This year, make it a point to work smart. While working for money now, make money work for you in the future. You must have read articles talking about how much your portfolio would be worth had you invested $10,000 in a stock 10-15 years back. It is time to act on these learnings and be the one earning those returns 10-15 years from now. Remember, money won’t work for you unless you put it to work.
How to make your money work for you
You may be an employee earning a fixed monthly salary and an annual bonus. Or you may be a business owner having unequal earnings, with periods of windfall gains, stagnant profits, or losses. In both scenarios, you are working to earn money in different ways. Similarly, you can put your money to work to earn a fixed monthly payout from dividend stocks or generate wealth in the long term from growth stocks.
Just as you spend time preparing for an interview, learning about your job or business, spend time learning about the company you invest in. Every investor will build their own understanding of the company and devise their investing approach accordingly. As you invest, you learn more about the stocks. There are ups and downs in every work, but that doesn’t stop you from working. Similarly, investing must go on. All you have to do is change your approach.
Two stocks you can put your money
If you want your money to give you a fixed amount every month and grow the payout as per inflation, just as a salary, Slate Grocery REIT (TSX: SGR.UN) is a good investment. It is a real estate investment trust (REIT) that manages 117 properties in the United States. Its tenants are grocers that have a resilient business model. A grocery shop will always be open in every economy. This pure-play grocery REIT earns rental income from grocers who are sticky tenants. The rental revenue grows every year and is passed on to shareholders in the form of distributions.
Slate Grocery REIT has been growing its distribution at an average annual rate of 3%. It can maintain this growth, given the limited number of new constructions and increasing demand for grocery stores. E-commerce is unlikely to replace grocery stores because the latter is also the fulfillment centre for online grocery orders.
Slate Grocery REIT’s stock price is down 24% since the interest rate hike began and pulled down the fair market value of its property portfolio. Now is a good time to invest in the REIT, as you can lock in a $1.159 annual payout for $12.56 a unit, which comes to a yield of over 9%.
If you invest over $1,000 to buy 80 shares of Slate Grocery REIT, you can get $92.7 in annual dividends ($7.7 per month). This amount could grow if the REIT continues to increase its distribution. If you keep investing some amount in the REIT and accumulate more units, the $92.7 annual dividend could become $9,200 over time.
Growth stocks to generate wealth
If you want your money to work like a business, consider investing in a growth stock like Nuvei (TSX: NVEI). The payments platform is currently going through a slow growth period as its acquisition of Paya is generating slow returns. Nuvei is eyeing to become the preferred payment platform provider for large enterprises and has secured the required tech from Paya. However, the overall market weakness reduced business spending on technology as they adopted a wait-and-watch approach.
An economic recovery could see momentum build up in the payments space and drive Nuvei’s revenue and earnings. Now is the time to buy this stock as many investors are fearful of another short-selling round by Spruce Point Capital, which has minted money twice by questioning Nuvei’s business decisions and management. However, analysts find these accusations wrong and remain bullish on the stock.
Nuvei has several opportunities to grow through acquisitions and tap market share. It can also benefit from another crypto cycle.
