I think the best way to retire rich is with ASX shares.
Cash in the bank, term deposits and bonds just aren’t producing enough returns these days. Property growth looks limited to me, with low yields.
I think shares are the only answer with their compound growth power. Holding quality shares for the long-term could really boost your wealth. You just need to find the right ones. There’s nothing wrong with holding a diversified exchange-traded fund (ETF) like Vanguard MSCI Index International Shares ETF (ASX: VGS).
These are three shares I think that can help investors grow their wealth over the long-term:
Altium Limited (ASX: ALU)
I think electronic PCB software business Altium has one of the best setups compared to most other technology businesses.
It is one of the best ways to get exposure to the growth of the Internet of Things in my opinion. It is developing and growing a variety of services for engineers to build the products, machines and vehicles.
Altium pays a fast-growing dividend, but it also keeps a good portion of annual profit to re-invest into the business at a high rate of return for more growth. It has zero debt on the balance sheet, it has good R&D accounting policies and it has great management.
It’s aiming for impressive growth over the next five years (and beyond) with more customers, growing revenue and higher profit margins.
REA Group Limited (ASX: REA)
If you believe that Australia’s population will keep growing and property prices will keep rising over the long-term then REA Group is a good way to gain a long-term growing cashflow from that.
Property owners would be quite silly not to use realestate.com.au as it’s Australia’s leading property portal by some distance. It’s a great digital asset for REA Group.
The company keeps coming up with more initiatives that can unlock more revenue for each ad. Over the longer-term REA Group could benefit from its investment stakes in overseas property sites in Asia and North America, which could one day be bigger than the Australian business.
REA Group also continues to grow its dividend for shareholders, it could be paying a much larger income to investors in five years.
CSL Limited (ASX: CSL)
The healthcare giant has been one of the best ways to grow an Australian portfolio over the past two decades. At a share price of over $300 investors may now be thinking that the growth might be over.
But, the company continues to generate top line and bottom line growth, which is highly valued by investors looking for growth in a world with very little growth. CSL continues to spend around 10% on research & development which should unlock new products in the future and drive earnings higher over the coming decade(s).
All three shares have great futures, but if I had to pick one I’d go for Altium – it’s the smallest of the three but I think it has the best growth potential over the next decade with the increasingly technological nature of the world.
Where to invest $1,000 right now
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Tristan Harrison owns shares of Altium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended REA Group Limited and Vanguard MSCI Index International Shares ETF. 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.