When you're investing for retirement, you're really playing a decades-long game.
It's a game that rewards patience, discipline, and compounding more than timing or luck.
To make your wealth last 25 years or more, you need investments that can do two things: survive and thrive. Survival means the business or structure endures through market cycles. Thriving means it continues generating the returns that help your retirement balance grow faster than inflation and withdrawals.
And that's the sweet spot, combining durability with compounding.
Why "boring" often wins the long game
The easiest — and arguably smartest — way to achieve that balance is through broad diversification. That's exactly what exchange-traded funds (ETFs) were designed for.
An ETF pools together dozens or hundreds of companies into one single investment. It automatically updates its holdings over time, meaning the strongest businesses rise to the top and the weakest quietly fall away. You don't need to guess who the winners will be 25 years from now as the ETF structure evolves for you.
Take the iShares S&P 500 ETF (ASX: IVV). It tracks the 500 largest publicly listed companies in the United States — many of which dominate their industries globally, such as Apple, Microsoft, and Amazon. If one company fades, another growing powerhouse takes its place.
Closer to home, the Vanguard Australian Shares Index ETF (ASX: VAS) gives investors exposure to Australia's top 300 companies. That includes resilient names like Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES), and BHP Group Ltd (ASX: BHP) — businesses that have continued paying dividends through multiple downturns.
Together, IVV and VAS provide investors with exposure to both the global innovation engine of the US and the steady, income-oriented nature of Australian shares.
That mix of growth and stability is perfect for compounding over decades. It's not flashy, but boring can be beautiful when you're building wealth that needs to last a lifetime.
If I had to choose one company, it would be this one
If I were forced to pick an individual company rather than a diversified ETF, my long-term choice would be Washington H. Soul Pattinson and Company Ltd (ASX: SOL).
It's not exactly a household brand like the banks or miners, yet Soul Patts has one of the longest track records on the ASX — more than a century of paying dividends since 1903.
Think of it as a mini Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B) for Australia. Soul Patts is an investment house with stakes in telecommunications, building materials, agriculture, and private equity. Its long-term focus and conservative balance sheet have helped it navigate recessions, wars, and countless market crashes — all while continuing to reward shareholders.
Over the past 20 years, Soul Patts has delivered an average annual return of around 12%, comfortably outpacing the broader market. The company's secret is its discipline: it reinvests dividends, avoids excessive debt, and takes advantage of opportunities when others are panicking.
That's exactly the kind of resilience and compounding power an investor wants heading into retirement.
Your most powerful retirement tool
Compounding isn't about chasing short-term returns. It's about allowing your investments to snowball, where your gains begin earning their own gains.
And that's the real test of any investment — not how exciting it looks today, but whether it can outlive you and outgrow inflation.
For example, a $100,000 portfolio growing at an average rate of 9.3% per year would double roughly every nine years. In 27 years, it could grow to more than $850,000 without adding a single extra dollar.
Now imagine adding regular contributions along the way through your superannuation. The combination of time, reinvested dividends, and disciplined saving is how wealth quietly multiplies.
The key? Consistency. Staying invested through market highs and lows matters far more than trying to predict what happens next.
A long-term blend of ETFs, such as VAS and IVV, alongside a few proven compounders, offers that balance.
