CERB Just Ended: 2 Stocks to Buy Now

CERB was a lifeline for millions of Canadians, but the benefits are no longer available. Replace the income with stocks like Enbridge (TSX:ENB).

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CERB was a lifeline for millions of Canadians. It provided $500 weekly income to those affected most by the COVID-19 pandemic. In total, more than one-quarter of the country received cheques.

On October 3, the temporary program ended. Many recipients will transition to the revamped Employment Insurance program, but estimates show that 500,000 will be kicked off the books. Over time, everyone will need to figure out how to survive without these emergency measures.

CERB is ending, but the payments don’t have to stop. There are things you can do to keep the income rolling.

Buy dividend stocks

Dividend stocks are the easiest and most direct way to replace your CERB earnings. That’s because these companies pay you to own the stock.

Enbridge (TSX:ENB)(NYSE:ENB) is a popular example. Shares have fallen this year, as oil prices remain weak. That’s pushed the dividend yield up to 8%. You can earn 8% interest simply by owning the stock!

This fire sale may not last long.

“The market is already mistaken to price Enbridge as if oil prices were going to stay weak forever from the pandemic,” reported Morningstar. “If you’re an investor with a mindset that goes beyond the pandemic you might find that that threat isn’t as bad as it seems.”

The math is simple. By investing $10,000, you’ll generate $800 in annual income. To replace CERB’s $2,000 monthly cheques, you’ll need to pony up $300,000. That’s a princely sum, but remember that this is income for life.

Don’t have $300,000? No worries. You can go much faster by investing in tech stocks like the ones below.

This is better than CERB

If you want a secure financial future, growth stocks are your best bet. There’s simply no better way to grow your money quickly.

Just look at Shopify (TSX:SHOP)(NYSE:SHOP). Shares have risen 30 times in value in just five years. You could have $300,000 today from an investment of just $10,000. That’s a lot more attractive than CERB.

What’s the secret? Shopify isn’t just any tech stock — it’s a software platform. This is a little technical, but it’s worth understanding.

Software businesses have high margins and fantastic revenue growth. That’s because it doesn’t cost anything to deploy software to another customer. You just send a download link. Plus, these products are often sold on a subscription basis, so you earn revenues again and again by selling the same product.

The second magic ingredient is a platform approach. Similar to Microsoft Windows, Shopify simply built the underlying infrastructure, empowering outside developers to build the rest. When done right, platform businesses command a massive share of the market. It’s winner takes all. This is why Shopify stock has exploded.

Don’t just replace your CERB income. Buy something even better. That’s what you get with software platform stocks like Shopify.

To be sure, Shopify’s biggest days of growth are likely behind it. The stock is still a compelling buy, but if you want to make 30 times your original investment, you’ll need to find the next Shopify. That can be challenging, but the rewards will be lucrative.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Enbridge, Microsoft, Shopify, and Shopify and recommends the following options: long January 2021 $85 calls on Microsoft and short January 2021 $115 calls on Microsoft. Fool contributor Ryan Vanzo has no position in any stocks mentioned.

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