Tag: Motley Fool Australia

If you’re looking for additions to your portfolio in June, then I think the three ASX 200 shares listed below would be great options.

I believe these shares are some of the best the ASX has to offer and could generate market-beating returns for investors in the future.

Here’s why I rate them as five-star stocks:

Appen Ltd (ASX: APX)

The first five-star stock I would consider buying is Appen. Through its million-plus team of crowd-sourced experts, Appen prepares the data that goes into the artificial intelligence (AI) and machine learning models of some of the biggest tech companies in the world. This includes the likes of Facebook, Microsoft, and Apple. In respect to the latter, Appen helped the tech giant develop its intelligent assistant, Siri. Given how important AI is becoming, I expect demand for its services to continue to grow over the next decade. This should underpin strong earnings growth for many years to come.

Nanosonics Ltd (ASX: NAN)

Nanosonics is another ASX 200 share that I would give five-stars. The infection control specialist has been growing at a very strong rate over the last few years thanks to the growing installed base of its trophon EPR disinfection system for ultrasound probes. The beauty of this product is that as its installed base grows, so too does the recurring revenue from the consumables it requires. While this product alone could drive strong earnings growth for the next decade thanks to its massive market opportunity, there will soon be more products in its portfolio. Nanosonics is planning to launch several new secretive products targeting unmet needs in the coming years.

REA Group Limited (ASX: REA)

A final five-star stock to consider buying is REA Group. It is a digital advertising company that operates Australia’s leading property websites. It also operates real estate websites in Europe, Asia, and the United States. While market conditions are tough at the moment, I expect the tide to turn once the crisis passes. When it does, I expect the realestate.com.au operator’s earnings growth to accelerate and drive its shares higher. All in all, I think REA Group is one of the best buy and hold options on the ASX.

More reading

• What to watch on the ASX 200 next week
• Why a stamp duty change could unleash the REA Group share price
• How to be an ASX 200 share millionaire in 15 years
• Where to invest $20,000 in ASX 200 shares today
• How you can get very rich with ASX 200 shares

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 Nanosonics Limited. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended Nanosonics Limited and REA Group 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 3 five-star ASX 200 shares to buy in June appeared first on Motley Fool Australia.

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

The idea of investing $50,000 for income is an important task that should be carefully thought out. You can’t just pick any ASX dividend share.

Just look at what has happened to the dividends of National Australia Bank Ltd (ASX: NAB) and Telstra Corporation Ltd (ASX: TLS). Big cuts over the past few years.

I’d only want to choose the best ASX dividend shares with rock solid income prospects:

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

Soul Patts is my favourite ASX dividend share. It has increased its dividend every year since 2000. It’s a unique income share when it comes to investing on the ASX. It has actually paid a dividend every year in its listed life going back to 1903.

It’s invested across a broad range of industries including telecommunications, pharmacies, building products and agriculture. It has already forecast an increased dividend in six months, which should bring some comfort to those who rely on dividends.

It pays the dividend out of the investment income it receives, less operating expenses, so the dividend is well funded. Some of the net cashflow is kept back to re-invest for more growth. It offers a grossed-up dividend yield of 4.5%.

WAM Microcap Limited (ASX: WMI)

It’s important to recognise that there are top ASX dividend shares outside of the ASX 20. Listed investment companies (LICs) have the ability to generate profits from capital gains made and then pay out a smoothed dividend for shareholders.

WAM Microcap invests in small shares with market capitalisations under $300 million. This hunting ground is where you can find some of the best opportunities. But you don’t need to do the work to find those ideas, you can leave it to the WAM investment team.

The LIC has been steadily growing its dividend since inception a few years ago. It currently offers a forward grossed-up dividend yield of 6.9%.

Brickworks Limited (ASX: BKW)

Brickworks is a diversified property business. I think it’s another of the best ASX dividend shares out there because it hasn’t decreased its dividend in over 40 years.

It has a high-quality group of building products businesses that supplies bricks, paving, masonry, precast, roofing and so on across Australia. It also owns a few brickmakers in the US after acquiring them recently. Long-term construction should remain a feature in the coming years.

But it’s okay that the coronavirus is causing disruption to construction right now. It can fund its reliable dividend from cashflow from the defensive industrial property trust it’s a part-owner of, as well as from its large shareholding in Soul Patts.

Brickworks currently offers a grossed-up dividend yield of 5.4%.

Rural Funds Group (ASX: RFF)

I think Rural Funds is quality ASX dividend share because of its consistent distribution growth. Management aim to increase the distribution by 4% every year.

The agricultural real estate investment trust (REIT) achieves this regular growth through contracted rental indexation and regular investing at its farms for productivity improvements for the tenant. This strategy is working particularly well with cattle farms right now.

It’s invested across a diverse array of farms including almonds, cotton, macadamias, vineyards and cattle.

It has already forecast a distribution of 11.28 cents for FY21, equating to a forward yield of 5.6%.

Future Generation Investment Company Ltd (ASX: FGX)

There are two big reasons to like Future Generation as an ASX dividend share.

The first is for its attractive grossed-up dividend yield of 7.4%. Paying a solid (and growing) dividend is one of the main aims of Future Generation. It has been steadily increasing the dividend over the past few years.

But the LIC doesn’t charge any management fees. Neither do the investment managers that Future Generation is invested in. Instead, it donates 1% of net assets each year to youth charities. I think that’s a great initiative to be a part of.

Foolish takeaway

If you don’t want to be buying or selling shares then I think the above five ASX dividend shares are great options. I’d happily invest $10,000 into each of them for long-term income. Hopefully all of them will grow (or at least maintain) the dividend during this difficult period.

More reading

• Beat low interest rates with these ASX dividend shares
• 10 top ASX growth shares to buy in June for strong returns
• How to make $1,000 a month in dividends
• 3 top ASX dividend shares to buy this June
• Why I just bought this ASX share for the long-term

Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO, RURALFUNDS STAPLED, WAM MICRO FPO, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, RURALFUNDS STAPLED, Telstra Limited, 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 Got $50,000 to invest for income? Pick these 5 ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36Lh44M

When it comes to super funds, most Australians would agree that there are a million more interesting things to occupy one’s mind and time with.

Nonetheless, our superannuation represents our retirement and can determine how we spend our golden years. Thus, I think it’s something all of us should at least be on top of.

Now, most Aussies without a self-managed super fund (SMSF) have their super in either a retail or industry fund. Typically, these funds will put your hard-earned 9.5% in what’s known as a ‘balanced’ fund. Has a nice ring, doesn’t it?

But a ‘balanced’ fund is not quite as cosy as it sounds. It’s typically the super company’s default choice, and is named for the ‘balanced’ manner it invests your money. This is normally across many different asset classes like private equity, government bonds, cash, property and (of course) shares.

Now, this strategy is okay. Not brilliant, but okay for most people. For investors, particularly ones with long-time horizons, it’s normally not the best choice.

The benefits of indexing through your super fund 

Firstly, this is because investors with decades left until retirement will likely benefit from an aggressive portfolio allocation, rather than the plain-Jane, vanilla balanced super fund. Your fund doesn’t really need defensive asset protection through bonds and cash if you’re in your 20s or 30s. Instead, you should be primarily invested in growth assets like ASX shares, international shares or maybe property.

These investments are more volatile, sure – but they’re also more likely to generate the best returns. And getting the best return you can, for as long as you can, translates into more money for your retirement.

Secondly, a balanced fund is normally expensive. Not usurious, but expensive all the same. A far better option (in my view anyway) is to simply invest in index funds.

Not all superannuation funds offer an indexed option, but many do. And you’ll find the ones that do will be up to 10 times cheaper than the fund’s default ‘balanced’ option.

It costs far less to invest your money in a couple of simple exchange-traded funds, such as iShares Core S&P/ASX 200 ETF (ASX: IOZ) and perhaps the Vanguard MSCI Index International Shares ETF (ASX: VGS), than employ a fund-managing team. And that’s all an indexed option would typically do.

Not only do indexed options charge significantly lower fees, but they will also often outperform the balanced or even the ‘aggressive’ managed options, saving you money on two fronts. Remember, the difference between 1% and 0.1% over 45 years can be astronomical to a fund’s final balance.

Foolish takeaway

Now, these aren’t universal truths and you will need to do your own comprehensive research into whether this strategy would work for you. But it’s a strategy I personally use and one I think is worthy of consideration for anyone who wants to maximise their super fund’s potential.

More reading

• How to make $1,000 a month in dividends
• Why it could be the perfect time to buy this Vanguard ETF
• Buy these 4 ASX shares to diversify your portfolio
• Australian ETF market sets an all-time record amid COVID-19
• The importance of diversifying your ASX portfolio and how you can do it

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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 This one super fund fix could save you thousands! appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Xfa90y

As we head into June it means one thing for ASX share investors: tax time. 

This Australian financial year ends 30 June 2020 and investors need to start getting their affairs in order. That means buying and selling shares in the next month or so can have big implications for your tax.

So, how do your ASX share trades impact your FY 2020 tax? What can you do to get yourself into the best shape possible?

What selling ASX shares means at tax time

The biggest factors to consider for investors will likely be capital gains and income.

ASX dividends are counted as ordinary income, which means they will be assessed as part of your FY 2020 tax. Capital gains can be a real advantage to investors because you choose when you realise that gain.

A capital gains tax (CGT) event is realised when you sell your ASX shares. For instance, the Xero Limited (ASX: XRO) share price has climbed higher in recent years and long-term investors might be sitting on a healthy profit.

Selling shares for a capital loss like Woodside Petroleum Limited (ASX: WPL) could also have implications at tax time.

Keep track of your portfolio

While many companies have slashed dividends, it’s important to know what your reportable income from ASX shares is for the year.

All the relevant information is usually obtained fairly easily after 30 June 2020 from your broker or share registry.

In terms of capital gains and losses, this requires a bit more calculation. If you’ve held your ASX shares for over 12 months, those profits will be subject to 50% CGT.

If you’ve been buying and selling during the recent bear market, any shares held for less than 12 months would be subject to 100% CGT.

It’s worth noting that a capital loss cannot reduce your income but can be used to offset a capital gain. That means you can reduce your overall tax if you’re selling losing shares and offsetting tax on your winners.

Use a tax adviser

Clearly, this tax stuff can get pretty complicated. That’s why finding a qualified tax adviser is a great idea. These professions can make your life easier and might even save you more on tax than you otherwise would get.

More money saved on tax could be more money spent on ASX dividend shares like Fortescue Metals Group Limited (ASX: FMG) for the years ahead.

More reading

• What to watch on the ASX 200 next week
• Is the Fortescue share price under threat from a potential multi-million dollar earnings hit?
• Should you worry about geopolitical events in investing?
• 3 cheap ASX 200 shares I’d buy today
• 2 ASX 200 tech shares I’d like to buy today

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. 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 What selling ASX shares means at tax time appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3chj2Lv

The S&P/ASX 200 Index (ASX: XJO) was on form last week thanks to strong gains in the banking sector. The benchmark index rose a sizeable 4.7% to finish it at 5755.7 points.

Will the ASX 200 be able to continue its positive run next week? Here are a few things to watch out for: 

ASX futures pointing lower.

The ASX 200 looks set to start the week on an underwhelming note. According to the latest SPI futures, the benchmark index is expected to open the week 24 points lower. This is despite a reasonably positive end to the week on Wall Street. The Dow Jones traded roughly flat, the S&P 500 rose 0.5%, and the Nasdaq index climbed 1.3%. This followed a press conference by President Trump. Although Trump warned that he would take action on Hong Kong, he hasn’t withdrawn the United States from its trade agreement with China.

Reserve Bank meeting.

On Tuesday all eyes will be on the Reserve Bank when it holds its latest monetary policy meeting. According to the latest cash rate futures, the market is currently pricing in a 47% probability of a rate cut to zero. On Friday the economics team at Westpac Banking Corp (ASX: WBC) revealed that they are not ruling out negative interest rates in Australia.

Iron ore miners could charge higher.

It could be a good week for ASX 200 iron ore miners such as BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO). According to Fastmarkets, courtesy of the AFR, on Friday the spot iron ore price jumped 5.5% to US$102.39 a tonne. The price of the steel-making ingredient surged higher following concerns that Brazilian supply could be impacted by the coronavirus pandemic.

oOh!Media annual general meeting.

The oOh!Media Ltd (ASX: OML) share price could be on the move on Thursday when it holds its virtual annual general meeting. It has been a tough few months for the media and outdoor advertising company. The advertising market has been hit hard by the pandemic, which has put significant pressure on its share price. The oOh!Media share price is down a massive 72% from its 52-week high. Investors will no doubt be looking for commentary around current trading conditions.

More reading

• Beat low interest rates with these ASX dividend shares
• How to be an ASX 200 share millionaire in 15 years
• 2 ASX shares to buy for strong retirement income
• Westpac isn’t ruling out negative interest rates in Australia
• Where to invest $20,000 in ASX 200 shares today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended oOh!Media 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 What to watch on the ASX 200 next week appeared first on Motley Fool Australia.

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

Experts are warning of more retailers hitting the wall even as our economy gradually reopens from the COVID-19 lockdown.

The ASX retail sector will be channelling Charles Dickens in thinking this is the worst of times but also the best of times.

That’s of course assuming they are in a small select group that are best placed to benefit from the industry consolidation that lies ahead.

Australia may lose 20% of retail outlets

Privately owned PAS Group became the latest victim of the coronavirus-triggered recession when it entered voluntary administration on Friday.

The group, which owns brands like Review, Black Pepper and Yarra Trail, employs 1,300 across 225 locations in Australia.

Brian Walker from consultancy The Retail Doctor told The New Daily that total Australian retail store numbers could fall by up to 20% over the next two to three years.

Survival of the fittest

ASX retailers aren’t immune from the pain, but those with a strong balance sheet are likely to profit from the bloodletting.

The hole left by collapsed competitors will be readily filled by the survivors, while cashed up retailers can pick up bargain assets.

UBS took a closer look at this emerging trend to identify the ASX stocks that are likely to come out stronger from the turmoil.

Categories most ripe for M&A

“While macro downside risks are decreasing, we expect pressure on many small/sub-scale retailers to build as stimulus ends (Sep-20), and online penetration accelerates,” said the broker.

“In this report we look at the share breakdown across 11 retail categories to assess where consolidation is most likely, and which listed retailers could benefit.”

The categories that have the most scope for merger and acquisition (M&A) activity include travel, automotive and outdoor specialist retailers, fashion, furniture and hardware.

On the flipside, the areas that have the least scope for consolidation are electronics, department stores and food.

ASX winners and semi-winners

Based on history and market structure, UBS believes Super Retail Group Ltd (ASX: SUL) and Wesfarmers Ltd (ASX: WES) will be the biggest winners from industry consolidation.  

However, Harvey Norman Holdings Limited (ASX: HVN), Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) should also benefit from this thematic, although maybe to a lesser degree.

On the other hand, Myer Holdings Ltd (ASX: MYR) and Premier Investments Limited (ASX: PMV) should also in theory gain an advantage from the industry shake-up, UBS said that end-customers desire for choice and growth in online will limit scope for gains.

Any upside for two is more likely to come from closing down weaker performing stores.

More reading

• How to be an ASX 200 share millionaire in 15 years
• 2 ASX shares to watch as sport returns
• The best ASX blue chip shares to buy in June
• The TPG share price is up 26.68% in 2020. Too late to invest?
• Are Coles shares a buy after falling 12% in 2 months?

Motley Fool contributor Brendon Lau owns shares of Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited, Super Retail Group Limited, and Webjet Ltd. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Flight Centre Travel Group 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 ASX retail shares best placed to benefit from wall of industry bankruptcies appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3gFrl7o

As I mentioned here earlier, the Westpac Banking Corp (ASX: WBC) economics team is not ruling out negative interest rates in the near future.

While I don’t personally expect rates to drop any further from here, it certainly is a possibility in the current environment.

Whether or not they do go lower, only time will tell. But one thing that I’m certain about, is that rates will be staying at ultra low levels for years to come.

In light of this, I think investors in search of income ought to look to the share market.

Three top ASX dividend shares that I would buy are listed below. Here’s why I like them:

Dicker Data Ltd (ASX: DDR)

Dicker Data is a growing distributor of computer hardware and software. It has an incredibly resilient business that continues to grow during the pandemic. So much so, this year the company intends to increase its dividend by 31% to 35.5 cents per share. This equates to a fully franked 4.5% dividend yield based on its last close price. Another positive is that Dicker Data is one of just a handful of ASX dividend shares that pay their dividends in quarterly instalments.

Rural Funds Group (ASX: RFF)

Rural Funds is a property company with a focus on Australian agricultural assets. Its properties are leased to experienced agricultural operators on long term tenancy agreements with fixed rent increases built in. This provides the company with a lot of earnings visibility. As a result, it has been able to provide distribution guidance for FY 2020 and FY 2021. It plans to pay shareholders 10.85 cents per share this year and then 11.28 cents per share next year. The latter equates to a 5.6% distribution yield.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

A third option for income investors to consider is the Vanguard Australian Shares High Yield ETF. I think this is one of the best exchange traded funds for income investors. This is because it gives investors exposure to a diverse group of high yielding ASX dividend shares through a single investment. At present I estimate that its units provide a forward dividend yield of at least 4.5%.

More reading

• 2 ASX shares to buy for strong retirement income
• Westpac isn’t ruling out negative interest rates in Australia
• How to make $1,000 a month in dividends
• Insiders have been buying these ASX shares this week
• 3 cheap ASX 200 shares I’d buy today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited and RURALFUNDS STAPLED. 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 Beat low interest rates with these ASX dividend shares appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/36PlszN

I think that a change to stamp duty could unleash the REA Group Limited (ASX: REA) share price.

At the moment the REA Group is suffering because the number of listings and property transactions has fallen due to the coronavirus pandemic.

Some of the activity has returned with a few social distancing restrictions lifted. Hopefully the country can get back to normal as quick as possible, including the normal property process. 

Both Victoria and New South Wales are thinking about changing stamp duty. Instead of being a large upfront cost it would probably be a yearly fee. Kind of like how council taxes/rates work. As the two biggest property markets, this would be an important change. 

Why would this make a difference to the REA Group share price?

In my opinion, changing stamp duty would motivate both buyers and sellers to transact sooner. Stamp duty can take up a lot of buyer’s cash. That means the buyer has to save for longer before they can buy. It might also then delay the upgrade to a larger house. This isn’t helpful for the REA Group share price. 

On the seller’s side of things, property owners are able to hang onto their properties for relatively little cost once the mortgage is paid off. But an introduction of an annual stamp duty tax/levy may encourage people to downsize a lot sooner if they’re being essentially being penalised for owning a house larger than they can afford. Or at least larger than their needs.

Obviously an increase in property transactions would add to REA Group’s earnings and therefore the share price. If you’re going to sell your house you want to list it on the most popular property portal so that you can reach the widest group of potential buyers.

In terms of brand power, I think REA Group is one of the best shares on the ASX. A return to somewhat normal life, a shift to more jobs working at home and a change to stamp duty could be very helpful to the REA Group share price.

More reading

• The best ASX blue chip shares to buy in June
• 2 ASX shares to buy and hold for monster returns in the 2020s
• Invest like Warren Buffett and buy these ASX 200 shares
• Which is the best ASX entertainment media share?
• Is the REA Group share price a buy?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group 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 a stamp duty change could unleash the REA Group share price appeared first on Motley Fool Australia.

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

The S&P/ASX 200 Index (ASX: XJO) has been on a rollercoaster in 2020 but it could be the perfect time to be an ASX 200 share millionaire.

A number of blue-chip shares have been smashed lower but I think there are good buying opportunities. Here’s how to make your millions from buying and holding high-quality shares for decades.

How to be an ASX 200 share millionaire in 15 years

Dividend yields can be a little bit misleading in times like these. However, I think any dividend cuts will be temporary while valuations have slumped lower.

If we look at a traditional valuation method of discounted cash flows, one year of lost earnings should only lower ASX 200 prices by 10% or so.

However, there are some absolute bargain shares trading much lower than that right now. 

Some of the Aussie real estate investment trusts (REITs) could be the key to becoming a millionaire in 15 years. REITs like Scentre Group (ASX: SCG) are down almost 42% in 2020 and are yielding 9.50% at the time of writing.

National Australia Bank Ltd (ASX: NAB) shares have slumped 27.91% this year amid the coronavirus pandemic triggering a bear market.

NAB shares are yielding 6.01% and just posted a $1.4 billion half-year profit. I think the ASX company can continue to churn out strong dividends. That income could quickly compound if reinvested and make you a millionaire within 15 years.

For some retail exposure, Harvey Norman Holdings Limited (ASX: HVN) shares are down 22% in 2020. The Aussie retailer’s shares are yielding 9.70% today and could build your share portfolio quickly.

Let’s say we start with a $75,000 share portfolio in 2020. If our ASX dividend shares can yield 7% per year and still get an average of 5% capital appreciation per year, we could be netting a 12% per year total return.

If we stash away $20,000 per year and reinvest our returns for 15 years, becoming an ASX 200 millionaire could happen sooner than expected.

That $75,000 portfolio could grow to $1,014,385 within 15 years and set the investor up for retirement. 

Foolish takeaway

Clearly, this is a simplified example and there are many variables to take into account when investing in real life.

However, a combination of luck and disciplined savings can go a long way in building your wealth. If you want to be an ASX 200 share millionaire, the best way to start is by building a diversified portfolio for the decades ahead.

More reading

• 2 ASX shares to buy for strong retirement income
• Where to invest $20,000 in ASX 200 shares today
• How you can get very rich with ASX 200 shares
• Can gold really protect your ASX share portfolio?
• How I would build a $100,000 ASX portfolio with ETFs

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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 be an ASX 200 share millionaire in 15 years appeared first on Motley Fool Australia.

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

Are you currently in or, perhaps, nearing retirement? Are you looking for a good strategy to get some extra income?

I believe that investing in ASX shares which pay high dividends is an excellent strategy for generating retirement income. 

They are also a much better alternative to keeping your money in a savings account or term deposit. The interest earned with these options often doesn’t even cover inflation.

So, with that said, here are 2 of my top ASX dividend share picks to buy now to provide you with extra income in retirement: BHP Group Ltd (ASX: BHP) and Macquarie Group Ltd (ASX: MQG).

BHP

BHP is my pick of mining shares on the ASX right now.

It has diversified operations across a range of divisions including iron ore, copper and aluminium, underpinned by a strong balance sheet.

The mining giant recently revealed that it expects to continue generating solid cash flow in its April quarterly activities report. It also revealed that its production guidance for the current financial year remains unchanged, despite the challenges faced by the coronavirus crisis.

Although demand for its products has slowed somewhat in key markets like the US, there are signs of recovery in China.

There are also early signs that economic conditions in Australia are starting to look increasingly favourable.

Therefore the demand for iron ore, in particular, could pick up in the second half of the year. Also, the Australian Government’s intention to stimulate our local economy with a range of new infrastructure projects could generate further local demand.

Based on current earnings, BHP also offers a very attractive forward fully franked dividend yield of around 6%. This would add nicely to your retirement income stream.

Macquarie

Macquarie is a global financial services business with a core focus on international investment banking.

I prefer Macquarie over Australia’s big four major banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

Over the past few years, Macquarie has become a more balanced and diversified business rather than being too focused on a small product set. This was a key reason why its share price was hit so hard during the global financial crisis.

Based on current earnings, Macquarie also offers a healthy forward fully franked dividend yield of around 3.8%. This could provide you with an attractive additional retirement share income stream. 

More reading

• Westpac isn’t ruling out negative interest rates in Australia
• Where to invest $20,000 in ASX 200 shares today
• Fund managers have been buying these ASX 200 shares
• Is the Fortescue share price under threat from a potential multi-million dollar earnings hit?
• 3 cheap ASX 200 shares I’d buy today

Motley Fool contributor Phil Harpur owns shares of Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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 2 ASX shares to buy for strong retirement income appeared first on Motley Fool Australia.

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