Not all Australians may like it, or realise it but the stock market will continue to be the best driver of our wealth for many years into the future…
Below, I'll prove it to you…
But first, consider this. Whether you invest through a Self-Managed Superannuation Fund (SMSF) or your own brokerage account, making the decision to prepare yourself for retirement early in your life, cannot be overstated.
Even if you're current retirement nest egg isn't as big as you'd like, it's never too late to start growing your wealth…
For example, just $10,000 invested in Australian shares 30 years ago would be worth $278,000 today. However if you invested your $10,000 in cash then it'd be worth just $96,487.
But before you say, "Well $96,000 isn't so bad", it's important to note that during the late 1980's and early 1990's interest rates above 15% were common! That's in stark contrast to the 2.5% interest rates on offer today.
I'll admit though, interest rates could climb much higher in 10 years' time. No one truly knows.
But just think how many households would cope with 10% interest rates on their huge housing loans today. My guess is: Not many.
4 Australian retirement stocks you can't ignore
In retirement, many of us will want regular income from our investments, to avoid chewing through the lump sum we start with. Currently, interest on some savings accounts and term deposits isn't even beating inflation, let alone providing a reliable source of income.
However dividends from Australian stocks (which can include tax-effective franking credits) are a viable alternative for long-term investors.
Investing in sustainably growing companies with strong financials has proven to be an extremely successful strategy for growing individual wealth over time.
With that in mind, here are four stable dividend stocks which investors can buy and hold for the long term.
1. BHP Billiton Limited (ASX: BHP) is Australia's biggest and best miner. Unlike Rio Tinto Limited (ASX: RIO) who's massive reliance on iron ore is worrisome, BHP has a diversified revenue base and strong balance sheets. This enables it to pay a consistent dividend. In the next year, it is forecast to pay a fully franked 4.3% distribution.
2. Coca-Cola Amatil Ltd (ASX: CCL) bottles and/or distributes products which are household names right across the country. Through exclusive agreements, CCA offers Coca-Cola and Beam branded products to Australia, New Zealand, Indonesia and a select number of neighbouring countries.
3. ResMed Inc. (CHESS) (ASX: RMD) is a global biotechnology company which produces respiratory products for sufferers of sleep apnoea and other related disorders. Despite being an $8.3 billion company, its market place is huge and growing. In the next 12 months it is forecast to pay just a 2.2% dividend, although higher payouts can be expected over the long term.
4. Scentre Group Ltd (ASX: SCG) is the owner of Westfield shopping centres and properties throughout Australia and New Zealand. The group currently trades near book value and offers a 5.6% dividend.
A better dividend stock idea than Scentre Group…
