Retire with $1 million
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Date Posted:
May-10-2010 16:00
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Here’s the good news: the odds of you becoming an instant millionaire are 37-to-one. All you need to do is sell everything you own and borrow as much money as possible from friends, then head to the casino and put it all on one number at the roulette table. If the ball lands on that number, job done!
The one tiny flaw in this otherwise brilliant plan? You’re much more likely to lose everything. The alternative – but slightly more boring – approach to attaining wealth is shrewd investment in capital growth. Here’s how.
1. Shares
When you invest in the share market you’ll be relying on the business activities of major corporations listed on the Australian Securities Exchange (ASX). When putting together a share portfolio, you should spread your risk and buy companies that operate in different sectors of the Australian economy.
One great thing about shares is that they can tick all the right boxes: capital-growth opportunities; dividends; tax benefits; liquidity; minimal entry and exit fees; and no holding costs. Unfortunately, the trade-off here is “volatility”: there’s a risk they could fall in value and burn your dough. But, as the cliché rolls, one doth have to be in it to win it.
A good starting point is investing in the top 20 companies that make up Standard & Poor’s ASX 20 index, as these companies represent over half the wealth of Australia. You’ll generally find that the more profitable these companies become, the greater the chance your shares will increase in value.
Two more top-level tips to set you on the road to riches...