TFSA: How You Could Turn $40,000 Into $400,000 in 10 Years

Canadian investors should achieve huge growth in their TFSA with the help of top growth stocks like Air Canada (TSX:AC) and others.

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The Tax-Free Savings Account (TFSA) launched in January 2009. When it was first introduced, Canadians could work with $5,000 of contribution room. In 2023, its cumulative contribution room has grown to $88,000 and the annual contribution now sits at $6,500. Today, I want to explore how Canadian investors can grow a $40,000 TFSA to $400,000 over the next decade. Let’s jump in.

If this growth stock returns to form, it could make its shareholders very happy

Air Canada (TSX:AC) is a Montreal-based company that provides domestic, United States transborder, and international airline services. Canada’s top airliner has faced major challenges twice over the past 15 years. In the late 2000s and early 2010s, it fought to survive the 2007-2008 financial crisis and the Great Recession. Then, in 2020 and 2021, it was forced to largely shutter its business due to the COVID-19 pandemic.

Shares of Air Canada have shot up 15% month over month as of close on May 19. That has pushed the stock into the black so far in 2023. Air Canada passed through major turbulence in the early 2010s before finishing the decade as one of the top growth stocks on the TSX. At one point, its stock dropped below the $1 mark in 2012 before closing at $48.85 on December 31, 2019.

In the first quarter of fiscal 2023, the company delivered passenger revenue growth of 53% to $4.08 billion. Meanwhile, operating revenues soared 90% to $4.88 billion. The airline industry is not out of the foods as murmurs of a potential recession continue, but I’m happy to snatch up Air Canada at its current price. This stock could be a game changer in your TFSA this decade.

Here’s an underrated financial stock that is perfect for a TFSA in the long term

goeasy (TSX:GSY) is a Mississauga-based company that provides non-prime leasing and lending services under the easyhome, easyfinancial, and LendCare brands to Canadian consumers. Its shares have jumped 17% over the past month. That has pushed the stock into positive territory in the year-to-date period.

The company released its first-quarter fiscal 2023 earnings on May 9. It reported loan originations growth of 29% to $477 million. Meanwhile, its loan portfolio increased 39% to $2.15 billion. goeasy achieved revenue growth of 24% to $232 million.

This TSX stock was hit hard during the March 2020 COVID-19 correction. The stock dipped below the $30 mark and had amazingly climbed above $120 by the middle of March 2021. goeasy currently possesses a favourable price-to-earnings ratio of 10. Meanwhile, it offers a quarterly dividend of $0.96 per share. That represents a 3.5% yield.

One more exciting growth stock to snatch up in your TFSA

WELL Health Technologies (TSX:WELL) is the third stock I’d look to add to our hypothetical TFSA in the final weeks of May. This corporation is based in Vancouver and operates as a practitioner focused digital health company in Canada, the United States, and around the world. Shares of WELL Health have surged 63% so far in 2023.

Investors got to see WELL Health’s first batch of fiscal 2023 earnings on May 12. The company achieved record quarterly revenue growth of 34% to $169 million. Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 14% to $26.7 million. WELL Health reaffirmed its adjusted EBITDA growth guidance of 22% compared to 2022.

WELL Health is still trading in attractive value territory compared to its industry peers. TFSA investors should be eager to get in on the telehealth sector with this hot TSX stock.

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 Ambrose O'Callaghan has positions in Goeasy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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