Generational wealth: it’s what we really want, isn’t it? To have a system in place to become one of those families that has decades and, indeed, generations of wealth behind it? Well, in today’s world, that’s pretty simple.
Investing has never been easier — quite literally. There are no more phone calls or in-person meetings and no hidden business meetings. Your finances are at your fingertips — literally. The internet is really a miraculous place, isn’t it?
Because of this, investing in strong companies is one of the best ways to create generational wealth. However, while there are some stocks out there that may become that stock you wish you’d bought back when, there are other, more solid options — stocks that are simply designed for generational wealth.
Canadian Utilities
One of the best ways to create generational wealth is to invest in a stock that’s been around for generations. Furthermore, consider one that has dividends, as you can use those to automatically reinvest in the stock again and again.
While Canadian Utilities (TSX: CU) isn’t the oldest stock out there, it has the longest dividend-growth status of 50 years. That makes it the only Dividend King on the TSX today. That is why it’s perfect for generational wealth.
As you can see in the chart below, an investment of $10,000 in Canadian Utilities 30 years ago would have made incredible wealth by now — even without reinvesting dividends.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | TOTAL PORTFOLIO |
| CU – 1993 | $5.70 | 1,754 | $1.42 | $2,490.68 | Quarterly | $10,000 |
| CU – 2023 | $39 | 1,754 | $1.79 | $3,139.66 | Quarterly | $68,406 |
After 30 years, you would have tens of thousands in dividend income alone each year and a portfolio from just your shares of $68,406!
Brookfield Renewable
Brookfield Renewable Partners (TSX: BEP.UN) doesn’t have the history in terms of share performance that Canadian Utilities does. But that doesn’t mean it’s not made for generational wealth. In fact, it’s quite the opposite. It’s an offshoot of Brookfield Corporation, which has been around since 1899.
In that time, it’s expanded to a diversified range of real estate assets. This includes renewable energy, with Brookfield stock being in this area for decades. And there is still a ton of room to grow in this field.
So, let’s see what a $10,000 investment in Brookfield stock would have made by now, but over the 17 years the company paid its dividend. Again, this is without reinvesting dividends.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | TOTAL PORTFOLIO |
| BEP.UN – 2006 | $9.60 | 1,042 | $0.66 | $687.72 | Monthly | $10,000 |
| BEP.UN – 2023 | $41.50 | 1,042 | $1.83 | $1,906.86 | Quarterly | $43,243 |
Again, you’ve made an immense amount of wealth in just 17 years with a portfolio at $43,243. Further, you would have made about $20,000 in passive income over the years!
Royal Bank
Finally, Canadian banks are some of the best buys to get you through hard times, though it may not feel like it right now. However, Royal Bank of Canada (TSX: RY) is the best option in my books, as it continues to be the most lucrative.
The company continues to focus on wealth and commercial management as well as its capital markets for huge gains. It has provisions for loan losses and has shown to rebound quickly after recessions. So, this stock is perfect if you’re looking to create defensive generational wealth.
Let’s look at a $10,000 investment for the past 30 years without reinvesting dividends.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (ANNUAL) | TOTAL PAYOUT (ANNUAL) | FREQUENCY | TOTAL PORTFOLIO |
| RY – 1993 | $6.75 | 1,481 | $1.16 | $1,717.96 | Quarterly | $10,000 |
| RY – 2023 | $132 | 1,481 | $5.28 | $7,819.68 | Quarterly | $195,492 |
Of the batch, clearly Royal Bank stock looks like it’s the best, as we’ve entered triple digits. What’s more, you could have an insane amount in dividends as well. Just remember, there is likely to be more volatility during downturns.
But no matter what you choose, these three stocks are definitely built for wealth that will last generations.
