set yourself up for a good retirement. High earnings whilst having decades for compounding is a good combination.

Another idea for share growth is this exciting stock which is on course to increase profit by more than 30% this year.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of Altium, Challenger Limited, and Ramsay Health Care Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS, Challenger Limited, and COSTA GRP FPO. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Ramsay Health Care Limited, REA Group Limited, and SEEK Limited. 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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.