While most people want to be millionaires, not everyone acts on it as a realistic possibility. If you are a Canadian stock market investor, know that creating wealth of $1 million is very much a possibility. All you need is a degree of patience and discipline for a few years. With well-placed investments in stocks with robust underlying businesses, you can get enough returns to become a millionaire.
To speed up your wealth growth, you can utilize the tax-sheltered status of your Tax-Free Savings Account (TFSA). Learning how to start investing the right way is key to being a successful stock market investor. While stock market investing does not come without its risks, it is one of the best ways to generate substantial wealth in the long run.
With a combination of well-placed bets in the stock market and proper use of TFSA investing, you can become much wealthier down the line. Today, I will discuss two TSX stocks that can be excellent investments in such a self-directed TFSA portfolio.
The country’s largest telecom
BCE (TSX:BCE) is a $49.45 billion market capitalization giant in the Canadian telecom sector. It is the company spearheading the 5G revolution in Canada and is the strongest bet in the industry for most stock market investors. However, recent months have seen its performance on the stock market decline.
Telecom companies require securing substantial capital to fund growth and expansion. Due to higher interest rates, the industry is feeling the pressure of greater borrowing costs, including BCE stock. As of this writing, BCE stock trades for $54.52 per share, down by almost 10% year to date. Despite the decline, BCE stock is not a bad investment.
The growing importance of 5G and interconnectivity means long-term demand for telcos bears good news. A strong future for the industry means excellent growth prospects for industry leaders like BCE stock.
For investors, it means the potential for their investments to grow significantly for decades. Between tax-sheltered capital gains and additional growth through its 7.10% dividend yield, it can be an excellent way to lay the foundations of a millionaire-maker TFSA portfolio.
The biggest dollar store chain in Canada
Dollarama (TSX:DOL) might not be an incredibly exciting business, but that does not take away from its ability to be an excellent investment. The $26.97 billion market capitalization company owns and operates Canada’s largest dollar store retail chain. Headquartered in Montreal, the company has been Canada’s biggest retailer of items worth $5 or less since 2009.
Dollarama is a defensive business that can perform well during harsh economic environments. When people are cutting discretionary spending, businesses offering discounted essentials see a massive uptick in sales. Not only does it offer a degree of defensiveness to self-directed portfolios, but Dollarama stock also injects growth that goes against the broader market.
As of this writing, Dollarama stock trades for $95.96 per share, up by over 20% year to date. Adding its shares to your TFSA portfolio means securing wealth growth through market downturns, while BCE stock potentially delivers growth through booming market environments.
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Foolish takeaway
Suppose you have $45,000 of contribution room available in your TFSA. You can grow that amount into a sizeable nest egg by the time you retire through compounded growth and tax-free returns. This is where carefully utilizing your contribution room and investing in the right stocks can help you achieve your financial goals.
A $45,000 investment growing at roughly 13% annually can theoretically hit $1 million in about 25 to 30 years. While the timeline is never a guarantee with stock market investing, identifying and allocating money to the right publicly traded companies can get you close.
To this end, BCE stock and Dollarama stock have the potential to help you create a millionaire-maker TFSA portfolio.
