How to Turn $10,000 Into $200,000 for Retirement

Buy top dividend stocks and use the distributions to acquire new shares.

| More on:
Piggy bank next to a financial report

Image source: Getty Images.

A market correction can be a scary time for investors, but pullbacks in high-quality dividend stocks can provide good opportunities to add to existing positions or start a new retirement portfolio.

One popular investing strategy involves buying top dividend stocks and using the distributions to acquire new shares. The process can be set up to happen automatically if the company offers a dividend-reinvestment plan (DRIP), or investors can simply collect the dividends and wait for market dips to buy new shares.


Enbridge (TSX:ENB) has raised its dividend in each of the past 27 years. The stock is up 12% in 2022 as of the time of writing and currently offers a 6.2% dividend yield. Enbridge is popular with retirees who simply prefer to pocket the dividends as part of their retirement income, but the stock has also generated attractive long-term total returns.

Enbridge isn’t an oil or gas producer. The company simply transports the commodities from the production sites to destinations that include refineries, storage sites, utilities, or export facilities. Enbridge charges a fee for providing the services, so it isn’t directly impacted by volatility in the price of oil or natural gas. As long as the pipelines are full, it doesn’t really matter which way energy prices are headed.

Enbridge also operates natural gas utilities and has a growing renewable energy group that includes solar, wind, and geothermal assets. The company recently purchased a wind and solar development company in the United States and just announced the completion of an offshore wind farm in France.

In addition, Enbridge is expanding its export investments in both oil and liquified natural gas and is exploring opportunities in hydrogen and carbon sequestration. These new segments hold strong growth potential.

The capital program currently stands at $17 billion, and Enbridge has the balance sheet strength to make strategic acquisitions to drive additional revenue and profits expansion.


Long-term investors have done well with the stock. A $10,000 investment in Enbridge 25 years ago would have purchased 1,333.33 shares at the split-adjusted price of about $7.50 per share. Enbridge currently trades for close to $56 per share, so the initial stock investment would be worth about $74,666.00 today.

In addition to the capital gains, investors would have collected about $33.50 per share in dividends over that timeframe, or about $44,667.00, thus turning the initial investment total gain into about $119,333.00.

If the dividends had been automatically reinvested rather than pocketed, the initial $10,000 would have compounded to about $200,000 right now.

The bottom line on top dividend stocks to buy for a retirement fund

There is no guarantee that Enbridge will deliver the same returns in the next 25 years, and the stock isn’t immune to market pullbacks, but it still deserves to be a core holding in a diversified retirement portfolio.

The TSX is home to many top dividend stocks that have delivered great long-term returns. The strategy of buying reliable dividend stocks and using the distributions to acquire new shares is a proven one for building long-term wealth.

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.

The Motley Fool recommends Enbridge. The Motley Fool has a disclosure policy. Fool contributor Andrew Walker owns shares of Enbridge.

More on Investing

Airport and plane

Air Canada – Its Moment Has Come

Air Canada stock got beaten down last year, but today, its prospects are better.

Read more »

Man data analyze

Here’s the Next TSX Stock I’m Going to Buy

BRP Inc. (TSX:DOO) is a TSX stock I’m looking to snatch up, as the Powersports industry rebounds after the COVID-19…

Read more »

Dividend Stocks

TFSA: How to Invest $88,000 to Get $5,450/Year in Passive Income

Top TSX dividend stocks such as Enbridge can be held in your TFSA to benefit from steady payouts and capital…

Read more »

Arrow descending on a graph

3 Stocks to Add to Your Portfolio in a Market Pullback

The stock market is in the green, but the upcoming U.S. Fed meeting raises fears of a pullback. Use that…

Read more »

Tech Stocks

Your Future Self Will Thank You for Buying Lightspeed Stock in 2023

Here’s why you may want to add LSPD stock to your portfolio in 2023 to hold it for the long…

Read more »

grow money, wealth build
Bank Stocks

TFSA Investors: A Big Bank Stock That Pays Almost 6% in Dividend Income

A Big Bank stock is an ideal core holding in a TFSA, not only for its financial stability but also…

Read more »

a person watches a downward arrow crash through the floor
Tech Stocks

Don’t Wait for a Market Crash: These 2 Top Stocks Are on Sale

Waiting for a market crash can take away the opportunity to buy early in the market rally while growth stocks…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Tech Stocks

Have $500? 2 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

Got $500 to invest? Consider buying these stocks that are too cheap to ignore.

Read more »