TFSA Investors: How to Turn $50K Into $2 Million!

TFSA investors can position themselves for huge tax-free gains with stocks like Lightspeed POS Inc. (TSX:LSPD)(NYSE:LSPD) in March.

| More on:
Glass piggy bank

Image source: Getty Images

The last decade has shown how opportune investments can net Canadians a fortune. Even better, the launch of the Tax-Free Savings Account (TFSA) in January 2009 affords investors the chance to gobble up tax-free capital gains. In 2021, the cumulative contribution amount in a TFSA rose to $75,500. Today, I want to discuss how TFSA investors could turn $50,000 into $2 million over the course of a decade. Let’s jump in.

How TFSA investors made their fortunes in the 2010s

Canadian investors came into the 2010s on the heels of the most devastating financial crisis since the Great Depression. The 2007-2008 financial crisis sparked the most radical response in history from central banks across the developed world. Investors who jumped on the low prices at the beginning of the 2010s were rewarded with one of the longest bull markets in modern history.

Air Canada (TSX:AC) was one of the stocks that suffered sharp losses in the wake of the financial crisis. Airliners were hit hard by the recession, and bankruptcy loomed even for Canada’s top airliner. Its stock fell below the $1 mark. However, Air Canada and its peers staged a comeback as the 2010s moved forward. Shares of the top domestic airliner rose 3,680% from January 1, 2010, to December 31, 2019. A $50,000 investment in the stock would be worth just over $1.8 million by the end of the decade.

That investment is possible right off the bat with the cumulative room in a 2021 TFSA. That should spur investors to look for top opportunities in this market.

This tech stock could make you rich this decade

In September 2020, I’d discussed why investors should get in on the e-commerce space. One of the top e-commerce stocks I’d suggested was Lightspeed POS (TSX:LSPD)(NYSE:LSPD). The stock debuted on the TSX in March 2019. Shares of Lightspeed have climbed over 450% from the prior year as of early afternoon trading on March 16.

The company released its third-quarter fiscal 2021 results on February 4. Revenues rose to $139 million in the year-to-date period — up from $84.3 million in Q3 FY2020. Meanwhile, gross profit jumped to $83.3 million compared to $57.2 million. This is a great stock for TFSA investors to target in the middle of March. Its shares dipped below the $70 mark during the recent bout of tech stock turbulence. However, it is not too late to snatch it up today.

Two more super stocks to stash in your TFSA

goeasy (TSX:GSY) is another stock that is perfect for TFSA investors right now. Its shares have climbed nearly 220% in the year-over-year period. Meanwhile, the stock is up 37% in 2021 so far. goeasy’s loan portfolio rose 12% from the prior year to $1.25 billion in Q4 2020. Adjusted annual net income increased 47% to $118 million. Better yet, goeasy qualifies as a dividend aristocrat and offers a quarterly distribution of $0.66 per share. That represents a 2% yield.

TFSA investors should also target Nuvei. This tech stock debuted on the TSX in September 2020. Its shares have already climbed 90% since its launch. The stock is up 19% so far in 2021. Nuvei provides payment technology solutions to merchants and partners around the world. This space is geared up for big growth in the years ahead.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of Lightspeed POS Inc.

More on Investing

Question marks in a pile
Tech Stocks

Should Canadians Be Worried About the Snapchat Stock Plunge?

Social media stocks lost US$180 billion in value on Tuesday, as shares of Snapchat (NYSE:SNAP) stock dropped by 41%, below…

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Stocks for Beginners

Got $3,000? 3 Top TSX Stocks to Buy Today

Looking for growth along with dividends? Here are three top TSX stocks.

Read more »

sad concerned deep in thought
Stocks for Beginners

Inflation Have You Scared? Why You Should Invest Anyway

Inflation can be scary, but don't let it get in the way of your long-term goals. By figuring out what…

Read more »

edit Person using calculator next to charts and graphs
Stocks for Beginners

2 Cheap Canadian Stocks (Under $5) to Buy Today

Despite the recent market weakness, long-term investors can buy these two cheap Canadian stocks today to get solid returns in…

Read more »

Stocks for Beginners

TSX Still Down 9%: Why New Investors Should Buy Now!

New investors should pounce on the opportunity to buy long-term holds like these blue-chip companies while they're still down by…

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Stocks to Hold for a Reliable Source of Passive Income

Are you looking for a way to produce a reliable source of passive income? Hold these three stocks!

Read more »

Wealth management companies could be good long-term investments.
Bank Stocks

With a 6 Percent Yield, Time to Buy Cheap Shares of IGM Financial?

The wealth management company had record earnings, but the shares are trading at a one-year low.

Read more »

worry concern
Dividend Stocks

3 Stocks to Buy if You Are Worried About a Recession

There are a lot of safe investments that can help your portfolio remain afloat during a recession and the market…

Read more »