Compound interest has been described as the eighth wonder of the world.
For the benefit of the young ones and those of us getting on a little but still with time to make a serious difference to the level of comfort in our retirement if you can find an investment that will grow earnings or give you a net return after tax of 10% per annum and you reinvest all proceeds after 10 years that $1m will become $2.59m, after 15 years $4.17m and after 20 years $6.73m.
Warren Buffet reckons you only need a few good idea's to get really rich and I think he's right because after 30 years that $1m compounded at 10% per annum gives $17.5m.
No question the tax working group currently contemplating options presents as a regulatory risk but whatever they regulate could just as easily be overturned by a more business friendly government. Currently a net 44% of business's think business conditions will deteriorate, a shocking statistic not seen since the depths of the GFC.
There's been some really good idea's put forward in this thread. Companies including among others like Port of Tauranga, Fisher and Paykel Healthcare, Infratil, Frieghtways, Mainfrieght all make a good case for themselves in my opinion.
My pick however is Ryman. The best guide to the future in my opinion is the past and Rym have built a stellar reputation for consistent growth but perhaps even more than that they have built a stellar reputation for being the brand of choice and as we head into the tsunami of baby boomers looking for a comfortable place to spend their latter years its the brand value of Rym that sets it apart in my view. In deciding on Rym I excluded all companies that haven't been listed for at least 10 years. Rym listed in 1999 at $1.35 if my memory serves me correctly. They closed the week at $12 and had a five for one share split a number of years ago so adjusted this is $ 60. 44.5 times your money in 19 years.
No doubt there's many other fine alternatives so no right or wrong answers but to my way of thinking its a classic bottom drawer buy and forget about it kind of stock. I've been pontificating about whether its worth $12 or only $11 based on my observed long term average PE. It won't matter 10 or 20 years from now will it
SUM other stocks enjoy the same tax efficient model and are off to a good start in building wealth for their shareholders too. I think the business model as it currently stands for these companies and the demographics make for a compelling investment case.
Originally Posted by Beagle
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