The Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) debate was settled a long time ago, and judging by the pattern of savings and investing for most Canadians, we can confidently say that the TFSA is the more popular choice. The low contribution room is still a pain point for many investors, but there is a lot you can achieve (with the right investment choices) by sticking to the contribution limits.
Let’s say you have a fully stocked TFSA and have accumulated $88,000 in savings. If you choose the right stocks and their growth is similar to what they have offered in the last decade, there is a realistic probability that you might be able to grow your retirement savings to a quarter-of-a-million-dollar nest egg.
A professional services and consulting company
WSP Global (TSX: WSP) is engineering services and consultancy firm that has been around since 1885. It has come a long way from its humble beginnings and helped numerous businesses, governments, and other entities solve complex engineering problems around the globe. It caters to a wide variety of industries and sectors.
WSP Global’s geographical reach, the diversity of its solutions, and its business model make it a relatively resilient investment. It has also been a rewarding stock for its investors for the last several years, rising by about 635% over the previous 10 years. That’s more than 300% potential growth in five years (in a healthy market).
A tech stock
When it comes to growth and capital-appreciation potential, the tech stocks on the TSX are in a class of their own (at least some of them). Descartes Systems Group (TSX: DSG) is one such example and combines powerful growth potential with consistency. It’s one of the few tech stocks that experienced a modest/mild correction in the last couple of years, and it’s already close to a complete recovery.
The company is an important piece of the global logistics puzzle. It offers a variety of logistics and supply chain solutions to businesses worldwide and gives them the power to leverage their data for more intelligent business decisions.
As for the growth potential, the stock rose by about 1,000% in the last 10 years. That’s equivalent to about 100% growth yearly (if we average it out) and roughly 500% in five years when the market is bullish.
A transportation company
TFI International (TSX: TFII) also gives you exposure to transportation and logistics, albeit in a different way. It’s one of North America’s most prominent trucking companies and has developed a massive network of on-ground facilities and operating companies. The company has experienced incredible organic growth in the last decade, and the stock has followed.
TFII International has experienced exceptional growth in the post-pandemic market. Considering its fair valuation and the fact that a correction hasn’t eroded it yet, we can assume that it’s sustainable enough. But it was a robust grower even before the pandemic.
The total price returns in the last decade have been 638%, and if the stock maintains this pace in the next decade, it’s reasonable to expect about 300% growth in the last decade.
Foolish takeaway
Two out of the three stocks may offer three-fold growth in the future, while the other one might grow by five-fold. But even if it underperforms and you see three-fold growth across the board, you can still grow your $88,000 TFSA savings into a $264,000 nest egg in just five years.
