If there’s one thing that millennials have, it’s time. Millennials don’t have much else, of course — especially during this pandemic. Millennials were born in a recession, entered the work force during a recession, and are now trying to juggle careers and family during an economic downturn and pandemic. So, it doesn’t seem all that likely that there could be millennial millionaires.
But again, millennials have time. That means you absolutely could become a millennial millionaire, if you can be patient. That’s really all it takes. Because millennials don’t have all that much disposable income, it does mean they are great savers. Most have money put away, but not everyone is investing. That should be the first thing you should change. It doesn’t have to be a lot, but by just putting your cash in a Tax-Free Savings Account (TFSA) is a great start.
TFSA, check. Next?
The next step should be to start actually investing. That means creating a watch list of stocks that you can buy on a dip. It doesn’t have to be risky investments, but those that should continue growing for decades to come. It would also be great if you had some stocks with dividends. This is free money you can reinvest and grow your bottom line.
After that, decide what you can afford to put aside. I always recommend putting 10% of each paycheque aside. You can then create an investment egg that you can use to invest when your watch list drops. This is the easiest, cheapest way to become a millennial millionaire.
Millennial millionaire maker
If you want to become a millennial millionaire sooner as opposed to later, a great option to consider today are healthcare stocks. These stocks have seen a huge boost with reinvestment into the healthcare community during the pandemic. Health care is changing, and there are a lot of companies taking advantage of that change. However, some of those are risky choices that won’t keep growing by leaps and bounds for long. Instead, it might be prudent to invest in the tangible side of health care.
For that I would recommend a stock like Northwest Healthcare Properties REIT (TSX:NWH.UN). The company owns healthcare properties around the world, with a diverse range from hospitals to office buildings. While other real estate investment trusts (REITs) have fallen, Northwest continues to grow. The company’s occupancy rate remains stable at 97.2%, with revenue growing 10.8% year over year for the last three quarters in a row!
Do your research
I’m going to provide an example of just how much Northwest could grow over the next few decades to get to that millennial millionaire status. It’s an example based on what historical information we have available. What is available is that Northwest shares have grown at a compound annual growth rate (CAGR) of 23.2% in the last five years. Its dividends have grown by 29% CAGR during that time.
So, with that information, let’s say you were able to put the TFSA contribution limit of $6,000 aside each year. Then you were able to start your investment during another market crash, potentially coming in March. Let’s say the share price fell to what it was in March 2020.
If the same growth continues, it would take 17 years for your TFSA portfolio to reach $1.057 million and make you a millennial millionaire! If you’re 30, that means you could potentially retire at 50 with those numbers! All it takes is some time and patience. Now, of course, this is an example, and it’s likely this growth won’t be as strong two decades from now. But investing in a stock like Northwest does give you a solid chance of strong returns, especially if you continue to put aside cash into your TFSA.