How I’d Invest $25,000 Today to Reach $1 Million

If I’m aiming for $1 million in the next few years, then these are the first and foremost dividend stocks I’m picking up for major growth.

| More on:
money cash dividends

Image source: Getty Images

It can be hard for many Canadians to see into the future these days. With the Bank of Canada raising interest rates to 4.5%, all we’re currently thinking about is how we’re going to afford our daily lives! However, given the way the market is performing, I’d say it could potentially be the best time to invest if you want to reach $1 million.

Why now?

The TSX continues to perform poorly compared to the most recent highs. Shares are down about 5.5% year to date, which is an improvement, sure. However, economists believe we could enter a recession in 2023 that could last halfway through the year. So again, it’s hard to invest at these levels believing there could be a further drop.

But here’s the thing. The stock market will recover. It always does. Look at the past few decades if you don’t believe me; it’s simply the nature of things. Still, if you want to reach $1 million, you’ll want solid companies that can get you there.

So if you’re sitting on $25,000 right now, look at this as a time to invest at a discount. You can pick up shares in companies you’ve been dying to own for years. And if it were me, these are the top I would choose.

Top stocks to reach $1 million

If you want solid growth, that’s one thing. But another consideration I would bring to the table is dividends. Those dividends will certainly help you reach $1 million sooner, as you can use them to reinvest in your shares. So what you want are solid growth stocks that offer dividends, and have for decades.

First up, I would pick up a company like goeasy (TSX:GSY). goeasy has seen record earnings results, including remarkably high loan originations in its most recent report. However, goeasy stock continues to trade down, 33% year to date! So you can lock in a substantial opportunity, with a 3.17% dividend yield as well. Meanwhile, shares are still up 1,649% in the last decade alone! That’s a compound annual growth rate (CAGR) of 33.1%, even after the recent drop.

I would also consider something a bit more stable as well, but still with a large growth opportunity. For this, I would look to BCE (TSX:BCE). As the country’s largest telecommunications stock, it offers a substantial growth opportunity with its 5G and fibre networks, but with a larger customer base to support growth. Shares are even with January 2022, but even still BCE provides a deal, and dividends are yielding 5.77%. Plus, shares are up 150% in the last decade for a CAGR of 9.6%.

Divide and conquer

So let’s look at the math here. Let’s say you’re going to divide your $25,000 between these two stocks. You’re then going to reinvest dividends year after year, in the hopes to eventually reach $1 million. Here’s how that would break down.


As you can see, those investments already bring in $1,118.08 in passive income per year. That’s certainly a lot to reinvest in these stocks. Now if we were to see the same amount of growth that we have in the last decade, and reinvest those dividends, it would take about 14 years to reach $1 million with dividends reinvested! All from investing just $25,000.

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. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Dividend Stocks

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 »

edit Sale sign, value, discount
Dividend Stocks

3 Cheap Dividend Stocks (Down Over 30%) to Buy in January 2023

Given their discounted stock prices and high yields, these three cheap dividend stocks could be attractive for income-seeking investors.

Read more »

A worker drinks out of a mug in an office.
Dividend Stocks

TFSA Investors: Earn Passive Income With 3 Blue-Chip Stocks

TFSA investors can worry less about a recession and earn passive income with three blue-chip stocks as core holdings.

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

Is Now the Right Time to Buy Consumer Discretionary Stocks?

Investors cannot paint consumer discretionary stocks with a wide brush. Each stock must be investigated individually. Here's why.

Read more »

Golden crown on a red velvet background
Dividend Stocks

2 Ultra-Stable Canadian Stocks Just Crowned as Dividend Aristocrats for 2023

Waste Connections (TSX:WCN) stock and another Dividend Aristocrat could help investors crush the markets in 2023.

Read more »

Golden crown on a red velvet background
Dividend Stocks

Create $200 in Passive Income Every Quarter From 1 Defensive Stock

Risk-averse investors can seek safety in a defensive stock and earn more in passive income in 2023 and beyond.

Read more »

Dividend Stocks

Slow and Steady: Buy this Railroad Stock Now to Win the Race

Investors looking for a solid and growing income should pick up shares in this railroad.

Read more »

retirees and finances
Dividend Stocks

RRSP Investors: Should You be Worried During a Recession?

RRSP savers might feel like gagging as they watch their investments fall, but stay strong! Especially with these TSX stocks.

Read more »