Author: openjargon

Echo IQ Ltd (ASX: EIQ) has been one of the fastest-growing stocks on the ASX this year.

Since January, it has risen over 500%. Fortunately for prospective investors, the team at Morgans believes this growth is set to continue. 

Company overview 

EchoIQ develops artificial intelligence for the cardiac diagnostics sector and supplies software to the health fund and insurance sectors. 

It operates through the Houston WeHave Software and Echo IQ segments. 

The Houston WeHave Software segment offers products and services across defence and other sectors. 

The Echo IQ segment focuses on developing artificial intelligence software that aids in predicting Aortic Stenosis heart condition.

In 2026, it has risen more than 500% as investors responded to a series of major commercial milestones. 

This includes its strategic partnership with Pro Medicus, new US market opportunities, a $110 million capital raising, and expanded access to a large cardiovascular imaging dataset to strengthen its AI-powered diagnostic platform. 

The rally has also been fuelled by optimism that these developments could accelerate US commercialisation and establish Echo IQ as a leading player in AI-driven cardiovascular diagnostics. 

Morgans upgrades its outlook 

Yesterday, the team at Morgans released an updated note on this ASX growth stock. 

It said Echo IQ has de-risked the commercial pathway since Morgan’s initiation via a $110m placement at $1.45 per share and a new distribution partnership with Pro Medicus.

HF FDA clearance remains the single biggest re-rating catalyst from here, and while timing has slipped slightly from our expected 4Q26 window, we remain confident on approval and expect feedback imminently. We lift our discounted target price to $1.85 (from $1.30), driven by a medium-term acceleration of revenues. Speculative Buy rating retained.

From yesterday’s closing price of $1.57, this indicates a further upside of nearly 18%. 

Elsewhere, Bell Potter recently tipped further upside for this ASX growth stock. 

It has a price target of $1.75 on Echo IQ shares. 

The broker said Echo IQ is making good progress by developing new products and securing long-term funding.

The broker warned, however, that the share price could experience volatility in coming months for several reasons:

• Revenue growth is expected to be modest over the next two years.
• The company will continue to spend significant cash.
• The share price will likely move based on announcements of new customer wins.

The post This ASX growth stock is up 500% this year and set to keep rising  appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

For plenty of Australians, turning 60 feels like reaching the finish line and starting retirement.

It’s the age when most people can finally access their superannuation. After decades of work, the money is finally yours.

So why not hand in the resignation letter? Because there’s one detail that’s easy to miss: the Age Pension generally doesn’t begin until age 67. That means if you retire at 60, you’re responsible for funding every single day of the next seven years yourself.

That’s where the maths starts getting interesting.

The seven-year gap

Spend enough time on retirement forums and you’ll quickly find plenty of doom and gloom. “Retirement is dead.” “We’ll all work forever.” “Nobody can afford to stop.”

It’s easy to get caught up in that negativity.

According to the Association of Superannuation Funds of Australia (ASFA), a single person needs around $630,000 in super to enjoy a comfortable retirement.

But there’s an important catch. That figure assumes retirement begins at around Age Pension age.

Retiring at 60 changes the equation dramatically.

Your super suddenly changes direction

Here’s what many people overlook.

The day you stop working isn’t just the day your salary disappears. It’s also the day your employer stops making super contributions.

Until then, your super has been doing two jobs at once. Investment returns are compounding, while your employer keeps adding another 12% of your salary into the account.

Once you retire, that conveyor belt switches off. Instead of filling the bucket, you start emptying it.

ASFA estimates a single retiree needs around $51,000 a year for a comfortable lifestyle.

If you begin retirement with $630,000, that’s more than 8% of your balance withdrawn in the very first year. Repeat that for seven years and your nest egg can look very different by age 67.

Those are also some of the most valuable years for compound returns. Once that capital has been spent, you can’t simply replace it.

Waiting until 67 changes everything

Now flip the scenario. Instead of retiring at 60, you keep working until 67. Your super isn’t shrinking. It’s still receiving employer contributions, while investment returns continue compounding.

Using a simple illustration, a $600,000 super balance earning an average annual return of 6% — alongside ongoing employer contributions — could potentially grow to around $950,000 over seven years. Actual outcomes will vary depending on investment returns, contributions, fees, and market conditions.

That’s an enormous difference. One person reaches 67 with a much smaller balance after drawing down their savings. The other arrives at retirement with a significantly larger portfolio.

That’s the real cost of retiring seven years early.

There is a middle ground

Fortunately, retirement doesn’t have to be all or nothing. A Transition to Retirement Pension (TTR) allows eligible Australians to access part of their super while continuing to work.

That could mean dropping back to three days a week instead of walking away altogether. Your employer is still making super contributions, while your investments continue working in the background.

There’s one catch, though. Many people assume a TTR automatically receives tax-free treatment. It doesn’t. Earnings within a TTR pension are generally taxed at up to 15%. The tax-free treatment usually begins only once you’ve fully retired or reached age 65.

The bottom line

Spreadsheets can tell you how much money you might have. They can’t tell you how much seven extra years in a job you dislike will cost your health or happiness.

For some Australians, retiring at 60 will be entirely achievable. For others, working a little longer could dramatically improve their financial security.

Neither choice is automatically right or wrong.

The important part is having a plan. Retirement isn’t something to drift into. The earlier you understand the trade-offs, the more choices you’ll have when the time finally comes to stop working.

The post Retirement at 60 or 67: The hidden cost most Australians never calculate appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The team at Morgans has been running the rule over a number of ASX shares this week.

Let’s see if it is bullish, bearish, or something in between. Here’s what the broker is saying:

Pro Medicus Ltd (ASX: PME)

Morgans remains positive on this medical imaging technology company after reviewing its financial model. This week, the broker has reaffirmed its accumulate rating and $230.00 price target on Pro Medicus shares. It said:

We have identified an error in the previously published financial summary tables, where a number of figures did not pull through correctly from our underlying model. The error was presentational only. The underlying financial model is unchanged, with no impact on any forecast, assumption or valuation input. No change to our ACCUMULATE rating or A$230.00 DCF-based target price.

ResMed Inc. (ASX: RMD)

The broker has been looking at ResMed’s decision to sell one of its software businesses. Morgans supports the decision and believes ResMed remains well-placed for growth through to FY 2028.

In response, it has retained its buy rating with a $40.97 price target. It explains:

MatrixCare will be divested for US$490m cash (c9x earnings), crystallising a disappointing financial outcome (paid US$750m (25x) in 2018) for a business that expanded software capabilities but delivered modest earnings growth. Strategically, however, we believe the transaction makes sense, as it simplifies the portfolio and retains Brightree and MEDIFOX DAN, while exiting a lower-growth, non-core software business. Importantly, net proceeds will largely be returned to shareholders via an accelerated share repurchase (ASR), which should substantially offset earnings dilution from both the MatrixCare disposal and the recently completed Noctrix acquisition, while FY26 guidance has been reaffirmed. We make modest adjustments to FY26-28 forecasts, with our target price moving to A$40.97 (from A$41.72). BUY.

Worley Ltd (ASX: WOR)

Morgans isn’t feeling as positive on this engineering company. It thinks investors should probably keep their powder dry for the time being due to challenging trading conditions. As a result, it has put a hold rating and $10.80 price target on its shares. It said:

The late June trading update lifted the FY26 Middle East impost to $60m EBITA (from $30-40m) and quantified the 2H FX impact as $50m. Medium term, WOR should see some earnings support from Middle East repair activity and a broader uplift in global upstream hydrocarbon spending driven by renewed energy security concerns. However, consensus already embeds strong growth into FY27 (Visible Alpha EBITA +12% YoY) which is well above industry forecast growth rates. With capex expectations continuing to soften in the key Energy end-market and the order book likely to roll over at the FY26 result, we retain our conservative view. We reduce our EBITA forecasts by 8-9% across our forecast period and cut our target price to $10.80 (from $11.80). HOLD maintained.

The post Buy, hold, sell: Pro Medicus, Worley, and ResMed shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Pro Medicus and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A 10-year investment period changes the way I look at ASX shares.

I am less interested in what might move next month and more interested in whether the business can become much larger, stronger, or more valuable over time.

The three ASX 300 shares below all look capable of doing that, in my opinion.

Catapult Sports Ltd (ASX: CAT)

Catapult Sports is one of the more interesting growth shares on the ASX.

The company provides technology used by elite sports teams to track athlete performance, manage workload, analyse video, and improve decision-making.

That may sound niche, but I think the long-term opportunity is attractive.

Professional sport keeps becoming more data-driven. Clubs and leagues are spending more on tools that can help them reduce injuries, improve training, support coaching decisions, and find small performance advantages.

What I like about Catapult Sports is that its products can become part of the way teams operate. Once performance staff, coaches, and athletes are using the platform, the relationship can become deeper and stickier over time.

This is still a growth business, so investors should expect some volatility. Catapult needs to keep converting its customer base and recurring revenue into stronger profits.

But over 10 years, I think the company has a genuine chance to become a much larger global sports technology business.

SiteMinder Ltd (ASX: SDR)

SiteMinder is another ASX 300 share I would be happy to buy and hold.

The company provides software for hotels, helping them manage bookings, distribution channels, direct sales, payments, and online visibility.

I like this business because it sits behind a problem that hotel operators face every day.

Hotels need to sell rooms across multiple platforms, manage pricing, reduce friction, and compete for guests in a digital travel market. That can be difficult, especially for smaller and independent operators. SiteMinder gives hotels the tools to handle more of that complexity in one place.

The travel sector will always have cycles. Weak consumer spending, economic slowdowns, and global shocks can affect hotel demand.

But the long-term shift toward digital hotel commerce looks hard to reverse. I think more accommodation providers will need better technology to compete.

And if SiteMinder keeps expanding its platform and improving monetisation, I think it could be a rewarding 10-year holding.

Bega Cheese Ltd (ASX: BGA)

Bega Cheese is a very different type of ASX 300 share.

It is tied to food, dairy, branded products, and everyday consumer demand. That gives it a more defensive feel than many smaller growth shares.

What interests me is that the Vegemite owner appears to have a clearer earnings improvement pathway.

Its FY26 EBITDA guidance is $222 million to $227 million. Looking further out, the company has outlined an FY31 EBITDA target of more than $310 million.

That growth is expected to be supported by investment in areas such as milk-based beverages, yoghurt, and Tatura cream cheese capability.

There are still things to watch, including input costs, supermarket pricing pressure, execution, and competition.

But if management can deliver on its targets, Bega could look like a much stronger business in 10 years.

Foolish takeaway

I think these are the kinds of ASX 300 shares that can reward investors who are willing to look beyond the next earnings update.

Each business still has plenty to prove, which is why I would not treat any of them as risk-free blue-chip holdings. But that is also where the opportunity sits.

Catapult, SiteMinder, and Bega Cheese all have clear ways to become better businesses over time, whether through deeper customer relationships, stronger platforms, improved efficiency, or expansion into higher-value areas.

For a 10-year holding period, that is what I want to see. The share price may not reward investors evenly along the way, but I think the long-term direction looks attractive.

The post 3 ASX 300 shares I would buy and hold for 10 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports and SiteMinder. The Motley Fool Australia has positions in and has recommended Catapult Sports and SiteMinder. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Evolution Mining Ltd (ASX: EVN) shares had a tough session on Thursday.

The gold miner’s shares ended the day almost 4% lower at $11.34 after investors reacted negatively to its fourth-quarter update.

While this is disappointing, Bell Potter thinks it could have created a buying opportunity for investors.

What is the broker saying?

Bell Potter was pleased with the company’s update despite production coming in softer than expected. It commented:

EVN released its June quarter 2026 production and cost report which, in our view, was a solid final quarter from EVN and was its second-best quarter of FY26. While both gold and copper production came in below our forecasts, Ernest Henry returned to full production following the weak March quarter and delivered its best quarterly performance of FY26. For the June quarter, group production was 179.7koz gold and 18.8kt copper (vs BPe 189.0koz gold and 19.6kt copper). 

The broker also highlights that the ASX gold stock has released part of its guidance for FY 2027, revealing that its costs are expected to rise and its investments will increase. However, it is comfortable with this. It said:

EVN released high-level elements of FY27 guidance. Overall, it pointed to steady production, but higher sustaining capital, higher AISC on general cost inflation and higher CAPEX on growth projects. It also flagged increased spending on exploration and on life-of-mine studies. While higher than our prior forecasts, we are comfortable the organic investment options are lower risk and higher returning than M&A in the current market. EVN has an excellent track record on this front, where returns on invested capital at Cowal, Ernest Henry and Mungari have been high.

Should you buy Evolution Mining shares?

According to the note, Bell Potter has retained its buy rating on Evolution Mining shares with a trimmed price target of $15.10 (from $16.45).

Based on its current share price, this implies potential upside of 33% for investors over the next 12 months.

In addition, Bell Potter is forecasting an attractive 4.4% dividend yield in FY 2027. This boosts the total potential return beyond 37%.

Commenting on its investment thesis, the broker said:

EPS changes on this update are -6% for FY26, -15% for FY27 and -4% for FY28. We have trimmed our production forecasts and increased our AISC forecasts in line with initial guidance for FY27. We have also lifted our capital expenditure assumptions in line with the outlook. As a result, we also trim our dividend forecasts on the lower free cash flow. 

EVN offers fully unhedged gold and copper exposure via a portfolio of high quality, long-life assets in Tier 1 jurisdictions, overseen by a high-quality management team. EVN has stated its intention to pass growing free cash flows on to shareholders.

The post Could Evolution Mining shares rise 33%? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Chemist Warehouse is one of the most recognisable businesses on Australia’s streets. It’s owned by Sigma Healthcare Ltd (ASX: SIG), which isn’t a household name, but I think Sigma is an appealing ASX share to buy.

The country’s leading pharmacy business may be best known for Chemist Warehouse, but it also has other elements to the company including Amcal, Discount Drug Stores and a pharmaceutical wholesale business.

However, with Chemist Warehouse making up a significant majority of the company’s earnings, I think it’s the right place for investors to focus because of three different reasons.

Excellent performance by the existing store network

When there are many different growth areas of a business to consider, I think it’s important to see that the core business is performing strongly for shareholders, which is happening at Sigma Healthcare.

The core Chemist Warehouse network in Australia is doing very well and continues to drive the value of the intrinsic value of the business higher.

In early May, the business gave a trading update which revealed the Australian Chemist Warehouse network delivered total sales growth of 16.7% year-over-year for the period of 1 July 2025 to 30 April 2026. This was mostly powered by like-for-like (LFL) sales growth of 14.4%, which is an excellent rate of growth, in my view, for a large retail business.

Thankfully, the company has tailwinds such as Australia’s ageing and growing population. Plus, pharmacies are a huge market, so there is still a lot of market share the company could claim thanks to its scale benefits and low prices.

I expect Chemist Warehouse will be able to expand its Australian network with more stores at a pleasing pace over the rest of this decade.

Growth of the international network

Australia is not the only growth avenue for the business. The ASX share also operates in New Zealand, Ireland, Dubai and online in China.

Its international store network delivered 24.7% total sales growth and LFL sales growth of 14.4% for the period 1 July 2025 to 31 March 2026. I expect the company’s store networks in New Zealand and Ireland to steadily expand.

Excitingly, Sigma is also going to enter the UK market thanks to a joint venture agreement with Greenlight Healthcare. Greenlight has 22 stores in and around London – Sigma will acquire a 75% interest in a number of stores, with the other 25% continuing to be held by Greenlight.

Under that joint venture, Sigma will licence the Chemist Warehouse brand and intellectual property, and provide retail support (including ranging, store layout, inventory management and marketing support).

Phase one will rebrand up to five stores initially, with the option for more stores if the first phase is successful.

Improving profit margins

In my view, the ASX share has an exciting future of sales growth ahead, but profit growth could be even better because the company’s increasing scale helps profit margins rise. Additional revenue dollars are becoming increasingly profitable in each reporting period.

For example, in the first half of FY26, the company reported that revenue grew by 14.9% to $5.5 billion.

Normalised operating profit (EBIT) grew strongly, rising by 18.7% to $582.9 million – faster than sales growth.

The normalised net profit after tax (NPAT) grew 19.2% to $392 million – faster than the EBIT growth.

It’s normally net profit growth that investors value a business on, so the profit growth looks very appealing to me. The company can use this net profit to fund more growth, pay down debt and/or pay rising dividends to shareholders.

Overall, there’s a lot to like about this ASX share, though it’s not the only name I’d love to have in my portfolio.

The post 3 reasons why the ASX share owner of Chemist Warehouse is a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Centuria Industrial REIT (ASX: CIP) is one of the high-yield ASX dividend stocks I’d be very happy to rely on for passive income rather than receive the Age Pension.  

While the ASX share market is a great place to find ideas that can help deliver passive income, there are relatively small number of names I’d be willing to significantly invest in.

This real estate investment trust (REIT) is one of the names I really like.

There is an appeal to REITs because of how defensive and predictable their income is, as rental income is contracted with tenants. REITs like this one have a range of high-quality tenants including Telstra Group Ltd (ASX: TLS), Woolworths Group Ltd (ASX: WOW), Arnott’s, AWH, Visy and Fantastic Furniture.

Why this ASX dividend stock is more appealing

The Centuria Industrial REIT owns a portfolio of high-quality industrial properties that are located in high-demand areas where the vacancy rate is low. This is helping drive up the rental income potential of the properties.

Another benefit of this investment is that owning all of these industrial properties, the ASX dividend stock offers investors significant asset backing, providing pleasing downside protection. The Age Pension does not have a large asset base that can be sold.

It’s also delivering good rental growth compared to many other property sectors. Industrial property is benefiting from tailwinds like e-commerce adoption, the onshoring of supply chains and data centres.

In the first half of FY26, the business reported 5.1% like-for-like net operating income (NOI) growth, which is a good growth rate for a REIT, in my view. Excitingly, the business reported that its portfolio was 20% under-rented, which suggests strong rental growth as contracts come up for renewal in the coming years – the business currently has a weighted average lease expiry (WALE) of more than six years.

The business grew its FY26 distribution by 3% year-over-year, which is a solid rate of growth amid higher interest rates. Over the longer-term, I think the business could have a very compelling future.

The final thing I’ll note is that the business is trading at a very large discount to its underlying value, which is measured as the net tangible assets (NTA) per unit. At December 2025, it had NTA of $3.95 per unit – that means it’s trading at a discount of close to 25%.

How many shares I’d need to match the Age Pension

Currently, the maximum Age Pension that an Australian can receive is around $31,200 per year.

Based on the FY26 annual payout of 16.8 cents per security, that level of passive income translates into a forward distribution yield of 5.6% (at the time of writing).

To receive $31,200 of annual income, an investor would need 185,715 Centuria Industrial REIT shares. While that would be a huge investment for most Australians, I’d be happy to make that purchase because of how cheap it is and what it can offer passive-income investors.

But, it’s not the only high-yield ASX dividend stock I’d buy for dividends.

The post 185,715 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Zip Co Ltd (ASX: ZIP) shares were among the standout performers on Wednesday.

The buy now, pay later (BNPL) provider surged 8.5% to $3.20, comfortably outperforming the S&P/ASX 200 Index (ASX: XJO), which rose just 0.4%.

The rally extends Zip’s gain over the past month to 19%. While the shares remain down about 2% year to date, they’re now up roughly 13% over the past 12 months.

So, what’s suddenly got investors excited?

America is the prize

A big part of the optimism centres on Zip’s growing US business.

The company has spent several years investing heavily in expanding both its customer base and product offering across America, which has become its largest market.

That’s a market investors simply can’t ignore. Compared with Australia, the US buy now, pay later market remains relatively under-penetrated, giving Zip a sizeable runway for future growth as more consumers and merchants embrace flexible payment options.

Management of Zip shares has also been busy strengthening its distribution network. Late last year, Zip expanded its partnership with Stripe, allowing merchants using the payments platform to seamlessly offer Zip’s services at checkout.

It’s a meaningful opportunity. Stripe serves millions of businesses globally, giving Zip access to a huge pool of potential merchants without having to knock on every door individually.

UBS believes that Zip shares could have a strong finish to FY 2026, with robust transaction growth in the key US market. According to a recent note, the broker has been pleased to see that US consumer spending has been resilient despite global uncertainty.

The numbers are finally backing the story

For years, investors questioned whether BNPL companies could generate sustainable profits.

Zip is starting to answer that question. Over the past several quarters, management has tightened lending standards, controlled costs, and shifted its focus firmly towards profitability.

Those efforts are paying off. In its third-quarter FY26 update, Zip upgraded its group cash EBITDA guidance to at least $260 million, up from previous guidance of around $248.6 million.

That’s exactly the type of earnings upgrade investors in Zip shares like to see. It suggests the company is proving it can grow while also delivering stronger profits. A combination that was largely absent during the sector’s boom years.

Not without risks

The opportunity is attractive, but investors shouldn’t ignore the risks of Zip shares.

Competition remains fierce. Zip is battling global heavyweights including Klarna, PayPal, Block’s Afterpay business, traditional banks, and credit card providers. Any increase in competitive pressure could squeeze margins or slow customer growth.

Like many growth companies, Zip is also highly sensitive to interest rates, consumer spending, employment conditions, and overall market sentiment.

That means shareholders should probably expect plenty of volatility along the way.

What do the experts think?

Broker sentiment remains overwhelmingly positive. Analysts at UBS have retained their buy rating on Zip shares with an improved price target of $4.10, which points to a further 28% upside.

Meanwhile, United Capital Partners is even more bullish, with a $4.85 price target, around 52% above today’s share price.

According to TradingView data, 11 of the 12 analysts covering Zip have either a buy or strong buy recommendation. The average price target sits at $4.17, implying potential upside of around 30% from current levels.

The most optimistic analyst believes Zip shares could climb to $5.59, representing upside of roughly 75%.

The post Could US expansion send Zip shares soaring further? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Superannuation is a great tool to help build wealth for retirement years.

By investing today, you can benefit from low tax rates, compounding, and eventually a tax-free passive income once you transition to the pension phase.

But how much do you need in your super to be able to get the passive income you want?

Let’s use a $6,500 per month passive income as a guide. Here’s a breakdown of how much you need, and how to get there.

How much do I need in my superannuation to get a passive income of $6,500 every month?

The easy calculation is for you to divide your annual passive income by the overall yield of your portfolio. Of course, the answer varies significantly depending what that yield is.

So first you’ll need to work out your annual passive income amount. If you’re aiming for $6,500 per month, that’ll be a total of $78,000 over the year.

It’s a large passive income, but its achievable if you have a high enough balance.

If your portfolio has a 3% overall dividend yield, you’ll need to have a total superannuation balance of $2.6 million to be able to earn your $6,500 per month passive income. That’s because $78,000 (your annual passive income) divided by 3% (your yield), is $2.6 million.

Then obviously, as your yield increases, the amount of money you need in your superannuation goes down.

So a superannuation portfolio with a 4% dividend yield would need to be $1.95 million in size to earn the same passive income.

Then a 5% yielding portfolio would need $1.56 million, a 6% portfolio would need $1.3 million, and a 7% yielding portfolio would need closer to $1.1 million to earn the same dividend income.

And so on…

So, if I invest in the highest-yielding ASX shares available, that means my balance can be lower and still earn the same?

Technically yes. But it’s not a good idea from an investment perspective.

When it comes to ASX dividend shares, generally the higher the yield, the higher the risk associated with that stock.

Rather than trying to get rich quick, it’s a better idea to concentrate on a diverse range of good-quality businesses with strong balance sheets and stable earnings. These stocks are most likely to stand the test of time and while also building wealth.

What does a diversified portfolio look like?

Say you eventually plan to have around $1.5 million in your superannuation to invest for passive income. You could earn around $6,500 per month off a portfolio yielding around 5% overall. 

That doesn’t mean that every investment in that portfolio has to be 5%. It can be a variation which equates to a combined overall 5% yield.

And remember, you don’t need to invest the whole sum in one go. Start with a monthly investment and let compound growth do some of the hard work for you.

For example, I’d look at splitting my portfolio into different yielding stocks. 

I’d look to have around 65% invested into mid-range yielding ASX shares around 4-5%, another 20% invested into slightly higher yielding stocks maybe around 6%, and the remaining 15% could be invested into riskier but much higher yielding shares.

I’d also look to buy the ASX shares across multiple sectors to diversify my portfolio even further.

It’s important to note that the majority of ASX shares pay their dividends every six or 12 months. Only a small handful pay every month.

Also be aware that while a 5% yield from a diversified portfolio is a reasonable long-term target, it’s not guaranteed and could fluctuate depending on the company’s profits. 

The post How much do I need in my superannuation to receive $6,500 per month in passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Perpetual Ltd (ASX: PPT) share price is in focus after the company revealed it has received a revised non-binding, indicative takeover proposal at $22.07 per share from EQT AB, up 2% from the previous offer.

What did Perpetual report?

• Received a revised non-binding indicative proposal from EQT AB to acquire Perpetual at $22.07 per share
• The offer is 2% higher than EQT AB’s original proposal of $21.64 per share
• Proposal remains conditional on several factors, including sale of Wealth Management to Bain Capital
• No shareholder action required at this stage

What else do investors need to know?

The new proposal from EQT is not yet binding and is subject to a range of conditions. These include completing the sale of Perpetual’s Wealth Management arm to Bain Capital, thorough due diligence, successful negotiation of binding agreements, and regulatory approvals.

Notably, EQT’s proposal states it would be withdrawn if disclosed. Despite this, Perpetual’s board has decided it is in shareholders’ best interests to be informed right away, demonstrating a focus on transparency.

What’s next for Perpetual?

Perpetual’s board and advisers are thoroughly evaluating the revised offer. However, there is no certainty a binding deal will be made or that any transaction will go ahead. In the meantime, the board remains confident in its ongoing business strategy, particularly the simplification program and the value of its diverse earnings.

Perpetual has committed to keeping shareholders and the market updated in line with its disclosure obligations. Investors are encouraged to stay tuned as the company updates on any major developments.

Perpetual share price snapshot

Over the past 12 months, Perpetual shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post Perpetual receives sweetened $22.07 EQT AB takeover bid appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.