Unless you are one of the lucky few who relish what they do from nine to five, you’ll be thinking how to retire from full-time work at the earliest opportunity. If, like me, you have other things you want to try before you die, you will want to maximise your retirement savings so you can quit the time-sucking drudgery of work.
Type “How do I retire early?” into your search engine, and you will see thousands of articles on how to do it. The problem is most of them contain only generic advice: work out your financial needs, start saving early, keep your outgoings low, make your money work for you and so on. There’s nothing wrong with this, but most serious savers I know want more detail. How exactly do you put your money to work? What asset classes ought to be included? What weighting should be given to each? Which individual investments should you consider and why?
Of course, the answers to these questions depend on a person’s attitude to risk, his/her financial expertise and the amount of time available to devote to researching and implementing a savings plan. Some prefer their money to be managed by expert fund managers so they can enjoy the benefits of diversification and not have to worry about choosing individual investments or monitoring a portfolio daily. If, however, you are like me, you will want a lot more control. I like to know exactly where my savings are always. Generalised six-monthly reports from a fund manager won’t do.
For those who prefer hands-on involvement, there is a constant requirement for information. And if you want to include stocks in your portfolio — something I believe is essential to any early retirement plan — then you need much more than generic advice. You need specifics. This is where financial websites like The Motley Fool can help with investment ideas and strategies.
Mega-brands
Having spent 30 years as an investor, here’s one stock I’ve liked for a long while and I believe could form part of any sensible long-term savings plan. It’s one of those stocks I have on my sleep-well-at-night list.
Reckitt Benckiser Group (LSE: RB) is a member of the FTSE 100 and my preferred consumer goods pick right now. It enjoyed an operating profit margin of 27% over the last 12 months and generated a solid 15% return on equity, both of which I would expect to continue given the sizeable moat around this business. For those who are looking for income, the stock yields almost 3% and is well covered.
The share price has come off its high of two years ago, mainly because of an expensive cyber-attack in 2017, but that doesn’t worry me. I try not to get too distracted by issues like that; investors need to look beyond short-term noise. I believe this owner of mega-brands such as Dettol, Durex, Nurofen and Clearasil will be a great hold for many years to come. Why? Well, despite coming off its peak, since the beginning of this millennium, the stock has risen seven-fold. And remember, that period includes the financial crisis of a decade ago.