Retiring early is not just wishful thinking, at least not for investors with healthy risk tolerance and financial discipline. If you can create the right investment plan and choose the right stocks to invest in, it’s certainly possible to retire a few years or even a couple of decades earlier than the usual age. Though the latter would require aggressive savings and drastic lifestyle changes.
And if you are willing to do that, you should start looking into the stocks capable of helping you achieve your early retirement goal.
A banking stock
While bank stocks are coveted more for their reliable dividends and dividend growth streaks, National Bank of Canada (TSX: NA) is the perfect “growth” pick. It has been one of the best growth stocks in the banking sector in the last 10 years. And it also offers a healthy 4.3% yield in accordance with the norm of the sector.
Even though it’s mostly a regional bank, it has seen decent organic growth in the last few years. The financials are strong, and with a focus on digital banking, it seems well positioned for future growth as well.
But even if the stock sticks to its 10-year returns of 255% (including dividends), it can do wonders for your early retirement, assuming you can hold it for at least a couple of decades. It’s currently available at a discounted price and valuation.
An infrastructure stock
Brookfield Infrastructure Partners (TSX: BIP.UN)(NYSE: BIP) is another relatively conservative and safe bet that offers reliable long-term growth potential, which may help you retire early. The company has a globally diversified portfolio of infrastructure assets, including transportation, utilities, and data-related assets. This “spread” is not just safe and evergreen but is expected to remain relevant for decades.
The stock has performed quite well for the last 13 years. It has mostly gone up and has returned roughly 570% to its investors since September 2009. If it maintains that pace, the stock may offer somewhere between four- and five-fold growth in the next decade as well. And if you can grow your nest egg by this scale for two or three decades, you can easily hit your funding goal for early retirement.
A real estate stock
StorageVault Canada (TSX: SVI) might be a better fit if you are looking for something more aggressive. It’s a niche real estate company focusing on just one relatively unique asset class — i.e., storage spaces. And since storage spaces have proven to be a financially healthy, the company has seen tremendous growth over the years.
It’s important to note that the company’s growth has been more than just organic. It has made several acquisitions and currently operates through eight different brands.
The stock’s growth has reflected, even outpaced the growth of the underlying company. It has risen 128% in the last five years alone, which is incredibly modest compared to its last decade’s price appreciation of about 2,400%. But even if we take the five-year growth as the benchmark, the stock might be capable of doubling your capital every four to five years.
Foolish takeaway
These stocks are not just for investors looking to retire early. They deserve a place in the portfolios of most Canadian investors looking for healthy and relatively reliable growth. If that’s part of your retirement planning, then it might be a good idea to add these stocks to your portfolio.
