The Motley Fool

Looking for These 2 Traits Will Make You a Millionaire

Image source: Getty Images

When investors enter the market, it is very common to wonder how long it will take to become a millionaire. Unfortunately, that’s a tough question to answer. There are many variables that can affect how soon you reach a seven-figure net worth, including how much you can invest, how quickly those investments increase in value, and whether you can keep the money invested for long enough.

Fortunately, choosing the right companies can go a long way in making you a millionaire. There’s no secret recipe in finding a millionaire-making stock. However, companies that have turned investors into millionaires in the past seem to share common traits. In this article, I will discuss two millionaire-making traits you should look for.

The company will have a passionate and involved founder

Studies have shown that founder-led companies tend to outperform their peers led by non-founders. What’s even better is if those founders hold large ownership positions in the companies they lead. This shows to investors that these individuals hold a lot of confidence in the company’s direction and are willing to bet their financial success on the success of the company.

One excellent example of this is Tesla. The company is led by co-founder, Elon Musk, who holds a staggering 17.8% of the company. It is no secret that Tesla has performed exceptionally well over the past two years, which is likely a big reason for its recent gains. Another example that Canadian investors should be familiar with is Shopify. Founder-CEO Tobi Lütke holds a 6.2% ownership stake in his company. Since its Initial Public Offering (IPO) in 2015, the stock has gained as much as 5,000%, creating many new millionaires over that period.

The company will have a top-notch dividend history

Dividend investors may be left wondering, “Is there any chance for me to become a millionaire?” Fear not, because the answer is yes. Although it is much more difficult to do so given the fact that dividend stocks tend to appreciate much slower than growth stocks. However, the right dividend company can still make you very rich.

Take Canadian National Railway (TSX:CNR)(NYSE:CNI) for example. The stock has been a steady gainer since coming public in 1996. If you had made a one-time investment of $10,000 at its IPO in November 1996, your position would be worth $509,000 today. If you invested another $10,000 exactly one year later, that tranche would be worth more than $340,000. This shows how quickly positions can snowball over time.

Canadian National is one of the top dividend companies in Canada, having raised its dividend every year for a quarter of a century. In addition, company management has been able to do so while maintaining a dividend payout ratio of 46%. This means the company has a lot more room to keep growing its distributions in the future.

These two qualities in a dividend-paying company show excellent management and should give investors confidence in this millionaire-making stock.

Interested in a third potential millionaire-making stock? Take a look at this free stock pick...

Motley Fool Canada Makes 5G Buy Alert

5G is one of the greatest arrivals in technology since the birth of the internet. We could see plenty of new wealth-building opportunities in 2021 that would potentially dwarf any that came before them.

5G has the potential to radically change our lives and society as we know it, but if you’re an investor, the implications are even greater — and potentially much more lucrative.

To learn more about it and its revolutionary potential to change the industry — and potentially your bank account — click on the link below to get the full scoop.

Learn More Today!

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 Jed Lloren owns shares of Shopify and Tesla. David Gardner owns shares of Canadian National Railway and Tesla. Tom Gardner owns shares of Shopify and Tesla. The Motley Fool owns shares of and recommends Canadian National Railway, Shopify, Shopify, and Tesla. The Motley Fool recommends Canadian National Railway.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.