Million-Dollar TFSA: 1 Way to Achieve 7-Figure Wealth

These steps can certainly get you towards a seven-figure TFSA, but it’s going to take some time. You may get there with this top ETF.

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It’s no secret. If you’re a Canadian wanting seven-figure wealth, there is really only one way to get it. That’s through investing. Yet if you think you’re suddenly going to achieve that seven-figure number overnight, investing isn’t right for you. In fact, what you’re likely hoping for is gambling. And here at the Motley Fool, we’re about the long-term burn.

This is why today I’m going to show you exactly how to achieve that seven-figure wealth. All you need is a Tax-Free Savings Account (TFSA) and whatever you can afford to get started. So, let’s get into it.

Start early, invest often

Achieving seven-figure wealth often requires a disciplined and strategic approach to investing. One of the most effective ways to reach this financial milestone is through consistent, long-term investment in a diversified portfolio of stocks, particularly those that offer growth potential and dividends.

Investors should start by regularly contributing to their investment accounts, taking full advantage of tax-advantaged accounts like the TFSA in Canada. By maximizing contributions and reinvesting dividends, investors can benefit from the power of compounding returns. Over time, even modest investments can grow significantly.

From there, selecting the right stocks is crucial. Focusing on well-established companies with a track record of steady growth and reliable dividends can provide both stability and income. Additionally, diversifying across various sectors, such as consumer staples, healthcare, and utilities, can help mitigate risks and enhance returns. Goldilocks stocks, which offer a balanced combination of growth and income, are particularly appealing for this strategy.

Patience and discipline are key. The journey to seven-figure wealth is often a marathon, not a sprint. By maintaining a long-term perspective, avoiding panic during market downturns, and sticking to a well-thought-out investment plan, investors can steadily build substantial wealth over time.

Where to start

Now that we’ve gone over the basics, where should you start investing? If you want something you can buy again and again without thinking, I would consider BMO Canadian Dividend ETF (TSX:ZDV). It currently holds a 4.2% dividend yield, with year-to-date returns up 3.64% as of writing as well.

ZDV focuses on companies that not only offer attractive dividend yields but also have strong fundamentals and the potential for capital appreciation. This dual approach aims to deliver steady income to investors while also positioning the fund for growth over the long term. The exchange-traded fund (ETF) includes a mix of sectors with significant weightings in financials, energy, and utilities, which are known for their robust dividend payouts and stability.

Furthermore, the dividends received from the underlying stocks in the ETF can be reinvested, allowing investors to take advantage of compound growth. This reinvestment strategy can significantly enhance the long-term returns of the ETF, making it an attractive option for those looking to build wealth over time while receiving regular income.

Altogether, the ZDV ETF provides a compelling investment option on the TSX for those seeking a blend of growth and dividend income. Its diversified portfolio, professional management, and reinvestment opportunities make it a strong candidate for investors aiming to achieve significant financial growth. And over time, it can certainly help investors achieve that seven-figure goal through consistency and tax-free earnings.

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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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