When it comes to investing, there are a few crucial factors that can make a significant difference in how efficiently and ultimately how much you grow your capital. And one of the easiest ways to increase the ultimate potential that your portfolio value can reach is to start investing as early as possible.
The longer the timeline you have to let your capital grow and compound, the more opportunity you have to grow your wealth to incredible levels.
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The power of compound interest and long-term investing
If you start investing with a $50,000 portfolio today, save $5,000 per year to add to your portfolio and grow it at compound annual growth rate (CAGR) of 10% for 40 years, your portfolio would be worth just shy of $4.5 million on just $250,000 in savings.
However, if you started with $50,000 today and saved $10,000 a year while still earning that same 10% CAGR but only invested the money for 20 years, you would have still saved a total of $250,000, but your portfolio would be worth just over $900,000. This illustrates exactly why giving yourself the longest timeline possible and beginning to invest as soon as possible is so crucial for Canadians.
Investing for the long term is also crucial, because giving yourself a long timeline helps to offset risk, since we can’t control or predict what will happen in the short term.
Not only does starting to invest as soon as possible give you a long timeline for growth, but if you do so now in this environment, you have the advantage of buying many stocks that are now undervalued after a significant selloff all year.
If you’re looking to start investing now, especially while many of the best Canadian stocks to own for the long haul are ultra-cheap, here is one of the best stocks to buy.
One of the top stocks to buy today and start investing
One of the best stocks to buy now, whether you’re about to start investing or already have an established portfolio, is Brookfield Infrastructure Partners (TSX: BIP.UN)(NYSE: BIP).
Brookfield is an excellent stock to buy, particularly in this environment, because it’s highly defensive, but it’s also a top long-term growth stock.
The company owns assets such as telecom towers, pipelines, toll roads, ports and other essential infrastructure assets all over the world. Many of these are extremely defensive, and much of Brookfield’s revenue is also indexed to inflation. This makes it one of the safest and most reliable stocks to buy today.
In addition to its resiliency, though, Brookfield is also consistently looking at how it can grow value for investors over the long haul. Therefore, it’s constantly acquiring new infrastructure assets which are either cheap or have significant organic growth potential.
In addition, it’s also consistently selling off more mature assets, which fetch higher valuations. This is why Brookfield is one of the best stocks to buy if you want to start investing.
Plus, in addition to the capital gains growth it offers over the long haul, Brookfield also aims to increase its distribution by 5-9% every single year.
So, whether you’re new and looking to start investing or have years of experience, Brookfield is one of the best long-term investments to consider for your portfolio.
