Have you ever thought that you could become one of those people who become millionaires by just investing in the stock market? If you’re at all skeptical, you might think it’s a pipedream, but learning how to maximize the potential of retirement accounts like the Tax-Free Savings Account (TFSA) can make the dream seem much closer to reality.
This account has been a blessing for Canadians since its introduction in 2009. Any holdings you contribute to your TFSA are with after-tax dollars, meaning that you’ve already paid taxes on it. Any returns that your eligible TFSA holdings generate will, in turn, not incur taxes. The returns can grow your wealth without taxes on interest, dividends, or capital gains.
If you want to try to become a millionaire as an investor, it’s important to understand that you’re in it for the long haul.
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Rome wasn’t built in a day
Many people assume that becoming a millionaire requires shoring up on savings. By parking your money in an account, you can generate interest income from it. However, the rate of returns, especially with the key interest rate cuts, cannot speed up your wealth growth even with compounding.
Instead of simply setting money aside, putting that money to work for you in the stock market can yield much better returns. With the right portfolio of stocks, you can enjoy tax-free wealth growth through dividends and capital gains. By reinvesting the returns to purchase more shares and growing your portfolio, you can compound it to accelerate the growth. This way, achieving financial freedom can be much faster.
The exact math might be more complex, but the principle is simple: Someone who has invested for 60 years in the market will need to save less than someone investing in the market for 40 years to get to the same point. Since compounding already grows the initial capital you invested, the returns are simply greater each year. The more you keep investing, the faster you can grow your wealth.
While saving more will help you get there faster, using a disciplined approach and starting early are key factors to real success as an investor.
How much to save each month
Having an exact formula for how much one should save would be ideal, and there would be far more millionaires in Canada right now if such a formula were possible. There can never be a solution that works the same for everyone. Each individual has their own life goals, requirements, age, and earning capacity.
Suppose you invest for 35 years, with a portfolio earning an average annual return of around 4.7%. During this period, you consistently save about $980–$1,000 per month (roughly $11,800–$12,000 per year). This would grow into a portfolio value of approximately $1,000,000-plus over time.
Now, consider a shorter timeline of someone investing for 30 years with the same annual returns. In this scenario, you’d have to save closer to $1,300–$1,350 per month (about $15,800–$16,200 annually) to reach a similar portfolio value.
Foolish takeaway
Investing in high-quality dividend stocks can be the best way to achieve the kind of returns it would take to become a millionaire sooner. To this end, Brookfield Asset Management (TSX:BAM) might be one of the top picks to consider.
Brookfield is a $99.8 billion market-cap company that provides alternative asset management services across various sectors of the economy worldwide. The company effectively invests in everything from renewable power and transition to real estate, the credit industry, and even private equity.
The global alternative asset manager has been doing well over the years, and despite rising geopolitical tensions, it did remarkably well in 2025. The company’s fee-related earnings were up by 22% from the previous year. It saw a 14% increase in distributable earnings, and its fee-bearing capital was over $600 billion. With the recent dividend hike, Brookfield now pays its investors US$0.50 per share, translating to roughly 4.7% in annualized dividend income.
A well-capitalized stock like Brookfield Asset Management can be an excellent foundational holding to start building your millionaire TFSA portfolio.
