There's no specific yield that's the right level – it depends on how much passive income an investor is trying to generate from their portfolio. The higher the yield goes, the riskier/less reliable it may be.

But, there are a few ASX shares that offer a very large dividend yield, but have also offered consistent payouts.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the largest retailers of male and female grooming products including electric shavers, clippers, trimmers and wet shave items. The company has 126 Shaver Shop stores across Australia and New Zealand.

The company has a very steady dividend record. It increased its annual dividend per share every year between 2017 to 2023, maintained it in 2024 and then grew it slightly in FY25.

At the time of writing, it has a grossed-up dividend yield of 10.7%, including franking credits, which is incredibly attractive, in my view.

I think dividend growth looks likely because in the second half of FY26 to 22 February 2026, it reported total sales growth of 3.8% and online sales growth of 12.7%.

With initiatives like growing its store network, increasing online sales, expanding its own brand (Transform-U) and working with additional brands for exclusive products.

Future Generation Global Ltd (ASX: FGG)

I really like listed investment companies (LICs) as passive income options because of how they can determine what size dividend to pay each year, assuming they have the profit reserves to do so.

Future Generation Global has invested in a number of funds that are focused on international shares. I like this strategy because it means being able to hunt for opportunities from across the world, giving great diversification and a good opportunity to find high-performing investments.

Pleasingly, the fund managers don't charge management fees (or performance fees). Instead the LIC donates 1% of its net assets each year to youth mental health charities.

The ASX share has increased its annual payout each year starting in 2019, which is an impressive record of dividend growth considering everything that has happened between now and then.

Ignoring the recently-announced special dividend of 3 cents per share, its 2025 annual regular dividend came to 8 cents per share, representing a year over year increase of 8.1% year-over-year.

The 8 cents per share payout for FY25 translates into a regular grossed-up dividend yield of 7.3%, including franking credits. I think that's a great starting point for the dividend income.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

Share prices can be volatile during certain periods, but dividends can be much more consistent because it's the board of directors who decide the level of the payout, assuming the company has the profit reserve to do so.

The great thing about companies is that they can pay a dividend and grow their profit over time, leading to larger dividends and hopefully share price growth.

The ASX dividend share I want to highlight that could appeal to retirees is Future Generation Global Ltd (ASX: FGG). It's a listed investment company (LIC) with a number of pleasing attributes. LICs generate profit by making returns from an investment portfolio.

Big dividend yield and diversification

The business has been very consistent with its dividend growth for investors. It paid an annual dividend per share of 1 cent in FY18 and has increased its payout every year since.

In the recently-announced FY25 result, it grew its regular annual payout by 8% to 8 cents per share. Its regular dividend translates into a grossed-up dividend yield of 7.1%, including franking credits. Additionally, it declared a special dividend per share of 3 cents with the FY25 result, boosting the passive income for investors.

That means the FY25 payout comes to a total grossed-up dividend yield of 9.8%. I'm expecting the regular dividend to rise again in FY26.

This LIC has generated investment returns through its portfolio, which is invested in a number of funds managed by different fund managers. The fact that it's invested in 16 different funds gives it enormous diversification with exposure to more than 3,500 underlying shares across different sectors and markets.

Over the past seven years, the Future Generation Global portfolio has returned an average of 10.4% per year, which is enough for the ASX dividend share to pay a good dividend and still deliver growth in the value of the portfolio over time.

Admirable setup

A typical LIC charges management fees to investors, which is understandable, but it does mean investors are losing some of the returns to investment professionals.

Future Generation Global does not charge management fees (or performance fees). Instead, the LIC donates 1% of its net assets to youth mental health charities. That's a very worthwhile cause and means millions of dollars can be donated each year.

Not only is it delivering good passive income for retirees, but you can feel great about it too.

Appealing discount

Exchange-traded funds (ETFs) should trade at the underlying values of their portfolio, while LICs can sometimes trade at a discount or premium to their underlying value (usually measured by the net tangible assets (NTA)). At the end of January 2026, it had NTA of $1.693 per share.

At the time of writing, it's trading at a 5.5% discount. I think it's appealing to buy a business when it's clearly trading at a discount to its underlying value.

The post Why this ASX dividend share is a retiree's dream! appeared first on The Motley Fool Australia.

2022 has seen plenty of volatility amid strong inflation and rising interest rates. But, just because conditions are difficult doesn't mean there aren't opportunities to be found. In fact, the lower share prices could mean there are better-priced opportunities.

The Australian Financial Review (AFR) asked for some recommendations from a number of fund managers that pick stocks for free for the Future Generation listed investment companies (LICs) of Future Generation Investment Company Ltd (ASX: FGX) and Future Generation Global Investment Co Ltd (ASX: FGG).

Here are three of the ASX shares that were chosen.

Seek Ltd (ASX: SEK)

Seek is the operator of a large employment website in Australia. It also has a presence in a number of other countries including Singapore, Brazil, Mexico, the Philippines and Vietnam.

According to the newspaper, Kyle Macintyre, investment director at Firetrail Investments, chose Seek as an opportunity after weakness in the Seek share price. It's down 40% in 2022 to date. Growth in Seek's Asian businesses is one of the things that Firetrail is attracted to.

The fund manager noted that the labour market may be weaker, hurting advertisement volumes and revenue. However, Macintyre pointed out that Seek is the market leader and, therefore, it has "underappreciated pricing power which can offset any potential slowdown in job ad volumes, allowing Seek to grow earnings despite the tougher macroeconomic environment".

Ramsay Health Care Ltd (ASX: RHC)

Private hospital operator Ramsay Health Care is one of the world's leading businesses in the sector, with a large presence in Australia, the United Kingdom and Europe. It was close to being taken over recently, but remains listed on the ASX.

The Ramsay share price is down more than 20% from April 2022. The AFR reported that Jun Bei Liu from Tribeca Investment Partners chose Ramsay thinking the ASX share can recover. While it does have a higher level of debt, this will seem "more reasonable" as hospital admissions "normalise" and COVID impacts subside. Jun Bei Liu said:

Ramsay is now very well positioned for a rapid recovery in earnings given the backlog of patients waiting for surgery in Australia, the Nordics and especially the UK. We are confident this will support elevated surgical volumes for an extended period.

RPMGlobal Holdings Ltd (ASX: RUL)

This ASX share may be the smallest of the three names by far, but it could have plenty of potential according to James Sioud, a portfolio manager from Regal Funds Management.

The RPMGlobal share price has dropped around 20% in the year to date.

But, good commodity prices could enable ASX mining shares to spend more on their tech budgets. The fund manager also said that the company's position is boosted by "solid pricing power and switching costs". The AFR quoted Sioud, who explained:

Whilst the mining industry has adopted cloud-based software much slower than other industries, we believe this transition is inevitable. RPMGlobal has spent the last decade preparing for this structural shift, spending almost $200 million building or acquiring software products, all of which are now cloud-enabled.

Foolish takeaway

It will be interesting to see how these three ASX shares perform and whether they are able to beat the market because of the reasons these fund managers have outlined.

The post 3 ASX shares tipped for market-beating returns in 2023: experts appeared first on The Motley Fool Australia.

But you can't have a dividend payment without a company trading ex-dividend first. So let's check out some of the ASX shares that will be going ex-dividend this week.

5 ASX 200 dividend shares going ex-dividend this week

WAM LICs trade ex-dividend today

Wilson Asset Management (WAM) is one of the largest fund managers on the ASX and has developed a reputation as an income stalwart on the share market with its Listed Investment Companies (LICs). Four of WAM's LICs are trading ex-dividend this week, today in fact.

They are WAM Alternative Assets Ltd (ASX: WMA), WAM Research Ltd (ASX: WAX), WAM Microcap Ltd (ASX: WMI) and the Future Generation Global Investment Co Ltd (ASX: FGG). 

All four of these LICs will pay out their dividends on 22 October. WAM Alternative Assets will be forking out 2 cents per share. WAM Research is putting up 5 cents, while WAM Microcap is sending 8 cents per share out the door. Future Generation will be paying out 8 cents per share. As is typical with WAM dividends, all of these payouts will be fully franked.

Reece Ltd (ASX: REH)

Plumbing supplies company Reece is also trading ex-dividend this week for its final dividend for FY21. This company will be paying out 12 cents per share, fully franked, on 27 October, with Reece going ex-dividend for this payment on Tuesday. 

At Reece's last share price of $17.86, the company had a dividend yield of 1.01%.

Duxton Water Ltd (ASX: D2O)

Water rights owner Duxton is another share that is trading ex-dividend, this one on Thursday. It will be shelling out a fully franked interim dividend of 3.1 cents per share on 29 October. At Duxton's last share price of $1.44, it was offering a yield of 4.24%.

Harvey Norman Holdings Limited (ASX: HVN)

Our final share to look at today is none other than the ASX retailing giant Harvey Norman. Harvey Norman is scheduled to trade ex-dividend on Friday this week. It will be doling out its final dividend of 15 cents per share, fully franked, on 15 November (so still a while to wait for shareholders).

At this company's last share price of $4.99, Harvey Norman had a dividend yield of 7.01%.

The post These 7 ASX shares are going ex-dividend this week appeared first on The Motley Fool Australia.

The next few weeks and months could be volatile with the imminent US election and the rising number of COVID-19 cases in the northern hemisphere, particularly in the US and Europe.

Don't worry, the ASX share market always finds something to be volatile about. Whether it's something domestic or overseas, some investors react to various geopolitical events.

But the share market keeps generating long-term returns despite the news, politics and everything else that happens over the years.

I believe that any short-term volatility, such as this week's, could be a buying opportunity. Here's where I would invest $500 today into ASX shares:

If this is your first investment, or one of your first investments, then I think it's worth thinking about your portfolio construction.

It's good to be invested in a few different businesses for diversification purposes. But if you invest your first $500 into Commonwealth Bank of Australia (ASX: CBA) then your entire portfolio is made up of one business.

However, if you invest in an exchange-traded fund (ETF) or listed investment company (LIC) then with a single investment you're buying a ready-made portfolio of multiple companies.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is a LIC that gives you exposure to global shares. But it doesn't just represent one portfolio of businesses, it actually (currently) represents 13 portfolios of businesses. That's because it's invested in the funds of 13 fund managers that invest in global shares. The LIC probably offers exposure to hundreds of underlying shares through the various portfolios.

Those fund managers work for free so that the ASX share can donate 1% of its net assets per share to youth mental health charities.

Some of the fund managers that it's invested in include Magellan Financial Group Ltd (ASX: MFG), Munro Partners and Cooper Investors. This group of 13 managers are meant to be some of best around.

I think the capability of the fund managers comes across in the returns of Future Generation Global's overall portfolio. Over the past three years, its gross portfolio return was 13.4% per annum – 3% per annum better than the MSCI AC World Index (AUD). Over the past year the gross portfolio return was 13.6%, which was 9.7% better than the index. This is solid outperformance.

The managers that Future Generation Global has picked were chosen for their ability to perform throughout the market cycle, particularly during tougher times. That's why the portfolio has managed to outperform the global index by so much over the past 12 months.

There are also a number of other benefits about investing in Future Generation Global today, aside from the good long-term returns.

Valuation and dividend

At the current Future Generation Global share price the ASX share is valued at a 14% discount to the net tangible assets (NTA) at the end of September 2020 (before the dividend). That's an attractive valuation considering Future Generation Global has a long-term record of outperformance.

The ASX share does pay a dividend to investors. In 2020 it has paid a fully franked dividend of 2 cents per dividend. It only pays one dividend per year. At the current Future Generation Global share price it offers a grossed-up dividend yield of 2.1%. Whilst that's not a big yield, I think it's good because it means most of the profit and growth is retained within the LIC for more long-term growth.

Foolish takeaway

I think Future Generation Global is a great option for a $500 investment. I already own some shares in my portfolio, but I'm close to buying some more with the current NTA discount seemingly more than 10% right now.

The post Where I'd invest $500 into ASX shares instantly appeared first on The Motley Fool Australia.

Some of wealth-building is down to luck. But a lot of it is down to the process you use for your money and the systems you put in place.

I think these important rules are worth following to help you build wealth:

Spend less than you earn

I think one of the most important rules for building wealth is making sure that you spend less than you earn, that you live within your means.

It's easy to spend a lot of money. It's harder to earn more. The trick is to make sure that your spending isn't consistently more than your income. If you earn $100 a month more than you spend then you can build your wealth over time. If you always spend $100 a month more than you earn then your net worth is going to head downwards until interest and debt overwhelm you.

How are you supposed to know if you're spending less than you earn? By tracking of course! I'm sure whichever bank you're with would offer some personal finance tools whether it's Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) or another one.

Plenty of people use another tool to track their finances like Excel, Google Sheets or even Zip Co Ltd's (ASX: Z1P) Pocketbook. I use Excel. 

Budgeting can be a really powerful tool to help you save money.

Be intentional with your savings

Spending less than you earn is a good outcome of your hard work and financial choices. But I think it's important to come up with an intentional system for your money.

Some people like the idea of saving money first and spending what's left after that. If you're aiming for a long-term savings goal, such as a house deposit, you need to make sure you're actually putting that money aside into a savings account rather spending it.

Even if you just save $100 or $200 a month, it's important to classify money not spent that month as savings. Keeping it physically separate in a savings account is a good idea. Otherwise you could just end up spending it a month or two later.

You can really start building good savings habits if you just make it into a routine to save money (like a fitness routine). As Warren Buffett said: "Chains of habit are too light to be felt until they are too heavy to be broken."

Have an investment plan

No-one has a crystal ball to be able to tell you when share prices are going to fall or rise. It's impossible to predict. A year ago I don't think anyone would have seriously predicted that a global pandemic was about to happen.

I think it's important to regularly invest into your portfolio. It doesn't matter whether the market is up or down. It doesn't matter which side of politics is in power. Don't worry much about the latest GDP or house price statistics. Investing regularly will make sure your wealth-building plan stays on track. It could be once a month, once every two months or even once a quarter. Just commit to regularly investing.

What shares would make good regular investments? I think some exchange-traded funds (ETFs) would be good ideas like Betashares Global Quality Leaders ETF (ASX: QLTY), BetaShares Global Sustainability Leaders ETF (ASX: ETHI) or Vanguard Msci Index International Shares Etf (ASX: VGS).

I also think that listed investment companies (LICs) and trusts (LITs) can be good for regular investing. I like ideas such as MFF Capital Investments Ltd (ASX: MFF), Magellan Global Trust (ASX: MGG), WCM Global Growth Ltd (ASX: WQG) and Future Generation Global Invstmnt Co Ltd (ASX: FGG).

The post 3 important rules to help you build wealth appeared first on The Motley Fool Australia.

In my opinion, each of the below picks could be really good long-term options:

Pushpay Holdings Ltd (ASX: PPH)

This ASX tech share is a donation payments business which services the large and medium US church sector. It's aiming for US$1 billion of annual revenue from this target market.

I think the company has a compelling future for the rest of the decade with growth being brought forward by COVID-19. The rising profit margins are very attractive to me.

At the current Pushpay share price it's valued at 41x FY21's estimated earnings. 

I've written about Pushpay many times as an idea, here is the latest longer-form article.

Redbubble Ltd (ASX: RBL)

Redbubble is an artist product business that sells things like wall art, masks, phone cases, clothing and so on through an online marketplace.

The company is seeing enormous growth as consumers shift to online purchasing. In the first quarter of FY21 it saw marketplace revenue growth of 116% and gross profit growth of 149%. It's a very scalable business due to network effects. It is steadily adding new product lines which increases its total addressable market.

In my opinion, Redbubble has a very promising growth trajectory over the next five years.

I have covered Redbubble in a longer article here.

Temple & Webster Group Ltd (ASX: TPW)

This ASX share is another e-commerce business. It sells furniture and home furnishings online. It's another business benefiting from the big shift to online shopping.

The Temple & Webster share price has crashed 24% lower after giving its trading update this week. Was it bad? The year to date to 19 October 2020 revenue was up 138% and it generated earnings before interest, tax, depreciation and amortisation (EBITDA) of $8.6 million – more than the whole of FY20.

Looking out five years, I think this is a good opportunity to buy shares of a very fast-growing business.  

WAM Microcap Limited (ASX: WMI)

WAM Microcap is a listed investment company (LIC) which aims to invest in ASX shares with market capitalisations under $300 million.

I think the investment team at WAM Microcap is one of the best LIC teams out there. Its portfolio has generated strong results – since inception in June 2017 it has generated returns of 21.2% per annum (before fees, expenses and taxes).

It also offers a grossed-up dividend yield of 5.3%.

MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is another LIC which has done well. The ASX share has been one of the best LICs over the past decade under the stewardship of Chris Mackay.

It owns a portfolio of high quality global shares with good growth prospects like Visa, Mastercard, Berkshire Hathaway, Home Depot and Microsoft.

I believe good long-term returns can continue, with a steadily rising dividend as a bonus.

Here's the latest longer article I wrote about MFF Capital.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is another LIC that gives exposure to global shares. However, it invests in the funds of fund managers that invest in global shares. Those managers work for free so that Future Generation Global can donate 1% of its net assets to youth mental health charities. It's a great setup. 

Its portfolio has outperformed the global share market over the short-term and longer-term. It's trading at a discount to its net tangible assets (NTA) per share and it's starting to grow its (small) dividend.

This is a longer article I wrote about Future Generation Global.

A2 Milk Company Ltd (ASX: A2M)

I think A2 Milk could be the best value ASX growth share in the ASX 200.

The infant formula business is certainly going through a tough time at the moment due to COVID-19 impacts on domestic customer demand and logistics.

However, I believe it still has a very strong future – particularly in North America. I think short-term difficulties give us an opportunity to buy shares cheaper of this attractive global growth business.

At the current A2 Milk share price it's valued at 23x FY23's estimated earnings.

I made a bull case for the A2 Milk share price in a longer article here.

Bubs Australia Ltd (ASX: BUB)

Bubs is also an infant formula ASX share that's suffering due to COVID-19 at the moment.

There are a few moving parts to Bubs, with the Chinese element worrying some investors.

However, there are two key areas of Bubs that make me bullish about its long-term future when you look out five years. First, its gross profit margin is steadily rising as more of its revenue comes from infant formula. Second, its growth prospects in markets outside of China, such as Vietnam, look very promising and could help drive revenue and profit much higher in FY22 and beyond.

I wrote about Bubs in a longer article here.

The post Got $1,000? You should buy one of these 8 ASX shares appeared first on The Motley Fool Australia.

Here are four of them, with a slant towards longer-term growth:

Pushpay Holdings Ltd (ASX: PPH) – $6,000

I think that Pushpay is one of the most promising ASX growth shares right now.

It's a digital donation business that facilitates payments to large and medium US churches.

Pushpay was growing before COVID-19, but the restrictions and social distancing seem to have brought forward the adoption of Pushpay's technology. It also offers a livestreaming service to connect with the church with its congregation.

The ASX share is now profitable and cashflow positive. Its profit margins are growing rapidly.

At the current Psuhpay share price it's trading at 40x FY21's estimated earnings.

A2 Milk Company Ltd (ASX: A2M) – $6,000

I think that A2 Milk is one of the best ASX growth shares with its strong brand power and large cash pile (with no debt).

A2 Milk is being disrupted by COVID-19 impacts. A2 Milk is struggling because of impacts to the daigou seller channel due to less students and less tourism from China. 

But I think the COVID-19 impacts are only going to be temporary on the ASX share. A2 Milk is rapidly building its Chinese based business, which will hopefully make up for the disrupted sales in Australia and New Zealand during the 2021 calendar year.

A2 Milk is guiding that it can grow its FY21 revenue by 4% to 10%. I think A2 Milk looks really good value when you look out to FY22 and FY23.

At the current A2 Milk share price it's trading at 23x FY23's estimated earnings.

Bubs Australia Ltd (ASX: BUB) – $4,000

Bubs is another infant formula business that is hurting right now.

It has also been suffering from pantry destocking in recent months just like A2 Milk. Demand was brought forward into the third quarter, so I don't think it can be surprising that consumers didn't need as much supplies over the next few months.  

There are a number of moving parts with the ASX share. Its core goat milk infant formula is growing well. In FY20 it grew total infant formula sales by 58%. This division is the most important one because it has a gross profit margin of around 40%, which is higher than other product lines.

Bubs is growing its export market revenue at a fast pace. In FY20 it grew direct sales to China by 32% and export markets outside of China grew by five-fold.

I think the ASX share's international growth is very promising over the next few years, particularly in places like Vietnam.

It has a solid balance sheet which can be used to fund further growth until it's cashflow positive, which I don't think is too far away.

At the current Bubs share price valuation, I think it has very good long-term growth potential.

Future Generation Global Invstmnt Co Ltd (ASX: FGG) – $4,000

Future Generation Global is a listed investment company (LIC) which gives investors exposure to international shares.

The ASX share is invested in funds of some of the best Australian fund managers that target overseas shares.

Some of those managers include: Magellan Financial Group Ltd (ASX: MFG), Cooper, Caledonia, Marsico and Munro Partners.

These fund managers work for free so that Future Generation Global can donate 1% of its net assets to youth mental health charities. This is particularly important right now in my opinion because of everything that's going on due to COVID-19.

Its portfolio has done very well over the short-term and the long-term. At 31 August 2020, Future Generation Global's gross portfolio return had outperformed the MSCI AC World Index over the past month, six months, twelve months, three years and since inception in September 2015.

At the current Future Generation Global share price, it's priced at a 14% discount to the net tangible assets (NTA) at 31 August 2020. The NTA could have grown since then.

These four ASX shares aren't the only investment ideas I've got my eyes though. 

The post Where I'd invest $20,000 into ASX shares right now appeared first on The Motley Fool Australia.

I can totally understand why people want to grow their dividend income because of what's going on right now. COVID-19 has caused a lot of uncertainty. The great thing about ASX shares is that they are among the best businesses in their industry, perhaps the best in the country. You can usually rely on them for a decent flow of dividends. 

Whilst March 2020 and April 2020 certainly looked rough with the rapid spread of the coronavirus and the restrictions which caused many parts of the country and economy to come to a standstill.

But the following six months has shown why it's important to be invested in shares. The recovery by the share market has just been extraordinary.

How to get started replacing your wage with ASX dividend shares

Over the long-term I think that shares, such as ASX shares, have proven that they can generate great returns for investors.

Most businesses make a profit each year and many of them pay out a portion of that profit out as a dividend (or distribution). Businesses can retain some of the profit to re-invest back into the business for more growth.

To get started you just have to start putting money to work into the share market. Pick a broker – there are plenty to choose from like banks or low-cost providers – then add some money and start investing.

There are lots of good choices where you can start your investment journey. You don't have to necessarily start with ASX dividend shares. Picks like Future Generation Investment Company Ltd (ASX: FGX), Future Generation Global Invstmnt Co Ltd (ASX: FGG), Betashares Global Quality Leaders ETF (ASX: QLTY), iShares S&P 500 ETF (ASX: IVV) and Vanguard Msci Index International Shares Etf (ASX: VGS) could be good places to start.

There are lots of calculators to help you work out how much money you may need to add to your portfolio to grow your portfolio to the size you need replace your dividend income. I think Moneysmart's is one of the best calculators out there.

How big does your portfolio need to be?

The necessary size of your portfolio will depend on how much income you're trying to replace and the dividend yield of your portfolio.

For example, if you're trying to replace $40,000 of wage income then a 4% dividend yield would require a $1 million portfolio.

If you had a portfolio with higher yielding ASX dividend shares, say a 6% yield, but you wanted to replace $100,000 of income then you'd need a $1.67 million portfolio.

I'm not going to name every single possible combination, but you get the idea.

For me, I'd be aiming for around a $1 million portfolio with a 5% yield to generate $50,000 of gross income before tax. If I were going to retire, I'd expect not to have to pay certain expenses – like transportation (to work), or mortgage costs because I'd aim to have paid off the mortgage by the time I retire. That would mean I could live off a lower annual income, meaning I'd be okay with a 'smaller' portfolio.

Which ASX dividend shares are worth buying?

It's getting quite hard to find nicely-priced, good quality ASX dividend shares because of how strong the share market has run and how low interest rates are, which has pushed up share prices.

But here are some examples, many of which are in my portfolio:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has a grossed-up dividend yield of 3.3%.

Brickworks Limited (ASX: BKW) has a grossed-up dividend yield of 4.2%.

Rural Funds Group (ASX: RFF) has a FY21 distribution yield of 4.9%.

WAM Microcap Limited (ASX: WMI) has a grossed-up dividend yield of 5.2%.

Future Generation Investment Company (FGX) has a grossed-up dividend yield of 6.3%.

Australian United Investment Company Ltd (ASX: AUI) has a grossed-up dividend yield of 6.3%.

The post How to replace your entire wage with ASX dividend shares appeared first on The Motley Fool Australia.

Some businesses can be attractive to income investors as they pay a dividend and they can be attractive for growth investors because they are demonstrating solid growth credentials.

I also like the idea of owning businesses that can be held for many years, which allows compounding for a long time rather than regularly triggering taxes on capital gains.

That's why I like these two ASX shares that could work for every investor portfolio:

Future Generation Global Investment Co Ltd (ASX: FGG)

This is a listed investment company (LIC) which is a very interesting proposition. The idea of a LIC is that it can be invested in a portfolio of assets, usually shares, on behalf of shareholders.

As the name suggests, Future Generation Global provides exposure to international shares. It is invested in the funds of various Australian fund managers that target global shares. If you think about it, the ASX share actually has very strong diversification because each of those funds represents a whole portfolio of different shares.

Some of the fund managers that the LIC is invested with includes: Magellan Financial Group Ltd (ASX: MFG), Cooper Investors, Caledonia, Marsico and Munro Partners.

One of the most impressive things about the Future Generation set up is that these fund managers don't charge management fees or performance fees. Instead, Future Generation Global donates 1% of its net assets each year to youth mental health charities. It's a great cause in my opinion.

The ASX share's gross portfolio return has been solid compared to the MSCI AC World Index (AUD), outperforming it over the past month, six months, twelve months, three years and since inception in September 2015. Over the past three years it has outperformed the global index by an average of 2.3% per annum.

At the current Future Generation Global share price it's trading at a 14% discount to the pre-tax net tangible assets (NTA) at 31 August 2020. However, the NTA may have grown since then. It currently offers a grossed-up dividend yield of 2.1%. Its diversification and performance makes it an attractive long-term option.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is another ASX share that I believe is a really good long-term investment option.

The investment conglomerate owns a quality portfolio of important and mostly defensive businesses. Can you imagine going without your internet connection? Soul Patts owns a large amount of TPG Telecom Ltd (ASX: TPG) shares. Everyone needs to live in a property, and construction is getting boost in tonight's budget. Soul Patts owns a significant portion of Brickworks Limited (ASX: BKW). Energy demand is expected to rise in Asia, so New Hope Corporation Limited (ASX: NHC) could rebound.

At 31 July 2020, the ASX could point to total shareholder returns (TSR) of an average of 12.7% per annum over the prior two decades, outperforming the All Ordinaries Accumulation Index by 5.2% per annum.

Whilst a majority of the return came from capital growth, dividends have been important too. Soul Patts has grown its dividend every single year over the past two decades. That's a great streak.

Soul Patts receives dividends and distributions from its investments. Soul Patts pays for its expenses and then pays out enough of the cashflow to increase the dividend compared to the previous year. In FY20 it only paid out 57% of its regular operating cashflows, meaning a large chunk of earnings can be re-invested for more growth in FY21.

At the current Soul Patts share price it offers a grossed-up dividend yield of 3.5%. The ASX share has been rising recently, so the yield has been pushed lower. But 3.5% is still comfortably better than bank interest rates. 

The post 2 ASX shares that every investor should own appeared first on The Motley Fool Australia.

The share market has proven to be a good wealth builder for decades. I think that's going to continue for many years to come.

With $20,000, I'd buy these ASX shares for the long-term:

Pushpay Holdings Ltd (ASX: PPH) – $6,000

Pushpay is my highest-conviction individual share idea at the moment. The ASX share facilitates digital donations to organisations like large and medium US churches.

The company was growing pleasingly before COVID-19 hit, but the pandemic has caused Pushpay's adoption to be brought forward as more people stay home, avoid groups and change to giving electronically rather than giving cash. A big benefit of Pushpay's offering is that it also has a livestreaming option so that churches and congregations can stay connected.

In FY20 the ASX grew its revenue by around a third. In FY21 it's expecting to at least double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF). Those are good growth numbers. 

The company is aiming for US$1 billion of revenue from the US church sector over the long-term. There are plenty of other 'donation markets' that Pushpay can expand into over the coming years.

One of the main things that attracts me to Pushpay is how scalable it appears to be. In FY20 alone it increased its gross profit margin by five percentage points from 60% to 65%.

At the current Pushpay share price it's trading at 34x FY21's estimated earnings.

WAM Microcap Limited (ASX: WMI) – $4,000

WAM Microcap is my preferred listed investment company (LIC). I think investors can generate strong outperformance by focusing on small caps, if you know what you're doing. The LIC targets ASX shares with market capitalisations under $300 million. The WAM team are very good at this. 

Past performance is not a guarantee of future performance at all. However, it must be said that WAM Microcap has done a good job of producing strong performance over the long-term with average gross portfolio returns of 21.7% per annum since inception in June 2017 (before fees, expenses and taxes). Over the past year it has done well too, with a gross return of 25.4%. I don't think you can expect future returns to be as good as that, but it could keep doing well.

WAM Microcap offers an ordinary grossed-up dividend yield of 5.6%. It also seems to be trading close to its pre-tax net tangible assets (NTA) per share at 31 August 2020. So it's a fair price to buy shares. 

Bubs Australia Ltd (ASX: BUB) – $3,000

Bubs is my preferred high-risk, high-reward idea at the moment. I think the goat milk infant formula producer has very good potential if it can capture market share in Asian markets like China and Vietnam.

So far it's working really well. In FY20 Bubs grew total revenue by 32% to $62 million. Chinese direct sales went up 32% to $13 million. That's good growth from the ASX share.

What particularly excites me is that export revenue outside of China increased five-fold and represented 10% of total revenue in FY20. It's this area of the business that particularly excites me because of the size of the total addressable market.

Bubs has a variety of products that can all continue to grow strongly over the coming years and lead to rising profit margins for the ASX share.

The Bubs share price has fallen 13% over the past month. I think it represents very attractive value for how much potential growth there is outside of China. Of course, there are China risks but I think the company is doing the right things to grow market share there with its localised production strategy.

Future Generation Global Invstmnt Co Ltd (ASX: FGG) – $7,000

Future Generation Global is another good LIC in my opinion. It invests in the funds of Australian fund managers who invest in overseas shares. It has money with top managers like Magellan Financial Group Ltd (ASX: MFG), Cooper Investors, Caledonia and Marsico.

However, these fund managers work for free so that Future Generation Global can donate 1% of its net assets each year to youth mental health charities. It's a great initiative, particularly during these times. 

The great thing about Future Generation Global is that it offers very good diversification because it's invested in a number of portfolios, not just individual businesses.

Its gross portfolio performance has been better than the MSCI AC World Index (AUD) over both the short-term and the long-term.

Outperformance and diversification are the main reasons I'm willing to invest so much of my theoretical $20,000 into it.

At the current Future Generation Global share price it's priced at a 17% discount to the NTA at 31 August 2020. That's a very nice discount in my opinion. 

Foolish takeaway

I think all four of these ASX shares could be good buys to beat the market over the long-term. Pushpay is the one I'd be most likely to buy, however I'd happily buy shares of them all for my portfolio.

The post Where I'd invest $20,000 into ASX shares right now appeared first on The Motley Fool Australia.

There are some high-quality ASX shares out there like A2 Milk Company Ltd (ASX: A2M) and Pushpay Holdings Ltd (ASX: PPH). However, there are individual company risks when you own relatively few names in your portfolio. So it could be an idea to buy ASX shares that offer instant diversification rather than buying additional individual businesses just to make up the numbers.

Here are some great ideas:

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

This is a very diversified option for investors. It's an exchange-traded fund (ETF) that invests in a number of other ETFs. It's invested in ASX shares, international shares, global bonds, small international companies, emerging markets and Australian bonds.

It would be possible for this investment to be your only investment forever. It offers exposure to both growth assets and defensive assets.

The bonds may not be the best asset to own right now because interest rates are so low, so they don't offer much of a return.

However, the ETF has enough growth exposure that it could deliver good total growth. Since inception in November 2017 its net returns have been 6.6% per annum.

The ETF comes with an annual management fee of 0.27% per annum. That's cheap for what it does in my opinion.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is a listed investment company (LIC) which invests in indirectly in global shares.

The ASX share invests into the funds of Australian fund managers that invest in global shares. The great thing is that there are no management fees charged by Future Generation Global or the underlying fund managers, they work for free. They do this so that Future Generation Global can donate 1% of its net assets each year to youth mental health charities.

The LIC has money invested with a variety of managers including outfits like Magellan Financial Group Ltd (ASX: MFG), Cooper and Munro Partners.

The ASX share has outperformed its benchmark (the MSCI AC World Index (AUD)) over the past month, six months, 12 months three years and since inception (in September 2015). Over the past three years the Future Generation Global gross portfolio return has delivered a return of 13.1% per annum, outperforming its benchmark by 2.1%.

At the current Future Generation Global share price it's trading at a 14% discount to the net tangible assets (NTA) per share at 14%. Buying outperformance at a discount is attractive to me, particularly during the current COVID-19 times.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is a reliable investment conglomerate ASX share.

It's invested in private businesses in industries like agriculture, swimming schools, resources and financial services.

Soul Patts is also invested in listed ASX shares such as TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Australian Pharmaceutical Industries Ltd (ASX: API), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI) and Clover Corporation Limited (ASX: CLV).

I like the mix of large holdings above, plus it also has a large cap portfolio and small cap portfolio within its asset base.

Not only does Soul Patts regularly deliver outperformance of the broad ASX, but it is increasing its diversification. It has plans to invest in regional data centres.

The investment house has been around since 1903. It has great longevity. The management team are involved in the business for the long-term and investing within Soul Patts itself for the long-term.

At the current Soul Patts share price, it offers a grossed-up dividend yield of 4.1%.

Foolish takeaway

I really like each of these ASX shares as long-term diversification options. I like Soul Patts as a long-term idea, but Future Generation Global looks very good value to me. It's also good to buy now because of the strength of the Australian dollar.

The post 3 ASX shares I'd buy to quickly add diversification appeared first on The Motley Fool Australia.

What is a LIC?

In most ways a LIC is just like any other company. The main difference with a LIC is that instead of selling products and services, it makes investments on behalf of shareholders.

The profit generated by a LIC comes from the capital gains (both realised and unrealised) as well as the investment income it receives. The LIC can then choose to keep all of those investment profits to grow the portfolio further, or it could decide to pay out some of that profit as a dividend.

There are some very old ASX share LICs on the ASX like Australian Foundation Investment Co.Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG). There are also newer ones such as Future Generation Global.

A quick overview of Future Generation Global Investment Co Ltd

Future Generation Global is one of the philanthropic LICs launched by Wilson Asset Management (WAM) founder Geoff Wilson. The idea behind Future Generation is to donate money to youth charities. I think it's a great cause. Future Generation Global invests 1% of its net assets each year to youth mental health charities.

In 2020 Future Generation Global's donation is $5.7 million. Some of the charities it supports include: Black Dog Institute, Reachout.com, Sane Australia, Kidshelpline and Butterfly.

So what ASX shares does Future Generation Global invest in? It doesn't actually invest in Australian shares. It invests in Australian fund managers that target international shares. Those managers work for free so that Future Generation Global can make its annual donation.

Some of the fund managers that it's invested with are: Magellan Financial Group Ltd (ASX: MFG), Cooper, Caledonia, Paradice and Munro Partners. These are some of the best fund managers in Australia.

Recent performance update

Future Generation Global releases a monthly update. The ASX share reports how its gross portfolio return compares against the MSCI AC World Index (AUD). Over July it outperformed the benchmark by 1%, over six months it outperformed by 5%, over the previous 12 months it outperformed by 4.8% and over the past three years it outperformed by 2.1% per annum with an average annual return of 13.1%.

I think this level of outperformance is attractive, particularly as it offers such a wide level of diversification.

Why I'd buy Future Generation Global Investment this week

The ASX share is invested in multiple portfolios of businesses. I really like that you get underlying exposure to many dozens of different stocks. It has been a good defensive option during COVID-19. 

I like that the Australian dollar has strengthened in recent months. That means it's better to buy international shares such as US businesses. Right now the Australian dollar is almost at the strongest level compared to the US dollar that it has been over the past 12 months.

The Future Generation Global board recently decided to increase the full year dividend from 1.5 cents to 2 cents per share. The focus of this ASX share is capital growth, but it's nice to see that the dividend can grow as the profit reserve gets bigger.

The value is the most important reason to consider Future Generation Global. I'm not sure what today's pre-tax net tangible assets (NTA) per share is. But at the end of July 2020, the LIC had $1.505 of NTA per share. Compared to the pre-open Future Generation Global Investment share price of $1.29, it's trading at an attractive 14.3% NTA discount.

Diversification, outperformance and a discount is an attractive combination in my opinion. I recently bought a parcel of shares and I'd happily do it again today.

The post This is the ASX share I'd buy this week appeared first on The Motley Fool Australia.

Don't go thinking that you're going to double your money in a few weeks. That's not how normal investing works. The long-term average returns of shares has been around 10% per annum. If you manage to beat that then I think you're doing well.

One of the main things I'd suggest for beginner investors is that you could look for diversified investment options away from the ASX. Sadly, many of the businesses that feature heavily on the ASX, like the big banks, don't have much long-term growth potential in my opinion.

So that's why I'd suggest buying these ASX shares for a beginner's portfolio:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

Here's an explainer about exchange-traded funds (ETFs). You can buy a fund on the ASX, giving you exposure to lots of businesses in a single investment.

There are lots of different types of ETFs. But I only think it's worth investing in an ETF which has good underlying holdings. An ETF will only perform as well as its investments.

The ETF I've named doesn't invest in ASX shares, it invests in quality global businesses that rank well on four key attributes: return on equity (ROE), debt to capital, cash flow generation ability and earnings stability.

What that means is that the ETF is aiming for specific types of businesses that are highly profitable for how much money the shareholders have had to contribute, those businesses have healthy levels of debt, that they're generating real cash profit (not just from accounting tricks) and that the earnings are generally reliable year to year.

So what shares count as quality? Nvidia, Apple, Accenture, Adobe, Facebook, Intuitive Surgical, Nike and Intuit are some of the biggest names featured.

The ETF has performed strongly in its short life – since inception in November 2018 it has returned an average of 18.8% per annum.

Clearly the stocks in this ASX share's portfolio can produce strong returns. It's invested heavily in the technology sector – around a third of the ETF is made up of IT businesses. Another 26.5% is allocated to healthcare shares. Healthcare shares are very defensive.

The ETF has an annual management fee of just 0.35%, which is cheap compared to active managers. The lower the fees the higher the net returns for investors.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is an ASX share that operates as a listed investment company (LIC). The job of a LIC is to invest in other shares on your behalf.

This LIC is quite different to most other LICs. It actually invests into the funds of Australian fund managers who invest in global shares. The special thing is that there are no management fees or performance fees involved with the LIC. All of the fund managers work for free so that the ASX share can donate 1% of its net assets per annum to youth mental health. Mental health support is particularly important during these difficult times.

Future Generation Global's portfolio has produced impressive returns. The gross portfolio return has outperformed the MSCI AC World Index (AUD) over the past month, six months, twelve months, three years and since inception in September 2015.

Over the past six months, Future Generation Global's return has outperformed by 5% and over the past year it has outperformed by 4.8%.

Some of the largest fund management allocations include 12.4% to Magellan Financial Group Ltd (ASX: MFG), 11% to Cooper Investors and 9.9% to Caledonia.

I think it's a particularly good time to invest today because Future Generation Global's pre-tax net tangible assets (NTA) was $1.505 at 31 July 2020. That means at the current Future Generation Global share price it's trading at a 15% discount to the NTA. You can buy $1 of assets of the ASX share for $0.85. Not bad at all, considering Future Generation Global has shown long-term outperformance.

Foolish takeaway

I think both of these ASX shares would be great options for beginner investors. I think they can outperform the ASX's overall return. At the current prices I would probably go for the Future Generation Global LIC because of the large NTA discount, but the quality ETF is likely to keep doing well too.

The post Here are 2 ASX shares perfect for a beginner appeared first on The Motley Fool Australia.

The Future Generation companies are LICs with two main goals. The first goal is to donate 1% of net assets each year to youth charities and youth mental health charities. They can do this by charging shareholders no management fees. The fund managers that the LICs invests with also don't charge management fees – they work for free. The other goal is to generate returns for shareholders. 

Future Generation Australia HY20 result

Future Generation Australia reported that over the six months to 30 June 2020, its portfolio's decline of 7.1% outperformed the S&P/ASX All Ordinaries Accumulation Index by 3.3% (the index dropped 10.4%) which included the COVID-19 crash.

Over the past 12 months the LIC's negative 1.2% return outperformed the index by 6%. Since inception the Future Generation Australia portfolio has grown by an average of 7.3% per annum, outperforming the index by 1.8% per annum. The outperformance was delivered with less volatility.

The board decided to increase its interim dividend by 8.3% to 2.6 cents per share. The LIC had an estimated profit reserve of 8.6 cents per share at 30 June 2020. The LIC was able to fund this dividend announcement thanks to the profit reserve. The Future Generation share price is up almost 3% in reaction to the announcement.

At the current Future Generation Australia share price of $1.05, it offers a fully franked dividend yield of 5% or 7% when grossed-up to include the franking credits.

Some of the charities currently supported include: Act For Kids, Australian Children's Music Foundation, Australian Indigenous Education Foundation, DEBRA Australia, Diabetes Kids Fund, Giant Steps, Lighthouse Foundation, Mirabel Foundation, Raise Foundation, United Way Australia, Variety and Youth Off The Streets.

This year the LIC will invest $4.8 million into charities, which will bring the total charitable donations since inception to $21.4 million.

At the current Future Generation Australia share price it's trading at a 8.5% discount to the net tangible assets (NTA) at 30 June 2020.

Future Generation Global HY20 result

Future Generation Global reported that its portfolio's return of 0.3% outperformed the MSCI AC World Index's (AUD) return of negative 4.4% by 4.7%. Over the past year the global LIC's 7.5% portfolio return outperformed the index by 3.6%.

The leadership was pleased to preserve shareholder capital in a highly volatile period.

Since inception, the LIC's average portfolio return per annum of 9.2% was 0.3% per annum better than the index.

The board of Future Generation Global announced a 33% increase to its dividend to 2 cents per share. This was achieved by tapping into the profit reserve as well as the solid outperformance achieved in recent times.

The Future Generation Global share price is up almost 1% in reaction to the announcement.

If the LIC were to pay 2 cents per share every 12 months going forwards, it would have a grossed-up dividend yield of 2.3% based on the current Future Generation Global share price.

Some of the current youth mental charities currently supported are: Black Dog Institute, Brain and Mind Centre, Butterfly Foundation for Eating Disorders, Kids Helpline, Orygen – the National Centre of Excellence in Youth Mental Health, ReachOut Australia, SANE Australia and Youth Focus.

This year the global LIC will invest $5.7 million, which will bring total donations since inception to $19.7 million.

At the current Future Generation Global share price it's trading at a 17% discount to the June 2020 NTA.

Foolish takeaway

The share prices of both LICs have risen in reaction this result. Outperformance and an increased dividend have been welcomed in these difficult times and investors clearly thought that both were opportunities after today's result announcements. 

The post Future Generation LICs grow dividends in June result appeared first on The Motley Fool Australia.

You don't want too many of your eggs in one basket in the current COVID-19 situation that the world is in.

It's hard to predict what's going to happen over the next 12 months. Vaccine success could send the share market higher. Shares could also fall if a healthcare solution isn't produced, if COVID-19 infections spread or if the economic impacts are worse than expected.

With the above uncertainty, I think it's a good idea to make sure your portfolio is diversified with good shares. There's not much point diversifying just for the sake of it if your returns are hampered.

Here are three ASX share ideas to quickly add diversification:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

This is an exchange-traded fund (ETF) which is offered by BetaShares, one of the biggest ETF providers in Australia.

There are some global ETFs that offer exposure to many hundreds or even thousands of businesses. This ETF offers diversification with investments in 150 global businesses ranked as high-quality companies.

They need to rank well with a high return on equity (ROE) and profitability, low leverage and earnings stability.

The largest positions only have a weighting of around 2%, so it's not too exposed to any particular business. I think most Aussie investors need to get more exposure to global shares, not ASX shares. The ETF's biggest positions are: Adobe, Accenture, Apple, Nvidia, Cisco Systems, Intuit, L'Oreal, Vertex Pharmaceuticals, UnitedHealth and Nike.

Quality tends to shine through difficult periods and over the long-term. Since inception in November 2018, the ETF has delivered an average return per annum of 19.76% per annum after fees.

The current annual cost is 0.35% per annum, which is pretty cheap.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

I really like to buy shares for cheaper than they're worth. Future Generation Global is a listed investment company (LIC). As the name suggests, it's not invested in ASX shares – it invests in global shares.

But it doesn't directly invest in shares, it's invested in the funds of fund managers who invest in international shares. But those fund managers work for free so that Future Generation Global can donate 1% of its net assets per annum to youth mental health charities.

Some of the fund managers it has investments with include Magellan Financial Group Ltd (ASX: MFG), Cooper, Marsico, Caledonia and Munro Partners.

Looking at the gross investment portfolio performance of the LIC, it has outperformed the MSCI AC World Index (AUD) over the past six months, 12 months, three years and since inception in September 2015.

Aside from the outperformance and diversification, another reason to like the LIC is that's trading at an attractive discount to its net tangible assets (NTA). At the end of June 2020 it had pre-tax NTA per share of almost $1.47. The current Future Generation Global share price is trading at a 17% discount to the June 2020 NTA.

Infratil Ltd (ASX: IFT)

Infratil is a New Zealand based business that is invested in a variety of sectors across Australia and New Zealand.

The ASX share owns 66% of Wellington Airport. Infratil owns almost half of a data centre business, it owns half of Vodafone New Zealand, it's involved in various renewable energy projects, it owns a diverse commercial real estate portfolio, it owns half of RetireAustralia – which is the largest privately-held pure-play retirement operator in Australia – and it's involved with Australian Social Infrastructure Partners.

Each of the above investments are long-term ideas which could produce solid total returns for Infratil.

I think Infratil is a good bet for the long-term growth of the economies in New Zealand and Australia.

At the current Infratil share price it offers a dividend yield of 3.4%.

The post 3 ASX shares I'd buy to quickly add diversification appeared first on The Motley Fool Australia.

COVID-19 makes things a bit tougher to earn and think about your personal finances right now. But you can start planning for when you can put your money ideas into action.

Here are the four main steps to getting large sums of dividends each year:

Earn money

This point seems like a very obvious one. But there's no getting around it. Money makes money. And you have to earn some money before you can start investing it.

I'm no career expert and it's a lot harder to earn money, or make more money, in the current economic conditions. But you have to do something to change your situation. Investing in yourself should provide the best return on your time or money. It could be a university degree, but it doesn't have to be. It could be a diploma. It could just be taking free online courses to boost your skills. Anything to show a potential employer you're the one to employ and that you have a will to learn. Sometimes you just need that piece of (e-)paper to get in the door, or Zoom call, for an interview with your potential employer. 

Perhaps learning or getting a certificate isn't what's needed for your income boost. Perhaps it's just a case of negotiating a pay rise, getting a second job or starting your own business. Just make sure that your potential business idea can go somewhere and make a profit, a hobby can end up costing money.

Avoid debt

Debt is the financial embodiment of impatience. Compound interest can work against you, even when interest rates are so low. Besides, if you're buying something (apart from a property) with debt then perhaps that suggests you shouldn't be buying it right now – save instead! Saving cash is much better for your bank balance.

Credit card debt interest and car financing are two of the biggest drains on a monthly budget. Though education debt may be a necessary evil to unlock a high-paying profession for you.

Save your money

Live within your means. Spend less than you earn. It all boils down to deliberately saving your money. The more you save the more you can invest.

You don't necessarily need to live the ultimate frugal, minimalist lifestyle if that's not enjoyable to you. It's your life and your money. There's merit to spending some of it now rather than saving every last cent. But just make sure you are getting value and enjoyment from that spending. But you need to have saved money to invest it. 

If you earn $500,000 a year after tax and spend $490,000 then you'd only have $10,000 to invest. If you earn $60,000 a year after tax and spend $45,000 then you have $15,000 to invest. Every household budget is different, but I'm sure there are some good savings you can create without changing your life too much.

Invest

The final piece of the puzzle is to invest and let compound interest do its work.

To make $65,000 of annual income you still need a large portfolio. But you can achieve that goal over time. You could choose exchange-traded funds (ETFs) for your portfolio like BetaShares Global Sustainability Leaders ETF (ASX: ETHI), BetaShares Global Quality Leaders ETF (ASX: QLTY) and iShares S&P Global 100 ETF (ASX: IOO).

You could go for quality fund managers to help you get there like Magellan Global Trust (ASX: MGG), WAM Microcap Limited (ASX: WMI), MFF Capital Investments Ltd (ASX: MFF) and Future Generation Global Invstmnt Co Ltd (ASX: FGG).

Or you could go for the best ASX growth shares you can find. I really like Bubs Australia Ltd (ASX: BUB) at the moment.

Some of my favourite dividend shares on the ASX are: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), APA Group (ASX: APA), WAM Microcap Limited (ASX: WMI) and Rural Funds Group (ASX: RFF).

It may take a decade or three to build up the necessary portfolio to make $65,000 a year in dividends, but you can get there if you keep building. How much you need will depend on the yield of the portfolio. Ignoring tax, a $1 million portfolio would need a yield of 6.5% to make $65,000 a year.

The post How to create a yearly income of $65,000 in dividends appeared first on The Motley Fool Australia.

I think it's important to realise that some shares can be very volatile and in some weeks it might not be such a good idea to pay that higher price.

For example, over the past month the Afterpay Ltd (ASX: APT) share price has traded above $58 and below $46. I wouldn't commit to a consistent investment strategy into a single business like Afterpay when it's so volatile.

But there are some ASX shares that it could make sense to invest $1,000 into every month, particularly in these coronavirus times. Here are three of those monthly ideas:

Share 1: Vanguard MSCI Index International Shares ETF (ASX: VGS)

I think it's the easiest to commit to a monthly investment strategy with exchange-traded funds (ETFs). ETFs will always trade at their net asset value (NAV), they're normally diversified and usually come with low costs.

ASX shares offer good potential investments, but the ASX only represents 2% of the total global share market. We can invest in many of the world's biggest and best businesses with Vanguard MSCI Index International Shares ETF.

It is invested in over 1,500 businesses across major developed countries such as the US, Japan, the UK and France. Its top holdings are shares like Apple, Microsoft, Amazon, Alphabet, Facebook, Johnson & Johnson, Visa and Nestle.

Despite COVID-19, the ETF has generated returns of 10.3% per annum over the last three years. It has an annual management fee of 0.18% per annum. 

Share 2: Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts is an interesting business. It's an investment conglomerate that has been going for over a century. I think it will be around for many decades to come with how it's set up.

It is invested in a variety of businesses like TPG Telecom Ltd (ASX: TPM), Brickworks Limited (ASX: BKW), Clover Corporation Limited (ASX: CLV), Milton Corporation Limited (ASX: MLT), Bki Investment Co Ltd (ASX: BKI) and Magellan Financial Group Ltd (ASX: MFG).

Soul Patts also owns stakes in a variety of unlisted businesses like swimming schools and agriculture.

The ASX share is steadily increasing its diversification and the share price generally tracks its underlying portfolio value. It's not an ETF, but I think it's another great option to diversify a portfolio.

Soul Patts has a great dividend record. It has paid a dividend every year in its existence since 1903 and it has grown its dividend each year since 2000.

I'd be happy to invest $1,000 every month into Soul Patts shares every month because it nearly always looks good value to me, has good diversification and offers something very different to a typical ASX share ETF.

Share 3: Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is one of my preferred listed investment companies (LICs).

I like it for three reasons.

The first is that it has good philanthropic credentials. It donates 1% of its net assets each year to youth mental health charities. But there are no management fees or performance fees involved with this LIC. Indeed, there aren't many costs at all as many services are provided to Future Generation Global for free.

The second reason is Future Generation Global is diversified. It's an ASX share itself, but it invests in the funds of fund managers who target overseas shares. It's invested with high-quality fund managers like Magellan Financial Group Ltd (ASX: MFG). Each fund represents a whole portfolio of shares, so Future Generation Global could be invested in many dozens of different non-ASX shares.

The third reason is that it looks great value. At the moment the share price is trading at a 21% discount to the May 2020 pre-tax net tangible assets (NTA). That's despite Future Generation Global's portfolio outperforming the MSCI AC World Index (AUD) over the past month, six months, year, three years and since inception in September 2015.

Foolish takeaway

I'd be very happy to invest $1,000 a month into each of these ASX shares. Future Generation Global definitely looks like the best value with the big NTA discount. But Soul Patts could be the most reliable over the long-term.

The post 3 ASX shares that I'd invest $1,000 into EVERY month appeared first on The Motley Fool Australia.

Investing in ASX shares is one of the best ways to grow your wealth in my opinion. But it can be difficult to know where to start.

There are thousands of different things you can invest in on the ASX. You could pick an exchange-traded fund (ETF), a managed fund, a listed investment company (LIC) or go straight for individual shares.

I think diversification is important for beginner investors. If you invested your first $500 into Commonwealth Bank of Australia (ASX: CBA) shares then 100% of your portfolio would be in one share.

It could be a wise idea to choose an investment that provides good diversification straight away. Some investments give exposure to a portfolio with the one pick. That's one of the main reasons why LICs are so attractive.

With that in mind, here are two ASX shares I'd happily buy with my first $500:

Share 1: MFF Capital Investments Ltd (ASX: MFF)

MFF Capital is a great LIC run by Chris Mackay, the co-founder of Magellan Financial Group Ltd (ASX: MFG).

It aims to invest in great businesses listed internationally. Not many ASX shares would count among the best businesses in the world.

It's invested in shares like Visa and Mastercard. Those two global payment businesses actually make up around a third of the portfolio. I think they have good growth runways with the shift away from physical cash payments to online shopping and contactless payments.

MFF Capital has been a solid ASX share over the past five years. The MFF Capital share price has risen by 54% since June 2015 despite the big selloff caused by COVID-19.

I think MFF Capital is worth owning because it has a diversified portfolio. Some of its other investments include Home Depot, CVS Health, Microsoft and some international banks.

At the end of May 2020 MFF Capital's portfolio was 46.4% net cash. That means it's well protected if the market were to fall again. It also means it has a good cash pile to buy beaten-up shares if that opportunity comes.

Share 2: Future Generation Global Invstmnt Co Ltd (ASX: FGG)

Future Generation Global is another overseas-focused LIC. The ASX share invested in a range of funds that invest in overseas shares. The fund managers of those funds work for free so that Future Generation Global can donate 1% of its net assets per year to youth mental health charities.

Some of the fund managers it's invested with include Magellan, Cooper Investors, Marsico Capital Management, Caledonia and Munro Partners. Each fund manager's fund comes with its own portfolio of shares. So Future Generation Global's underlying portfolio is very diversified.

At the end of May 2020, Future Generation Global's gross investment performance was showing a clear outperformance of the MSCI AC World Index (AUD). Over the past three years, Future Generation Global's 10.9% per annum portfolio performance outperformed the index by 1.7% per annum. Over the prior six months the index declined 4.2% whilst the Future Generation Global portfolio returned 1.2%.

If you're looking to buy the shares at a good price then you're in luck. The May 2020 net tangible assets (NTA) per share was almost $1.48, which compares to today's share price of $1.16. That's a 22% discount, which is very large considering the regular outperformance.

Foolish takeaway

I really like both of these ASX shares for the global exposure they provide, the quality investors involved and the attractive valuation on offer. At the current prices it's hard to pick a favourite, I'd really like to buy both.

The post I'd invest my first $500 into 1 of these 2 ASX shares appeared first on The Motley Fool Australia.

The ASX has fell quite hard over Thursday and Friday. Yesterday the S&P/ASX 200 Index (ASX: XJO) dropped by 1.9%. In morning trading it was down over 3%. Ouch.

This second selloff seems to have been caused by the comments made by US Federal Reserve boss Jerome Powell. He suggested that the US economy is going to take a while to recover. Some people may not be able to find jobs as quickly as they'd like to.

I think that the market declining is throwing up another opportunity to buy ASX shares at cheaper prices again. If I had $20,000 to invest, I'd go for these ASX shares:

Magellan Global Trust (ASX: MGG) – $6,000

I think Magellan Global Trust is one of the best listed investment businesses on the ASX. It aims for companies it thinks are the highest-quality in the world. These are businesses with excellent economic moats, coronavirus-resistant business models and strong balance sheets. It's rare to find ASX shares that are as large and powerful as the businesses this listed investment trust (LIT) goes for.  

Some of the shares that it owns are: Alibaba, Alphabet, Microsoft, Tencent, Facebook, Visa, Mastercard, Reckitt Benckiser and Novartis. Many of these names offer digital services which can still be used even during lockdowns. A business like Reckitt Benckiser is a great idea today because it owns cleaning product brands like Dettol and Lysol.

The Aussie dollar is quite strong right now, making it cheaper to buy international shares. Magellan Global Trust is currently priced at a 5% discount to its net asset value (NAV).

Pushpay Holdings Ltd (ASX: PPH) – $4,000

Pushpay is one of my favourite small cap ASX shares. It's an electronic donation business. Digital giving is in higher demand these days, particularly because of COVID-19 social distancing. We can see this change in demand from the growth that Pushpay is reporting. The fact that Pushpay offers a livestreaming option is very useful for its US church client base.

In the recent FY20 result Pushpay reported that its operating revenue increased by 28% to US$123.1 million, which excludes the Church Community Builder acquisition.

One of the most attractive things to me about this ASX share is that it continues to see improvement with its gross margin. FY20 saw an increase of five percentage points from 60% to 65% for the gross margin. This means that more of the revenue turns into profit for Pushpay.

In FY21 the company is expecting to approximately double its earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) to between US$48 million to US$52 million.

Over the long-term Pushpay is targeting a market share of over 50% of the medium and large US church segments, which the company thinks is an annual revenue opportunity of more than US$1 billion. I think this ASX share has a long growth runway.

Future Generation Global Invstmnt Co Ltd (ASX: FGG) – $6,000

Future Generation Global is one of my favourite listed investment companies (LIC). It doesn't charge any management fees or performance fees.

It invests in the funds of Australian fund managers who invest in overseas shares. These fund managers work for free. Why? So that the LIC can donate 1% of its net assets to youth mental health charities each year.

The LIC's gross investment performance has beaten its MSCI AC World Index (AUD) benchmark over the past year, three years and since inception in September 2015. Some of the fund managers delivering this performance include Magellan Financial Group Ltd (ASX: MFG), Cooper Investing and Marsico Capital Management.

At the moment we can buy this ASX share at a 22% discount to the net tangible assets (NTA) at 31 May 2020.

Bubs Australia Ltd (ASX: BUB) – $4,000

Bubs is another exciting small cap ASX share in my opinion.

It has a range of goat milk products which are proving popular with consumers. Woolworths Group Ltd (ASX: WOW), Coles Group Limited (ASX: COL) and Baby Bunting Group Ltd (ASX: BBN) have all recently expanded their distribution footprint of Bubs products.

In the third quarter of FY20 Bubs achieved revenue of $19.7 million. This was 36% higher than the December 2019 quarter and 67% better than the March 2019 quarter.

The ASX share achieved a positive operating cashflow of $2.3 million last quarter and ended with a solid cash balance of $36.4 million. Positive operating cashflow makes Bubs a safer choice in my opinion. 

I think Bubs is definitely one to watch for its international growth. The last quarter showed Chinese revenue rose by 104%. It's also growing strongly in Vietnam.

Foolish takeaway

I believe all four of these ASX shares can beat the ASX 200 over the next three to five years. I like the diversification that Magellan Global Trust and Future Generation Global bring. But I also think that Pushpay and Bubs are two of the brightest prospects on the ASX today.

The post Got $20,000? These are the ASX shares I'd buy during COVID-19 appeared first on The Motley Fool Australia.