TFSA Investors: 3 Stocks to Build a Massive Nest Egg in 1 Decade

With the right stocks, you can get around the restrictions associated with capital and time and grow your TFSA savings to an impressive size.

| More on:
A golden egg in a nest

Image source: Getty Images.

Time, stocks/assets, and capital are three important ingredients of retirement planning. The general rule of thumb for time and capital is that the less you have of one thing, the more you would need of the other.

Your investment choices can also make a significant difference. So, if you are in your 50s and just a decade away from your retirement or simply want to achieve reliable and powerful growth in a decade, you should keep an eye on three stocks.

A heavy equipment company

When buying stocks for your retirement nest egg, the growth potential should be carefully balanced with stability. A company like Toromont Industries (TSX:TIH) is not a great pick just because of the growth potential it offers to its investors but also because of its business model and position in the industry.

Toromont Industries is one of the largest heavy-equipment dealers in the world, though that’s not the full width of its business operations. It has a number of different businesses under its banner, mostly related to heavy equipment and services, but it also has a mature refrigeration business.

As for growth, the stock rose about 371% in the last decade, and if you calculate the returns, including dividends, the number was significantly higher (460%). Assuming the stock offers similar returns in the next decade, you can grow your $50,000 capital to $230,000.

A tech stock

The tech sector has no shortage of powerful growth stocks, and Descartes Systems Group (TSX:DSG) is one of the prime choices.

The company has a logistics platform with a wide range of solutions associated with supply chain, logistics, and consumer management. In today’s data-driven world, platforms like Descartes Systems that offer supply chain/logistics visibility and make informed decisions in real time are highly coveted.

The stock has been going up almost consistently since 2008; in the last decade, it grew about 983%. That’s almost 100% a year, but even if it underperforms — i.e., grows around 600% in the next decade — you can turn your $50,000 in savings into a sizable $300,000 nest egg. Assuming it repeats history, your returns would be significantly higher (almost half-a-million dollars).

The “answer” company

Thomson Reuters (TSX:TRI) markets itself as a “trusted provider of answers,” which may make it sound like a simple consultancy firm, but it’s much more than that.

It offers specific technological solutions and services to legal, news, tax, and risk & fraud industries. The proprietary solutions are part of the company’s strengths, and services to these industries are one of the primary factors responsible for its organic growth.

The stock is also a well-established Aristocrat currently offering a 1.6% yield. It may not look like much, but its dividends made up a significant portion of its returns in the last 10 years. The stock went up 390%, but if we add the dividends into the mix, the overall returns were about 610%. If it performs similarly in the next decade, you can turn $50,000 of capital into $300,000.

Foolish takeaway

The three stocks, assuming their performance in the next decade matches or exceeds the performance in the past decade, can turn your $150,000 savings into a massive nest egg of about $830,000. All three are among the top stocks in their industries, making them good picks, even for investors with modest risk tolerance.  

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy.

More on Investing

Piggy bank next to a financial report

TFSA: 2 Canadian Dividend Stocks for Your $6,500 Room Contribution

Alimentation Couche-Tard (TSX:ATD) and Scotiabank (TSX:BNS) are great value picks for new TFSA investors looking to put money to work.

Read more »

value for money

3 Remarkably Cheap TSX Stocks to Buy Right Now

Looking for some quality bargains on the TSX today? Check out these three stocks for value, growth, and income.

Read more »

money cash dividends

Passive Income: How to Make $600 Per Month Tax Free

Canadians on the hunt for passive income in a choppy market can look to generate $600/month with True North Commercial…

Read more »

Dividend Stocks

Better Buy for TFSA Passive Income: Telus Stock or TD Bank?

Telus stock and TD stock look cheap today. Is one really oversold?

Read more »

funds, money, nest egg
Dividend Stocks

Income Stocks: A Once-in-a-Decade Chance to Get Rich

As a part of your diversified investment portfolio, solid dividend stocks on sale can help you get rich with growing…

Read more »

Hourglass projecting a dollar sign as shadow
Dividend Stocks

2 Superb TSX Stocks to Buy for Passive Income

All dividend stocks can help you start a passive-income stream, but relatively few offer a healthy combination of yield and…

Read more »

A golden egg in a nest
Dividend Stocks

TFSA Investors: 2 Growth Stocks to Build an Adequate Nest Egg

Two TSX growth stocks are ideal holdings for TFSA investors building a nest egg or retirement wealth.

Read more »

financial freedom sign
Dividend Stocks

How to Easily Make $1 Million in 20 Years

There's trying to time the market, and then there's the easy way of investing if you want to make $1…

Read more »