The Motley Fool

3 simple habits to help you reach your retirement goals

There’s no doubt that saving hard and investing in your ASX portfolio are key to long-term wealth creation and financial security.

But, it can be difficult to know what to do with your portfolio from month to month or year to year, especially with the current state of the markets.

With this in mind, I’ve looked at 3 tips to help you boost your chances of financial success and retire early on your own timeline.

1. Let your winners run, cut your losers loose

While actually buying and selling ASX shares in this day and age is very simple, the biggest hurdle to investing in the sharemarket is psychological.

It’s very hard to maintain your composure when your investment in Afterpay Touch Group Ltd (ASX: APT) shares has surged 173.25% higher since the start of the year.

The key to investing is to keep your fingers off the panic button, cut your poor investments loose and let your winners play out in the long-term.

After all, that’s why you invested in them in the first place right?

2. Work out how much money you need in retirement

While wealth creation is a positive journey for us Fools, we do sometimes run the risk of wanting too much without knowing why we want it.

The dream of owning the house and the boat might be great, but it’s worth stepping back and considering what you really want to use your hard-earned ASX nest-egg for.

For some this might be living on $20,000 per year in retirement and others might prefer a more lavish $100,000 per year.

Whatever your financial goals are, work out roughly what you need to live comfortably and use one of the many simply online calculators to work out how to get there.

For example, if you are 35 years old with a $200,000 share portfolio and realise you need $50,000 in dividend income to live on from 2050 onwards, you can then work backwards from an expected dividend yield to see how much you should be investing in shares.

3. Pay yourself first

This is a common tip that comes up in personal finance advice, and for good reason.

There is no point slaving away for every penny just to have millions to spend in retirement – and the reality is, much like strict dieting, it probably won’t work long-term.

Create healthy money habits, allocate your spending money and contribute to your ASX portfolio regularly, whether that’s buying beaten-down shares such as AMP Ltd (ASX: AMP) or dollar cost averaging into exchange-traded funds like Vanguard Australian Shares Index ETF (ASX: VAS).

For those wanting to kickstart their dividend hunt, these 3 ASX income shares are a great place to begin.

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Kenneth Hall owns shares of Vanguard Australian Shares Index. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

FREE REPORT: Five Cheap and Good Stocks to Buy now…

Our Motley Fool experts have FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.