Millennial Millionaires: Get Rich From the TSX Today!

The TSX today has a lot of opportunities for investors to make millions, especially millennials who have time on their side.

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If you’re a millennial, the one advantage you have above most investors is time. Even Warren Buffett doesn’t have potentially 70 years ahead of him to invest. But you could if you’re even 20 years old! So if you want to get rich from the TSX today, you just need to follow these steps.

Save as fast as you can

If you’re just starting into investing and saving, you want $1,000 you can put aside as fast as you can. This might mean taking the total off your first pay cheque or taking a smaller percentage from each pay cheque. Whatever it is, put that money aside as fast as you can.

Why? This has a number of benefits. It first shows you saving is possible. By giving yourself an attainable goal of just $1,000 instead of, say, $20,000, you can make those necessary cuts to get to that number quickly. You’ll then tell yourself you can continue making those cuts, and save even more down line. Before you know it, you may have $12,000 saved up by putting aside $1,000 each month! This can also be used to create an emergency fund of about three months worth of necessities.

Pay off debt

Again, as fast as you can. Student loans, credit cards, all of this has interest. The sooner you pay off all debt (other than your house), the richer you’ll be. That’s especially true of credit cards. As Warren Buffet has said, this is his first step to investing. Pay off your credit card debt that can take on interest of around 20%!

A great first step is to list your debts in order from lowest to highest, not taking into account the interest rate. You then pay minimum balances to everything but the smallest, which you pay down aggressively. Then when it’s gone, move to the next and the next until everything is paid off!

Once you’ve come this far, start in on that mortgage. This is the main contributor to blocking financial freedom. Once your debt is down, if you’re able to pay off your home early this means all your cash here on out can be used to make more money. And that’s the next step.

Invest in the TSX today

Here’s where the real wealth begins. You’ve now paid off your debt. You don’t even have a mortgage. But even before the mortgage is paid down, getting into investing early and often is the best thing you can do for yourself and your family.

The first step is to make your retirement goals. A great place to start is by putting 15% of each pay cheque towards a retirement investment. You can use the TSX today to find some stock options, or use an exchange-traded fund (ETF). A great option is the iShares SP/TSX 60 Index Fund (TSX:XIU), a collection of the 60 best-performing companies on the TSX. You then put this cash into your Registered Retirement Savings Plan (RRSP) so when retirement hits, you can take it out tax free!

Now create a similar fund for your child’s (or your) education. You can use the iShares again if you like, or another equity, mutual fund, or anything else toward your child’s future. This will not only  help your children when it comes to their education, but will also relieve the financial burden of having to worry about paying down debt in the future. You can do this in a Registered Education Savings Plan (RESP), where the government will add 20% to the first $2,500 each year!

But you also have a Tax-Free Savings Account (TFSA) at your disposal. This is a great option to help build your investments as you pay down debt, as you can take out this cash any time tax free. You can use it to build up your emergency fund, your mortgage payments, or simply as an addition to retirement.

Bottom line

If you made $50,000 and invested in the TSX today with an ETF like iShares, a 20-year-old putting away $7,500 per year could have $2.3 million by the time they retire! That’s a retirement fund anyone would be happy with.

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 has no position in any of the stocks mentioned.

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