Having enough wealth to live on without needing to work sounds very nice indeed, doesn’t it?
Thing is, that level of freedom — a.k.a. financial independence — could be achieved by many of us. We either don’t know it or opt not to believe it.
It requires sacrifices, of course. That daily coffee, expensive holiday, brand new TV… the more you spend, the less you can invest.
To reach financial independence quickly, however, you also need to pick stocks delivering high levels of growth. Here are some examples I like.
High-growth stars
Keystone Law (LSE: KEYS) has made many friends since coming to the market. The legal company’s share price is now well over 150% higher than back in November 2017.
With a market cap of just £150m, I think there’s room for it to go even higher.
Back in January, the company announced that it had “continued to trade strongly” in H2 and that it was likely that profits would be “comfortably ahead of current market expectations”.
Confirmation of this is expected on 8 May. Regardless of how the market reacts in the short term (some profit-taking might ensue), I think this is one company that should definitely be on growth-focused Fools’ radars.
Ongoing investment in its infrastructure and ability to attract new lawyers and clients should allow it to continue grabbing share from other mid-market law firms going forwards.
My next pick is robotic process automation specialist Blue Prism (LSE: PRSM) – a company I bought a stake in not long after it listed.
It’s clear that the AIM-listed company’s software solutions — which help perform boring, repetitive tasks previously undertaken by a human (freeing the latter to do something more worthwhile) — are proving exceedingly popular. Revenue was £55.2m in FY18 — up 125%.
But it’s not just about the amount of time that companies are able to save. Blue Prism’s ‘robots’ never get sick, never need holidays and, let’s be honest, never complain.
With firms such as Coca Cola and Lloyds Bank already reaping the benefits of using its services, I continue to think this company will thrive.
Investment platform AJ Bell (LSE: AJB) is my final pick of stocks that I think will go from strength to strength.
The Salford-based business is one of the few IPO success stories in recent times with shares now trading for almost double the price they were back in December.
With interest rates on savings likely to remain low, it’s unsurprising that AJ Bell has more people signing up to its services and investing their money to generate better returns.
Total customer numbers increased 5% (to almost 215,000) in the three months to the end of March. Total assets under administration also climbed 8% to £47.7bn.
Interim results are due next month with the company predicting its financial performance will be “slightly ahead of current market expectations”.
Warning!
Nothing is guaranteed in investing. That’s why it’s vital to mention that all of the above trade on lofty valuations, making them arguably more risky to hold given that high expectations are easily dashed.
Keystone and AJ Bell trade on 40 and 58 times earnings respectively. Blue Prism doesn’t make a profit but is still valued at £1.5bn.
So, while I rate all three (and own stock in one), that’s not to say I wouldn’t prefer to wait for another general market wobble before buying.
