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One Millionaire-Making Strategy that Could Make You Rich

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A few years ago, I wrote about finding not only finding the right stock, but also finding the right strategy that could bring you to millionaire status. While I stand by my article of using that strategy to find stocks that can bring you to millionaire returns, today is a unique situation.

Pandemic fallout

We are still in a pandemic. The pandemic has ravaged many industries, including the airline industry. Now if you’re a retiree needing cash imminently, this strategy might not be for you. But if you have years and years to hold onto a stock,  you can certainly combine my millionaire strategy with stocks that are set to soar once the pandemic and its fallout have fallen to the wayside.

While I wrote before about the e-commerce industry — and again stand by that — this industry has exploded during the pandemic. E-commerce stocks trade at prices that outweigh future earnings. Instead, why not look at other industries that will definitely make a comeback, albeit in a few years?

Take the airline industry. When the pandemic passes and travel resumes, Canadian airline companies will soar once again. The top contender? Air Canada (TSX:AC). Air Canada stock has taken a beating, falling by half this year. But when it climbs back up, you could reach that millionaire status before you know it.

Air Canada stock

While there are a number of reasons that shares in Air Canada stock climbed during the last few years, there’s really only one reason why it’s down: the pandemic. The reasons for its climb come from reinvestment into its product. The company purchased a fleet of fuel-efficient planes meant to bring in more cash, and spend less on gas. It bought back Aeroplan, and also acquired Air Transat to offer a low cost option.

The company has also reinvigorated its flight network and cut back on spending in other areas. This has brought in an enormous amount of cash for a company that will take over 60% of the market share with Air Transat on board. Canadians will be able to go to Air Canada as a one-stop shop to fly business, pleasure, cheap, expensive, whatever they need.

In fact, with government bailouts a likelihood, airlines could reach pre-pandemic levels again by 2023. So if that happens, we could predict shares could be back at the $50 mark by 2023, if not earlier. Especially with any news of a bailout.

If that’s the case, shares could double in two-years time. So if we look at performance from the last decade as a marker, compound annual growth rates (CAGR) for Air Canada stock were at 157%! Should that continue afterwards, it wouldn’t take much to reach a million dollars.

In fact, if you were to invest $70,000 from your Tax-Free Savings Account (TFSA) towards Air Canada stock, it could be worth $175,000 in just two years if shares get back to $50 once again. And that’s only the beginning.

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.

Fool contributor Amy Legate-Wolfe owns shares of AIR CANADA.

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