When it comes to building generational wealth, investors should focus on the next couple of decades, perhaps well beyond one’s expected retirement date. Undoubtedly, thinking about 30 years ahead might be a bit out of the question for most investors, but for those who want to pass down generational wealth to future generations, they may need to think about how their portfolio will fare over the next 40, 50, or even 60 years.
Of course, even if you don’t make it to Warren Buffett’s age, the big takeaway is that one should think less about the day-to-day noise. Even for matters that are real and troubling markets (think the conflict going on in Iran right now), the fact of the matter remains that a 10% decline shouldn’t bother you when you’re considering the wealth-creative potential of the stock market (and REITs or precious metals) over a multi-decade horizon.
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Market volatility might not matter as much if you’re thinking in terms of decades
Indeed, we could have a bear market this year, but in the grander scheme of things (think the next 50 years), there’s going to be many such moments where the fear gauge goes off the charts, and everyone is thinking about hitting “sell” before a horrifying situation gets even worse. Even though the broad market can’t crash to zero, it certainly can feel like such, especially for market newcomers who may have just bought their first stock at the start of the year.
So, if you bought tech stocks with your 2026 TFSA contribution this January, you’re probably feeling a bit woozy. But do know that you’re most definitely not alone, with a position that’s immediately in the red. As long as you ride things out and avoid timing markets, I do think that investors will be fine en route to the next few decades of appreciation.
In short, if you’ve got a longer horizon than most (50 years will do it) and the temperament to not get scared when the market slides, you might have what it takes to build generational wealth. Of course, living frugally and investing frequently can help you take your retirement and generational wealth ambitions ahead of schedule. Perhaps for some, generational wealth and leaving a legacy come ahead of retirement.
TD Bank
Dividends mean a lot when you’re looking for total returns over extended periods. TD Bank (TSX: TD) stands out as a dividend grower that’s looking cheap and worth buying and holding for extremely lengthy periods of time. If you’ve got a time horizon measured in decades, a bank stock is worth banking on, in my view.
As AI tech and all the sort improve the banking experience over time (think reduced operating costs that could be passed on to consumers), I do think TD Bank is poised to keep delivering capital gains and dividend growth for the long haul. When you consider how far trading commissions and investment fees have fallen over the decades, it’s clear that digital banking has changed significantly and for the better.
Whether it’s AI’s role in reducing fraud or the rise of robo-advisory solutions, the future certainly does seem bright for Canada’s biggest and boldest financials. Combined with strong capital ratios and the ability to make it through the occasional economic crisis, I view the big banks as built to last, especially for the long-term investors who can ride out the ups and downs.
