Sitting on $10K? Invest in This TSX Stock for a Chance at $160K in 10 Years

Stocks are down, but don’t count them out. TFSA investors should continue to invest in strong companies that should recover strong.

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There are many Canadians across the country continuing to just sit on cash. They’ve gotten in the habit of putting cash aside and have slowly but surely adjusted to the new cost of living. There are new budgets and new cutbacks. Everyone has managed to tighten their purse strings.

But does that mean your investments should suffer in the meantime? The answer is, of course, no. In fact, now is a great time to consider investing — especially if you’ve recently gone through your budget.

If you haven’t, look back at the last three months to see how your spending has changed. Create a budget based on this and cut out what you know you don’t need. Then see what you can consistently put aside towards your investments month after month.

Some of you may already have that

There are Canadians, however, who may already be doing this ahead of a recession. Canadians who already have a ton of cash saved and are doing nothing with it. This is a major mistake because you’re now not even growing your cash with inflation! It’s just … sitting there.

That’s why a Tax-Free Savings Account (TFSA) is a great option to store and grow your savings. You can put your cash aside, keep it safe, invest it, but also know that you can take it out at any time tax free.

If you decide to take this option while still contributing to your TFSA year after year, you can make an immense amount of cash over the next few years. And if you do take this option, this is the TSX stock I’d choose.

Invest in Brookfield Renewable

Brookfield Renewable Partners (TSX:BEP.UN) is a strong option for investors looking towards the future. In this case, it’s the future of energy production. Brookfield stock has investments all over the world in every type of renewable energy project. Because of this, you can see a diverse set of income come in. This could lead the company to be the biggest renewable energy producer in the world when we make the shift completely away from oil and gas.

But there’s even more of a near-term reason to invest. Brookfield stock is down 21% in the last year, though it’s up about 12% year to date. You can therefore gain some growth while still getting a solid dividend yield of 4.62% as of writing from Brookfield stock. And if you take this option, here’s how that $10,000 could look over the next few years.

If we look at the company’s historical growth, we’ve seen a compound annual growth rate (CAGR) in share price of 10.31%, with dividends at 9.64% in the last 10 years. So, if you continue to add $6,000 to your TFSA each year with the original $10,000, here’s what another decade could get you.

YearShares OwnedAnnual Dividend Per ShareAnnual DividendAfter DRIP ValueAnnual ContributionYear End Shares OwnedYear End Stock PriceNew Balance

After just 10 years, you could have a portfolio worth $160,890 — all from a total investment of $70,000! So, use your TFSA to your advantage and get in on these strong companies while they’re down and soon to be on their way up.

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 positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

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