The Motley Fool

How to save over £1 million by retirement – starting today

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Making a million by the time you retire is a goal which many investors work towards throughout their careers. While some make it, many don’t. The reasons for this include a lack of savings as well as lower-than-expected investment returns. Of course, the longer an investor has to save and invest for retirement, the better. But making a million by retirement could be possible for a range of people at different stages of their lives.

Savings are core

Of course, investing is not possible without saving money. Capital is required in order to generate investment returns of any kind. Clearly, working harder is one option, but assuming an individual is already working full-time, one way to increase saving is to spend more wisely. And with the onset of the internet, finding the best deals on a variety of goods and services has never been easier.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

One example is the use of cashback websites. They provide an individual with a cash sum simply for registering and clicking on a link before purchasing a product from a specific retailer. Another example is price comparison websites where it’s possible to reduce utility bills, insurance costs and a number of other regular costs. By reducing recurring costs by even a small percentage, it could free up capital that could be used to invest in shares.

Buy-and-hold

Perhaps the biggest mistake that investors make when buying and selling shares is that they do it too often. Patience is a difficult asset to acquire for any investor, but the reality is that trading less frequently reduces commission costs. It also means the companies held by an investor have the time to come good. Changing strategies, favourable market conditions and low valuations can take many years to filter through into a higher share price. As such, buying-and-holding for the long run seems to be a shrewd move for investors seeking to make a million.

Risk/reward

Making a million may not require a high-risk strategy due to the potential impact of compounding on returns. Therefore, while buying a range of smaller companies or stocks in specific, high-growth industries such as resources may be alluring, it may not lead to high overall returns in the long run.

In fact, buying companies with solid fundamentals and that pay a high, rising dividend could be a worthwhile approach. In time, such companies could post total returns in the high single-digits per annum, and this may create significant returns in the long run. And with the potential to buy shares in any major index now being available to all investors with access to the internet, the opportunities to pick the very best stocks in the world are more exciting than ever.

Disciplined investing

While making a million is never easy, by focusing on being a disciplined investor it is possible to reach a seven-figure goal. Saving money is rarely as fun as spending it, holding shares is less exciting than trading them and focusing on dividends over an enticing ‘story’ is not how most people would choose to invest. However, those areas are probably what makes the biggest difference to your chances of making a million by retirement.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.