1 TSX stock to buy on the market that could make you a millionaire

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Several factors can make you a millionaire sooner:

  • Savings
  • Investing (buying good stocks during a market sell-off helps a lot!)
  • Remaining time invested

How much do you save regularly?

Saving regularly or spending less than you earn is the first step to becoming a millionaire. Ideally, you would pay off your consumer debt, such as credit card debt, each month with the remaining money.

The general rule is to save 10-20% of your after-tax income. When you are able to save each month, the creation of wealth begins. The earlier you start saving, the better. But you shouldn’t stop there. Let’s say you save $500 per month; it will take more than 166 years to reach $1,000,000!

After building up an emergency fund to cover three to six months of your living expenses, you should consider putting the excess cash to work by investing it for satisfying returns.

What rate of return are you getting?

The higher your savings rate and the higher the rate of return you can get on your investments, the faster you will reach $1,000,000. This is where we buy well TSX stocks in a market sell-off come into play.

Although the stock lost half of its value in this market sell-off, easy (TSX:GSY) The stock has again recorded a compound annual growth rate (CAGR) of approximately 33.7% over the past 10 years! It is clearly a market outperformer.

This made millionaires from easy stock investors who had invested around $54,788 a decade ago. However, most people do not invest in such a lump sum unless they have an inheritance. A more common scenario is for investors to periodically invest much smaller amounts (their savings).

goeasy has also experienced a decade of massive growth, resulting in an earnings per share (EPS) growth rate of around 29% per year. It’s a big question mark as to whether he can achieve that kind of growth over the next decade.

Give your investments time to grow

I believe that the non-preferred consumer lender is essential to serve a certain niche of Canadians who cannot borrow money through traditional means. With inflation (especially as high as it is right now), there’s a good chance the company could grow its EPS at a CAGR of around 15% over the next few years.

Let’s be more conservative and say it grows EPS by 12% per year over the next 10 years, continues to pay a return of around 3%, and steadily fills the undervaluation gap to deliver annualized returns of around 17% per year. By investing $500 per month at the beginning of each month, investors will arrive at $146,434 by the end of the decade. To reach $1,000,000 in this scenario, an investor would need to invest $3,414.50 each month instead.

The sooner you start investing and the longer your money stays invested for a satisfying return, the sooner you can become a millionaire.

goeasy stock could make you a millionaire (or get you much closer to it)

The market sell-off caused the valuation of goeasy stock to decline, causing it to fall by around 20% from its normal long-term valuation. Heck, analysts think the stock is on a big sell-off – it’s almost halfway!

TSX stock is yielding around 3.4% and could very well deliver annualized returns of 17% over the next decade, which would outperform long-term average market returns by 7-10%. Therefore, no matter what, now is a good time to accumulate goeasy shares.

That said, it would be wise not to put all your eggs in one basket. Also learn about the other top stocks on the TSX.

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