I enjoy researching individual companies and deciding which ASX shares I want to own.

But stock picking is not for everyone.

For an investor who wants a simpler way to build wealth over the long term, I think there is another option worth considering.

Building a portfolio takes work

Owning one or two ASX shares leaves a portfolio heavily dependent on what happens to a very small number of businesses.

To build reasonable diversification with individual stocks, I would be looking at roughly 20 companies spread across several industries.

That is certainly possible, but it also creates work.

I would want to understand why I owned every company, follow its results, keep an eye on management decisions, and decide whether anything had changed enough to reconsider the investment.

Some investors enjoy doing that. Others may have little interest in spending their spare time reading annual reports and company announcements.

For those investors, an exchange-traded fund (ETF) can make the process considerably easier.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The VGS ETF would be one of my preferred choices.

With a single investment, the fund provides exposure to more than 1,000 stocks across developed share markets around the world.

That immediately spreads an investment across many more businesses than I could realistically research and own individually.

It also takes me well beyond the opportunities available on the ASX.

Australia has plenty of excellent listed companies, but there are enormous global industries where the biggest businesses are based overseas.

Through this Vanguard ETF, investors can gain exposure to companies operating across technology, healthcare, industrials, consumer products, financial services, and many other parts of the global economy.

The portfolio also stretches across countries including the United States, Japan, the United Kingdom, and major European markets.

I don’t need to find every winner

This is probably the part I like most for someone who does not want to pick stocks.

Individual investing requires making choices. I could buy an ASX share that looks promising today only to discover several years later that a competitor executed better or an industry developed differently from what I expected.

With the VGS ETF, I do not need to work out which individual global companies will eventually become the biggest winners.

Successful businesses can grow into larger positions within the underlying index, while companies that lose ground become less important over time.

There will still be periods when the ETF falls. It owns shares, so investors should expect market volatility.

But company-specific disappointments have far less ability to derail the overall investment when the money is spread across such a large portfolio.

It could make investing easier to stick with

I think there is also something to be said for simplicity.

An investor could regularly add money to the VGS ETF without needing to find a new stock idea every time cash becomes available.

That could make it easier to remain consistent through both strong and weak markets.

Foolish takeaway

I still enjoy choosing individual ASX shares, and I think stock picking can produce excellent results for investors prepared to put in the work.

But it is not a requirement for building long-term wealth.

Rather than selecting and following around 20 individual ASX shares, I think the Vanguard MSCI Index International Shares ETF provides a simple way to own a large collection of businesses around the world with a single investment.

For someone who wants to spend less time researching stocks and more time simply staying invested, I think that is a compelling proposition.

The post Why I’d buy this ETF instead of picking 20 ASX shares appeared first on The Motley Fool Australia.

More reading

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• Could a $1 million superannuation balance provide $50,000 a year in retirement?
• Are these top Vanguard ETFs still a buy in September?
• What Warren Buffett’s investing style can teach superannuation investors
• How to build a winning ASX share portfolio and create wealth

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Certain ASX passive income ideas could be excellent picks to make $400 per month of dividends in 2027.

If dividend income is a key focus, then I’d want to concentrate on names that can provide defensive and even growing payouts.

I like stocks with defensive earnings because they’re more likely to sustain future passive income payouts. Let’s look at two top contenders.

Medibank Private Ltd (ASX: MPL)

Medibank is the leading private health insurance business in Australia with its Medibank and ahm brands.

In my view, the company has defensive earnings because healthcare is an essential service, particularly for older Australians.

Australia’s ageing and growing population gives the company compelling earnings tailwinds in the coming years.

The Medibank annual dividend was hiked by 6.7% in FY26 to 19.2 cents per share, following a 6.7% rise in group operating profit to $813.5 million.

I think the dividend is likely to grow again in FY27 because of the positive outlook comments.

It’s looking to grow market share with resident policyholders, it expects to deliver “solid” gross profit growth with non-resident private health insurance. The Medibank health segment profit is expected to grow 25%, and it continues to look for useful bolt-on acquisitions.

The passive income projection on Commsec suggests the business could pay an annual dividend per share of 21.5 cents in FY27. That would be a grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.

Rural Funds Group (ASX: RFF)

The other ASX passive income idea I want to highlight is this real estate investment trust (REIT) which owns farmland across Australia.

The farms it owns include almonds, cattle, macadamias, cropping, and vineyards. Those properties are spread across Australia’s mainland states, though Queensland and NSW account for most of the Rural Funds portfolio in dollar terms.

I think it’s a pleasing option for passive income because it pays a distribution quarterly, and the distribution yield is solid.

It has maintained its annual distribution at 11.73 cents per unit in the last few years amid high interest rates, which I think is a pleasing record of stability.

I think there’s good scope for future distribution growth because of the rental indexation built into its lease contracts. Some of Rural Funds’ rent grows at a fixed annual rate each year, while a significant portion of the rest grows in line with inflation.

It expects to pay an annual distribution per unit of 11.73 in FY27, which translates into a forward distribution yield of 5.9%.

$400 per month of passive income

I think both of the above businesses are among the top ASX passive income share options. To generate $400 per month, we’re talking about an annual goal of $4,800.

Between them, those two ideas have an average dividend yield of 6.3%, if we include the franking credits. Therefore, with a total investment of $76,191, someone could generate that target dividend amount.

But these aren’t the only stocks I’d choose to buy for dividend income.

The post 2 ASX passive income ideas I’d use to generate $400 a month in 2027 appeared first on The Motley Fool Australia.

More reading

• How much is needed in superannuation to target a $70,000 annual passive income?
• 3 ASX dividend shares with yields over 6%
• How much do I need to retire on $80,000 a year at 50?
• 2 great ASX dividend share buys for passive income in September
• Buy, hold, sell: Medibank Private, Ansell, South32 shares

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There is likely something fun about checking your superannuation in your 50s because the numbers can start moving surprisingly quickly.

By this stage, many Australians have been receiving compulsory super contributions for decades, while a larger balance gives investment returns more money to work with. 

At the same time, retirement is close enough that knowing whether you are ahead, behind, or somewhere around the middle becomes increasingly relevant.

So, what does the average Australian actually have in super at 50 and 55?

The average superannuation balance at 50

The latest figures published by Moneysmart, using Australian Prudential Regulation Authority data, group Australians into five-year age ranges rather than individual ages.

For Australians aged 50 to 54, the average superannuation balance is now $190,500.

That provides the best current guide for someone turning 50, although an individual balance could obviously be much higher or lower depending on income, career breaks, investment performance, and whether additional contributions have been made.

The figure also shows that reaching 50 does not mean the heavy lifting is finished. Someone at the beginning of this age bracket could still have 17 years before reaching Age Pension age, leaving considerable time for further contributions and investment growth.

What about at age 55?

Move forward one age bracket and the average rises meaningfully.

Australians aged 55 to 59 have an average super balance of $234,700, which is $44,200 higher than the average for those aged 50 to 54.

That increase is a good reminder of what can happen during the latter stages of a career. Contributions continue to arrive, while returns are compounding on a larger pool of savings than earlier in life.

For someone turning 55, there may also be opportunities to direct more money towards super if household finances allow, particularly if mortgage repayments or other major expenses have started to ease.

How does that compare with retirement needs?

Moneysmart currently points to an Association of Superannuation Funds of Australia estimate of $630,000 for a single homeowner seeking a comfortable retirement at age 67.

That makes the average balances at 50 and 55 look some distance away from the eventual target, but it is important not to compare them too literally. These Australians still have years of potential contributions and investment returns ahead of them, while couples can also combine their retirement resources.

Housing, other investments, how much you have in your Commonwealth Bank of Australia (ASX: CBA) savings account, expected spending, and eventual Age Pension eligibility can all substantially change how much super someone needs.

For anyone around 50 or 55, the average is therefore best treated as a checkpoint rather than a goal. A balance of around $190,500 or $234,700 shows what Australians in these age groups currently have, but whether it is enough depends far more on where you want to be when work eventually ends.

The post Here’s the average Australian superannuation balance at 50 and 55 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.