There has been much discussion lately regarding whether we have seen the worst of the economic fallout from coronavirus or if the bottom is yet to come. Could clues lie in the performance of Afterpay and its cohorts?

What can we learn from Afterpay and other ASX FinTechs?  

Afterpay Ltd (ASX: APT), Tyro Payments Ltd (ASX: TYR) and EML Payments Ltd (ASX: EML) have all provided business updates that shed light on how the Australian economy may have bottomed in April. 

Afterpay Business Update 

Afterpay’s business update highlighted that its sales moderated in the second half of March at a Group level. This coincided with the introduction of government-enforced lock-down measures across the world. Global underlying sales in the second half of March versus the first half of March were 4% lower. 

However, the company experienced positive growth in the first two weeks of April, with average daily underlying sales up approximately 10% on the second half of March globally. 

Tyro Payments COVID-19 Trading Update 

Tyro has committed to providing the market with weekly transaction value updates. These transaction volumes are derived largely from its EFTPOs terminals installed at customer cites. It has so far highlighted the following transaction volumes: 

• January up 27% 
• February up 30% 
• March up 3% 
• April down 38% 
• May to 15 May down 20%

EML Payments Business Update 

EML’s unaudited Group EBITDA for March was $1.9 million, down 37% on the prior corresponding period. This was significantly impacted by its gift and incentive (G&I) segment reflecting global mall closures. 

While social distancing and lockdown measures continued in April, the group’s unaudited EBITDA was $2.7 million. It expects a gradual reopening of malls in various countries during May and June 2020 onwards. This should represent an improvement to the trading conditions experienced in April.

Is it a Bottom? 

All 3 businesses collect some form of commission from an economic transaction across multiple sectors. Afterpay has broad sector verticals including retail, travel, health, entertainment and services. It operates across Australia, the US and the UK. Tyro Payments provides payment services to over 30,000 Australian merchants. From its prospectus back in June 2019, it cited that 77% of its customers were SMEs and 86% were in health, hospitality and retail sectors. Finally, EML provides G&I services to retailers, general purpose reloadables for salary packaging and gaming and virtual banking accounts.

Recovering revenues from lows in April across these 3 companies may be reflective of a broader improving economy. Sectors such as retail and hospitality have already reopened, albeit at a limited capacity. Meanwhile, other sectors such as entertainment and travel are expected to resume later on this year.

Foolish takeaway

The current challenge is buying shares at today’s prices, as many have already soared on the assumption that we have, in fact, seen ‘the bottom’. If this is not the case, however, and further economic pullback is still yet to come, I believe this would present greater opportunities to buy shares at much more optimal risk/reward levels.

More reading

• How these 3 ASX financial shares have proved their doubters wrong
• How to use ASX shares to become a millionaire
• Is the Afterpay share price a buy at $44?
• 3 ETFs perfect for an ASX growth investor
• 2 ASX stocks that could replace cash

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and Tyro Payments. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Afterpay and cohorts could confirm the economy bottomed in April appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2yoss9Y

I’m a big fan of buy and hold investing and believe it is one of the best ways for investors to grow their wealth.

To demonstrate how successful it can be, every so often I like to pick out a number of popular ASX shares to see how much a single $20,000 investment 10 years ago would be worth today.

This time around I have picked out the three shares that are listed below:

BWP Trust (ASX: BWP)

BWP is a real estate investment trust with a focus on commercial properties throughout Australia. The majority of its properties are large format retailing properties leased to hardware giant Bunnings Warehouse. Despite its relatively simple business model, its shares have generated market beating returns for investors over the last decade. Since this time in 2010, its shares have provided investors with an average total return of 11.04% per annum. This would have turned a $20,000 investment into almost $57,000.

InvoCare Limited (ASX: IVC)

Although there have been a number of ups and downs along the way, this funeral company’s growth through acquisition strategy has been a success over the last decade. During this time the company has grown its network to 290 funeral locations and 16 cemeteries across the ANZ region and Singapore. This has underpinned solid earnings and dividend growth over the period, which has led to strong total returns for its shareholders. Over the last 10 years InvoCare’s shares have generated an average total return of 9.6% per annum. This would have turned a $20,000 investment into $50,000.

Magellan Financial Group Ltd (ASX: MFG)

This fund manager’s shares have been among the best performers on the Australian share market over the last decade. This strong form has been driven by its successful investments in high-quality global stocks that have benefited from a number of key themes over the past decade. These themes included the emerging consumer, the cashless society, and the dominance of business software giants. The sum of this was an average total return of 51.4% per annum over the last 10 years. This means a $20,000 investment in Magellan’s shares in May 2010 would now be worth a staggering ~$1.25 million.

More reading

• Why Downer, InvoCare, NRW Holdings, and Whitehaven Coal are dropping lower
• 3 high yield ASX dividend shares you can buy right now
• Why this ASX funeral share is well positioned for future growth
• Forget term deposits and buy these top ASX dividend shares
• Forget CBA and buy these top ASX dividend shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to turn $20k into $1.25 million in 10 years with ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gh3D0M

Here are three quick tips you can use to tidy your super in just 10 minutes this weekend!

Superannuation is probably the most overlooked asset in a typical Aussie’s net worth. Yet I think it’s vital for all Australian’s retirement prospects that we ensure our super is in order. Einstein didn’t call compound interest the ‘eighth wonder of the world’ for nothing, and that’s exactly what superannuation is designed to harness!

Super tip 1 – consolidate, consolidate, consolidate

I think everyone agrees that paying fees to your super fund manager isn’t fun. And yet there is far too many people paying at least double (often more) the fees than they otherwise should be. That’s the consequence of having two or more super funds. You don’t get a ‘buy one, get one free’ offer.

Unless you have a really good reason, I don’t think anyone should have more than one super fee or more than one fund taking their pound of flesh from your retirement. It’s won’t take more than a few minutes to consolidate your super, so make this weekend the time to do it if you haven’t already! It’s worth checking  – even if you don’t think you have more than one, you might be surprised!

Tip 2 – invest in an appropriate asset class

Most Aussies don’t give too much thought to how their super is invested on their behalf. In fact, superannuation giant AustralianSuper reports that over 90% of their customers opt for the ‘balanced’ option. But if you’re under 40 or have a higher risk tolerance, you might be missing out on some long-term gains by not selecting a more aggressive, share-dominated portfolio.

Balanced funds are designed to balance both risk and returns using ‘safer’, low-risk investments like cash and bonds. But risk management might not be really necessary if you’re decades out from retirement. And history shows that shares like those in the S&P/ASX 200 Index (ASX: XJO) are the best path to wealth creation

So have a think about your own risk tolerance and when you plan on retiring. You might come to the conclusion that you’re better off investing in a higher-growth option.

Tip 3 – focus on fees

There are only 3 things that will affect the amount of money you will have when you eventually decide to retire: the cash you put in, the returns you can get and the fees you pay. Of course, most people earn as much money as they can, so the first point is moot (although, you can also consider salary sacrificing). For the second point, see tip 2. 

But fees are something we can always control. The range of fees that various super funds charge is staggering. Some funds even charge their clients over 3% per annum. There are easy ways to compare your super fund’s fees online, so make sure you’re not overpaying for your retirement. These costs can literally drain tens of thousands of dollars or more from your retirement over a working life, so staying on top of them is something that you want to consider if you’re serious about retiring with as much money as possible.

More reading

• These were the worst performing ASX 200 shares last week
• Where to invest $1,000 in ASX ETFs today
• These were the best performing ASX 200 shares last week
• How these 3 ASX financial shares have proved their doubters wrong
• How to use ASX shares to become a millionaire

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to tidy up your super in just 10 minutes this weekend appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Zs2H3E

Last week was another positive one for the S&P/ASX 200 Index (ASX: XJO). The benchmark index climbed a sizeable 1.7% to end the period at 5,497 points.

Unfortunately, not all shares were pushing higher with the market last week.

Here’s why these were the worst performing ASX 200 shares over the period:

The Southern Cross Media Group Ltd (ASX: SXL) share price was the worst performer on the index with a 9.4% decline. This media company’s shares have been very volatile during the pandemic due to concerns over weak advertising markets and its highly dilutive capital raising. This latest decline means the Southern Cross Media share price is now down 86% from its 52-week high.

The Austal Limited (ASX: ASB) share price was out of form and fell 8.3% last week. This shipbuilder’s shares have come under pressure this month after it was overlooked for a major U.S. Navy project. Austal was competing to construct Guided-Missile Frigates, but was pipped to the post by Italian rival, Fincantieri. According to Reuters, the 10-ship contract is believed to be worth upwards of US$5.5 billion.

The Unibail-Rodamco-Westfield (ASX: URW) share price was a poor performer with a 7.9% decline. This led to the shopping centre operator’s shares hitting a record low last week. Investors have been selling the company’s shares amid concerns over lockdowns and the state of bricks and mortar retailing across the world. The Unibail-Rodamco-Westfield share price is now down 70% from its 52-week high.

The NIB Holdings Limited (ASX: NHF) share price wasn’t far behind with a 6.5% decline. This follows the release of government data last week which revealed that thousands of people have dumped their private health insurance during the pandemic. APRA’s data showed that younger demographics have been cancelling their policies during the three months to March 31. Cost savings and the inability to use their extras is likely to be driving the cancellations.

More reading

• How to tidy up your super in just 10 minutes this weekend
• Where to invest $1,000 in ASX ETFs today
• These were the best performing ASX 200 shares last week
• How these 3 ASX financial shares have proved their doubters wrong
• How to use ASX shares to become a millionaire

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has recommended NIB Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These were the worst performing ASX 200 shares last week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2LTwiv2

Early retirement is a goal or dream I’m sure most people share. However I believe that with a little smart saving and investing early, over time this dream can become a reality.

To see how, we will start by looking at a persons total economic wealth, showing how they can move into the retirement phase from the accumulation phase more quickly.

Total economic wealth

At any time in a person’s life, total economic wealth is represented as the sum of their financial capital and human capital.

What is financial capital?

Financial capital is basically the sum of all your assets minus your debts.To calculate your financial capital, add up all your savings, share portfolio, superannuation, properties etc, and subtract any debts such as mortgages or student loans you may have.

Obviously financial capital is lower for most people when they are younger as they have not yet had the time to grow their wealth. However, this is where people who are more responsible with their money can see it grow much faster as the effects of compounding take hold. This will help push them closer to their retirement phase.

What is human capital?

Human capital can be thought of as the present value of a person’s expected income from employment throughout their entire life. As you enter the workforce, your human capital is at a maximum since you have the greatest number of years left to work until retirement. Hence as you age and work, your human capital decreases.

So what does this mean?

Roughly speaking, human capital and financial capital are inverse to each other. This can be seen through the chart below.

Chart by author

As a working person ages, their human capital begins to reduce as part of their future earnings are realised. A portion of this income will be saved and often used to pay down a mortgage. In addition, their superannuation will increase as it is paid by their employer. All of these items will increase their financial capital. This continues through the accumulation phase until enough financial capital has been raised to support them through retirement. 

So it appears that the solution to being able to retire early is by growing your financial capital as quickly as possible. This doesn’t mean through risky investments, but instead by starting early and investing regularly. Which is where I believe ASX shares should come into the picture.

How to grow your financial capital

ASX shares have been a phenomenal tool for people to grow their financial capital. This is something I don’t believe will change any time soon. In fact, looking into the majority of  superannuation funds, you will see large allocations to shares – both Australian and international.

Your superannuation in designed to support you during retirement, while our goal is to bring retirement forward. This means investing outside of your superannuation, regularly.

Growing a large portfolio to replace your income prior to retirement may sound daunting. However, one of my fellow writers has shown here that by investing just $1,000 a month you can achieve a share portfolio of $1,000,000 in less than 24 years. Breaking it down into monthly goals is a great way to make the process more achievable.

Of course the sooner you start the better, and I believe now is a great time when you’re focusing on 10, 20 or 30 years down the road.

I would consider investments today in shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE) and BetaShares NASDAQ 100 ETF (ASX: NDQ).

More reading

• How to reduce your work to part-time using ASX shares
• My 3 best ASX dividend shares to buy right now
• 2 top ETFs for high growth
• 2 ASX shares I plan to hold til I’m 100
• 3 Warren Buffett ASX dividend shares to buy right now

Motley Fool contributor Michael Tonon owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to retire early using ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cXjijU

If you’ve saved up $1,000 and are looking to invest right now, ASX exchange-traded funds (ETFs) could be the way to go.

ETFs essentially allow you to buy units in a fund that invests in a diversified portfolio of shares. These funds come in many forms and can be specific to a particular country, like Vanguard Australian Shares Index ETF (ASX: VAS), or a sector like the ETFS Morningstar Global Technology ETF (ASX: TECH).

So, before you commit your hard-earned cash to the share market, let’s check out some of the best ASX ETFs to buy today.

Why should I buy ETFs in the first place?

ETFs are a great way to achieve instant diversification. Portfolio construction is critical but it takes time and money. If you’re just looking to invest $1,000 today, this may only buy you a few shares in the S&P/ASX 200 Index (ASX: XJO).

For instance, the CSL Limited (ASX: CSL) shares are currently trading at nearly $300 each which will eat up the majority of your investment for a grand total of only 3 shares in one company. 

However, an ETF like the Vanguard Australian Shares Index ETF gives you broad exposure to the S&P/ASX 300. This ETF essentially tracks the market and means you’re a passive investor.

Investing in ASX ETFs isn’t for everyone and many investors prefer to select individual shares to buy. If you’re a relatively new investor, however, or you like the diversification offered by ETFs, here are a couple of top funds to consider today.

Where to invest $1,000 in ASX ETFs today

I think ETFs have a place in almost any portfolio. Buying ETFs is an easy way to diversify or even target a specific sector or geography.

For instance, If you’re bullish about tech, the ETFS Morningstar Global Technology ETF can top up your exposure without buying shares in each individual tech company.

VAS and TECH aside, iShares S&P 500 ETF (ASX: IVV) could be a strong buy if you’re bullish about the United States. Federal Reserve Chair Jerome Powell is doing everything he can to keep the economy ticking along right now and we could see some strong gains in US markets as a result.

If you’re after an all-in-one solution, the Vanguard Diversified High Growth Index ETF (ASX: VDHG) could be for you. This fund is a diversified global portfolio with a heavier weighting towards the ASX.

Either of these could be great options if you’re just looking to invest $1,000 in a diversified portfolio but don’t know where to start.

More reading

• How to tidy up your super in just 10 minutes this weekend
• These were the worst performing ASX 200 shares last week
• These were the best performing ASX 200 shares last week
• How these 3 ASX financial shares have proved their doubters wrong
• 3 ASX shares that I’d invest $1,000 into EVERY month

Ken Hall owns shares of Vanguard Australian Shares Index and Vanguard Diversified High Growth Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and ETFS Morningstar Global Technology ETF. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where to invest $1,000 in ASX ETFs today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Zt6Nsv

Last week the S&P/ASX 200 Index (ASX: XJO) was on form again and stormed 1.7% higher to end the period at 5,497 points.

While a good number of shares pushed higher last week, some climbed more than most.

Here’s why these were the best performing ASX 200 shares over the period:

The NRW Holdings Limited (ASX: NWH) share price was the best performer on the index last week with a 31.3% gain. Investors were buying the infrastructure contractor’s shares following the least of a trading update. That update revealed that NRW delivered unaudited revenue of $1.6 billion for the 10 months to April 30. This represents record revenue for the company compared to any previous full financial year. NRW’s earnings before interest, tax, depreciation, and amortisation came in at $177 million for the 10 months.

The Nearmap Ltd (ASX: NEA) share price was on form last week and jumped 22% higher despite there being no news out of it. This gain means the aerial imagery technology and location data company’s shares are now up a massive 53.5% since this time last month. Investors may believe that Nearmap’s shares had fallen too hard this year.

The Lynas Corporation Ltd (ASX: LYC) share price wasn’t far behind with a 21.8% gain. This looks to have been driven by a positive broker note out of Canaccord Genuity. It initiated coverage on the rare earths miner with a buy rating and a target price of $3.80. The broker believes that rare earth demand could recover in a post-COVID-19 world. It suspects this could lead to a shortage of the materials by 2023, placing upward pressure on prices.

The Orocobre Limited (ASX: ORE) share price was a strong performer last week with a 21.7% gain. This was despite there being no news out of the lithium miner. Last week the price of the battery making ingredient stabilised after heavy declines a week earlier. And with economies around the world now reopening, investors may believe that the worst is over for Orocobre and its peers.

More reading

• How to tidy up your super in just 10 minutes this weekend
• These were the worst performing ASX 200 shares last week
• Where to invest $1,000 in ASX ETFs today
• How these 3 ASX financial shares have proved their doubters wrong
• How to use ASX shares to become a millionaire

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post These were the best performing ASX 200 shares last week appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cXjgbM

It’s becoming easier and easier to forget but, back in March, the S&P/ASX 200 Index (ASX: XJO) was in the throes of the fastest bear market on record. Between 20 February and 23 March, the ASX 200 fell over 35% – losing more than a third of its value in just 4 weeks. 

Since then, the ASX 200 has rallied over 20% – assuaging some of the nasty losses many ASX investors experienced. 

But some ASX financial shares have gone one better than the index by at least doubling in value since those March lows.

Afterpay Ltd (ASX: APT)

Afterpay shares have performed extremely well since the lows in March when investors sent this company back down to the bargain basement at ~$8 per share. Today, Afterpay has printed a fresh, all-time high and has just this week broken the $45 mark for the first time. That’s an increase of over 400% in just two months – now that’s a good size gain!

EML Payments Ltd (ASX: EML)

EML Payments is another payments company the ASX has decided it may have misjudged in March. Back then, EML plumbed depths of $1.20 per share. This week, however, EML shares were commanding almost $3.80 per share. That’s more than a 3-bagger in just two months. Got FOMO yet?

Credit Corp Group Limited (ASX: CCP)

Credit Corp is another financial company that the markets have clearly re-rated since March. Much like Afterpay, investors were initially very concerned over this company’s credit risk when the scale of the economic fallout from coronavirus became clear. 

But it’s obvious the market’s worst fears back then are no longer expected to eventuate. Since Credit Corp touched lows of ~$6 per share on 23 March, the stock has more than doubled and was trading above $15 for most of the week.

Notice anything in common yet?

Why are these ASX financial shares storming higher?

Well, in my view it’s all to do with credit risk. When it became obvious that our economy was destined for a nasty recession as a result of the coronavirus pandemic, any company that held large amounts of debt or credit risk was clearly not the first choice for investors. Recessions usually involve higher rates of loan default, which can quickly cripple any business, but especially those who don’t enjoy the scale and government backing of the big ASX banks.

What’s more, new-age financials like Afterpay and EML have never been tested in a recession, so clearly investors weren’t really feeling like taking a chance on these companies back in March. However, things have changed since then. For instance, Afterpay has reported its service remains more popular than ever, and that it isn’t facing the wave of defaults investors feared.

Foolish Takeaway

It’s ASX shares like these that once again show the benefits of taking a contrarian position ‘against the crowd’. It’s not always wise to bet against the market, but if you do it successfully, the results can be extremely lucrative.

More reading

• How to use ASX shares to become a millionaire
• Is the Afterpay share price a buy at $44?
• Top brokers are urging you to buy this slumping ASX 200 stock next week
• 3 ETFs perfect for an ASX growth investor
• ASX 200 drops 1% on Friday

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How these 3 ASX financial shares have proved their doubters wrong appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3bPy0YU

Investing in ASX shares to grow and build a passive income is a great way to reduce the hours you need to work. By initially growing an ASX share portfolio and then converting it to generate income means you could be working part-time sooner than you thought.

The basic idea

In November 2019, the Australian Bureau of Statistics found that an employee’s average weekly total earnings was $1,256.20. Rounding this slightly we will work with an average annual income of $65,000. Meaning, to work part-time we would need to offset around half of this, or $32,500.

The basic idea is to initially invest consistently in growth-orientated shares. Building a large enough portfolio which can then be focused on dividend shares to generate a passive income of $32,500.

When chasing an income from ASX shares, I believe it pays to be prudent. This means not just choosing the shares with the highest yields, but instead looking into the future to see how sustainable those yields are. For this reason, despite a  number of shares offering dividend yields of up to 10%, I believe a more reliable and achievable yield would be around 5% to 7% when we consider franking credits. So let’s take the middle ground and base our calculations on a 6% dividend yield for the portfolio.

This means, in order to generate $32,500 from a yield of 6%, we would need to grow a starting portfolio of $541,667.

Growing your portfolio

This is where the journey begins.

Growing a portfolio to $541,667 may initially sound a little like a fantasy. However, you may be surprised how quickly this could be achieved through consistent investing. 

In fact, if you were to invest just $1,000 a month and earn a market average return of roughly 10% per year, it would take just over 17 years to amass $541,667.

However, if you do your research well (and dare I say with a little luck) and manage to invest in growth companies which outperform the market, you could be working part-time much, much sooner. For example, if you had made investments into companies such as Altium Limited (ASX: ALU), A2 Milk Company Ltd (ASX: A2M) or even Macquarie Group Ltd (ASX: MQG) you would have significantly reduced the growing time.

Earning income from your portfolio

Once your portfolio has reached its capital goal ($541,667 in our average example) it will be time to slowly alter its holdings to dividend-focused shares. You may even have found that some of your growth shares are now paying meaningful dividends and can remain in the portfolio. However, to achieve your average 6% dividend return you will likely need to sell some of your growth shares and invest that capital into reliable dividend payers.

A few great ASX shares I would suggest to look at today when building an income-focused portfolio are Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Rural Funds Group (ASX: RFF), Dicker Data Ltd (ASX: DDR), and Vanguard Australian Shares High Yield ETF (ASX: VHY).

Foolish takeaway

Finding the right combination of shares to achieve your desired income may be a little tricky at first. Additionally, the income from your portfolio will be ‘lumpy’ as most companies pay dividends twice a year. However, over time and by choosing the right dividend shares, your income will also hopefully grow.

It may sound like a lot to take in. But, remember, this is the big picture. A great way to start will be by breaking it down into your monthly investments.

More reading

• Here’s how I would put $10,000 to work on the ASX
• Why I would buy these quality ASX dividend shares today
• The latest ASX small caps broker picks to buy today
• Fund managers have been buying these ASX shares
• Is the Altium share price a buy at $36?

Motley Fool contributor Michael Tonon owns shares of Macquarie Group Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited, Macquarie Group Limited, RURALFUNDS STAPLED, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of A2 Milk and Altium. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post How to reduce your work to part-time using ASX shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2XnzwfG

There are some ASX shares that I’d invest $1,000 into every single month.

I’m making the distinction because with some shares you wouldn’t want to commit to buying them every month. Sometimes individual ASX shares trade at good value and sometimes they aren’t.

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

iShares S&P 500 ETF (ASX: IVV)

One of the best potential investments that people can make is a S&P 500 fund. You can buy this ETF on the ASX but it gives you exposure to many of the best businesses in the world.

I’m sure you know many of its top holdings. Shares like Microsoft, Alphabet, Apple, Amazon, Facebook, Berkshire Hathaway and so on. There are plenty of other useful shares within the holdings like Walmart, Costco and Netflix.

Not only does this ETF give you exposure to much better global businesses compared to ASX shares. But you also get it for a very cheap management fee. Blackrock’s annual cost for this ETF is 0.04%. You could easily invest $1,000 a month into this.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

This is a listed investment company (LIC) which invests in global shares, but it also has a philanthropic aspect too. It donates 1% of its net assets each year to youth mental health charities.

It invests in globally-focused fund managers based in Australian which are judged to be among the best in the country.

The fact you get to be invested in so many portfolios is attractive. Each fund would have its own group of non ASX shares, so you might be invested in many dozens of different shares. I think that’s great diversification. At the moment it’s trading at a big discount to the underlying net tangible assets (NTA) per share. I think it offers a lot of positives, which is why I’d be happy to invest $1,000 a month into this.

Magellan High Conviction Trust (ASX: MHH)

You may not want an investment into a large group of shares. Perhaps you only want to be invested in a high-conviction portfolio of around 10 of the best shares in the world which you can’t find with ASX shares.

At the moment it’s invested in shares like Alibaba, Alphabet, Microsoft, Facebook and Visa. These are all great businesses which have good balance sheets, attractive growth prospects and digital business models which are good in times like this. I think it’s a great idea to invest $1,000 a month into something like this.

As a bonus it targets a 3% distribution yield.

Which ASX share to buy?

I think all three of these ideas are likely to achieve outperformance compared to most ASX shares and the ASX index as a whole. At the moment I’d probably go for Future Generation Global because it’s trading at such a large NTA discount.

More reading

• Save your future self from financial misery
• Don’t delay: Start investing today in shares to become rich
• The importance of diversifying your ASX portfolio and how you can do it
• The smartest shares to buy if you have $2,000
• How I’d invest $50,000 into ETFs

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

from Motley Fool Australia https://ift.tt/2zZ8280