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Investing in high-quality FTSE shares is a proven long-term wealth-building strategy that, when executed successfully, can deliver life-changing results. What’s more, even when starting from scratch at the age of 43, there’s still plenty of time to secure a more comfortable retirement.
Here’s how.
Building a six-figure nest egg
Starting an investment journey early comes with a lot of advantages. But in Britain, with wages stagnating and the cost of living climbing, a growing portion of the population is entering their 40s with minimal retirement savings.
However, by consistently drip feeding a decent lump sum of capital each month into FTSE 100 index trackers, even older investors can still benefit from the miracle of compounding.
Investing £500 a month at the historical average return of 8% a year grows into a nest egg of roughly £173,000. Increasing the monthly contributions to £750 boosts this portfolio to £259,500. And those able to stretch their budget even further to £1,000 a month could reach as high as £346,000.
But through stock picking, it’s possible to aim even higher.
Accelerating compounding
Rather than relying on an index fund, investors can be far more surgical, allocating capital to only the best FTSE shares on the market. This is obviously easier said than done and requires far more effort and discipline. But for those who intelligently craft a winning portfolio, the results can be life changing.
Even if a custom-built portfolio manages to generate just an extra 4% a year compared to that long-historical average of 8%, it could be the difference between retiring with £346,000 and half a million. Combining this with the State Pension, a private pension from work, and a paid-off house, the quality of a retirement lifestyle could be drastically improved.
So which FTSE shares are able to deliver that extra 4% gain?
A FTSE stock to consider
Sadly, it’s impossible to know for certain which companies will be the biggest winners over the next 15 years. But one business that I think has the potential to be in this category is Rightmove (LSE:RMV).
Despite already dominating the market, the UK’s leading online property portal continues to innovate. And home buyers as well as sellers are increasingly becoming more reliant on its new tools and platform features, enabling the business to maintain robust and consistent growth at a staggering 65% operating margin.
With Rightmove already expanding into adjacent verticals like rental properties, mortgages, and even commercial properties, its grip on Britain’s real estate sector continues to diversify and strengthen. And based on long-term analyst growth projections, Rightmove’s earnings are expected to continue compounding by 10% each year alongside a near-2% dividend yield.
However, that’s far from guaranteed. Some uncertainty’s beginning to creep in as more competitive threats emerge, attempting to steal its crown. Management thwarted previous multiple attempts of leadership disruption, but this nonetheless remains a threat to watch closely.
At the same time, it’s important to recognise that Rightmove’s profits are sensitive to activity within the British housing market. Any sudden downturn or a radical change in property taxes could prove quite disruptive.
Nevertheless, with a proven track record, rock-solid balance sheet, and ample growth potential, these risks may be worth considering when aiming to build long-term wealth.