The Motley Fool

3 simple steps to get rich, retire early and beat the State Pension

While it may seem that the prospect of retiring early is becoming increasingly unachievable due to a rising State Pension age, the stock market continues to offer a potential vehicle for achieving this goal.

Certainly, in the near term there may be uncertainty ahead due to risks such as a global trade war and Brexit. But by focusing on shares rather than cash, investing in undervalued stocks and holding them over the long run, the potential to get rich, retire early and beat the rising State Pension age may be higher than many people realise.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Cash vs shares

While Cash ISAs continue to be more popular than Stocks and Shares ISAs, it is the latter which could offer higher returns in the long run. Although in previous decades interest rates may have provided savers with a generous income return, in the last decade interest rates have been at historic lows.

This situation could persist for many more years, with interest rates expected to move higher at a relatively slow pace. With Brexit risks being high, the Bank of England may not wish to risk the future growth rate of the economy by adopting a tighter monetary policy.

By contrast, the stock market continues to offer long-term growth potential. The FTSE 100, for example, has a dividend yield of around 4.5%. This indicates that it may be cheap at the present time. As such, investing capital, rather than saving it, could be a worthwhile move.

Value stocks

While the UK stock market may have experienced a decade-long bull run, there are a number of large, medium and smaller companies that appear to offer good value for money. Therefore, investors who are looking to capitalise on the growth potential of the stock market may be able to put together a highly appealing portfolio that offers growth potential plus diversity.

Although value shares are often unpopular in the short run, they can deliver impressive returns over the long term. Since many people who are investing for retirement are likely to have long-term views, they will have the time for value stocks to come good. As a result, they could be the most appealing risk/reward opportunities available.

Buy and hold

While a buy-and-hold strategy may sound rather obvious when it comes to investing in the stock market, doing so can prove to be challenging. In other words, when a bear market comes along, it is tempting to sell up and avoid potential future paper losses. Likewise, investors may cash in on profits generated during a bull market too early.

Indeed, it makes sense for an investor to allow the companies they hold to implement their strategies and for the stock market to then factor in their full potential. If there are better opportunities available elsewhere, selling could be an option. But in many cases, simply buying good stocks and allowing them the time they need to generate capital growth is a worthwhile move for anyone who is seeking to get rich, retire early and beat the State Pension.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US $12.3 TRILLION out of thin air…

And if you click here, we’ll show you something that could be key to unlocking 5G’s full potential...

It’s just ONE innovation from a little-known US company that has quietly spent years preparing for this exact moment…

But you need to get in before the crowd catches onto this ‘sleeping giant’.

Click here to learn more.

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

The renowned 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 enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.