Everyone knows that to retire rich you have to invest in assets that can compound your wealth and also generate positive cashflow. It’s not a secret formula, it’s quite simple. But, the question is: what to invest in? Every investor in the world would do perfectly well by investing in iShares S&P 500 ETF (ASX: IVV). But, if you want to retire quicker or richer then I’d suggest going for shares that could deliver returns of more than 10% per annum over the long-term. Here are three ideas to do that: MFF Capital Investments Ltd (ASX: MFF) MFF…
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Everyone knows that to retire rich you have to invest in assets that can compound your wealth and also generate positive cashflow. It’s not a secret formula, it’s quite simple.
But, the question is: what to invest in?
Every investor in the world would do perfectly well by investing in iShares S&P 500 ETF (ASX: IVV). But, if you want to retire quicker or richer then I’d suggest going for shares that could deliver returns of more than 10% per annum over the long-term.
Here are three ideas to do that:
MFF Capital Investments Ltd (ASX: MFF)
MFF Capital is a listed investment company (LIC) that invests in overseas-listed shares. Portfolio manager Chris Mackay has done a great job, with MFF Capital delivering an average total shareholder return of 16% per annum over the past five years.
Whilst this performance has partly been driven by the falling Aussie dollar, it has also been down to quality picks like Visa and MasterCard as its largest holdings that have driven investment returns.
I think that anyone wanting to retire rich with shares needs to allocate some money to overseas shares. This can be done indirectly with LICs like MFF Capital. It’s currently trading at 7% discount to the recently-announced pre-tax NTA.
Bapcor Ltd (ASX: BAP)
Bapcor is the leading auto parts business in Australia and New Zealand.
It owns a number of specialist wholesalers including in the electrical segment, which will be important as the number of electric vehicles grows over time.
A key reason why I’m hopefully about Bapcor’s future is that management manage to keep increasing profit margins each year and are now expanding Burson, the main chain for Bapcor’s earnings, into Asia. If Asia is a success then Bapcor could have many years of growth ahead because the region has a huge population and a large auto market.
It’s currently trading at under 24x FY18’s underlying earnings. I am a fan of growth shares trading at attractive valuations.
Vanguard FTSE Asia Ex Japan Shares Index ETF (ASX: VAE)
Vanguard, the famous low-cost index fund provider, offers a variety of indexes to invest in. I believe that this Asian index could comfortably outperform the ASX Index because the Asian region is growing much faster and there are some exciting shares within this index.
It has over 800 holdings with a management fee of 0.4% per annum which will hopefully get smaller as time goes on if the total fund size gets larger.
The current trade war tariffs going on between China and the USA have hurt this index more than most, but that could just mean now is a good opportunity to buy. It also comes with a handy 2.5% dividend yield at the current level.
I think all three of these shares are capable of ramping up investment returns so that you can retire rich. MFF Capital and the Vanguard Asian ETF look particularly attractive because of how diverse their holdings are.
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Motley Fool contributor Tristan Harrison owns shares of Bapcor and Magellan Flagship Fund Ltd. The Motley Fool Australia owns shares of and has recommended Bapcor. 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.