It’s all well and good to say you can turn a $100,000 investment into a $1,000,000 investment, but let’s be honest: who has that kind of money just sitting around?
I’m sure there are a few of you out there, but if you’ve clicked on this article, you’re likely not one of them. Take me for instance. With one daughter and another on the way, I’m simply unable to use the contribution room allowance of the TFSA, but do have about $25,000 invested. So let’s take that as an example of a solid amount in an average TFSA.
Again, if you’re a millennial like me, you’re likely looking to save for a few decades, not a few years before retirement. That doesn’t mean these aren’t still great choices, but it does mean that you won’t see the huge gains that I’m hoping to make.
So let’s take a look at the three stocks I’d recommend that should make you rich over the next few decades with just an average $25,000 TFSA.
To start, we have to make some assumptions and figure that these stocks are going to continue the trend they’ve been on for the last few years or decades. With that in mind, Canadian National Railway Company (TSX:CNR)(NYSE:CNI) belongs at the top of my “buy” list.
This company has a duopoly on the railway industry, offering a cheaper way to ship a vast array of materials across North America. To be honest, it’s not going anywhere soon. Even better, it would be pretty much impossible for any other company to edge in on its business.
The company is also in the process of reinvesting in its fleet and infrastructure, making now a great time to buy ahead of some potential jumps in share price.
This company’s IPO in 1995 had a share price of about $4 per share, and this stock is worth $121.40 per share at writing, an increase of 2,935% in 24 years! If you’re looking to the future, that could bring its share price to $3,563 in the next 24 years.
Another must buy if you want to eventually get rich is Enbridge Inc. (TSX:ENB)(NYSE:ENB). This company has a lot in its favour, and like CNR, it offers investors a way to buy and hold for decades without worrying about this stock.
The reason? The company has two things going for it: current expansion and long-term contracts. Right now, the company is in the middle of a growth plan that over the next few years will see a number of new and expanded pipelines come online. As well, the company has long-term contracts that will see cash coming in for decades.
That means you don’t have to worry about this stock going anywhere. Since 1995, the company has grown from a share price of about $3.50 to where $50 per share at writing, an increase of 1,567% in 24 years. Again, if you’re looking ahead, that means shares could be worth $784 per share in the next 24 years.
Finally, last but certainly not least is Onex Corporation (TSX:ONEX). This private equity and investment firm has a long-standing history of buying companies at the right time and making the investment to see them grow.
This was recently witnessed with the purchase of WestJet Airlines. While there hasn’t been anything to come out of the deal just yet, analysts are excited at the prospects, giving the share price expected growth of almost 30% in the next 12 months.
If you look at this company’s performance in the last 24 years, it too has been on a fairly steady rise, declining only in 2017. But even so, buying this stock at about $3 per share back in 1995 means a gain of 2,488% in the last 24 years, which means that shares could be worth $1,932 in the next 24 years.
Make it rich
Using that $25,000 and looking forward 24 years, I would invest most in CNR, then Enbridge, and finally Onex in order of steady growth. That would leave you with $12,500 in CNR, which becomes $367,168; $7,500; Enbridge turns into $117,600; and $5,000 in Onex turns into $124,404 for a total of $609,172. It may not be $1,000,000, but it’s certainly close.
Just one ticking time bomb in your portfolio can set you back months – or years – when it comes to achieving your financial goals. There’s almost nothing worse than watching your hard-earned nest egg dwindle!
That’s why The Motley Fool Canada’s analyst team has put together this FREE investor brief, including the names and tickers of 3 TSX stocks they believe are set to LOSE you money.
Stock #1 is a household name – a one-time TSX blue chip that too many investors have left sitting idly in their accounts, hoping the company’s prospects will improve (especially after one more government bailout).
Still, our analysts rate this company a firm SELL.
Don’t miss out. Click here to see all three names right now.
Fool contributor Amy Legate-Wolfe owns shares of ENBRIDGE INC. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway and Enbridge. CN and Enbridge are recommendations of Stock Advisor Canada.