Written by Amy Legate-Wolfe at The Motley Fool Canada
If you’re investing in the stock market, you can admit it. The goal you seek is riches, right? We all want to be that one person who finds the stock we all wish we could have bought way back when. But riches looks different to everyone. So what exactly could riches entail, and how on earth can you get there?
First, get a TFSA
If you’re hoping to strike it rich, then you need a Tax-Free Savings Account (TFSA). Making all that money isn’t going to do you any good if you have to give half of it to the Canada Revenue Agency (CRA). The TFSA continues to add on contribution room every year. Now, if you were 18 in 2009 when it started, you have $88,000 in contribution room. That will soon increase by $7,000 come January 1, 2024.
However, the TFSA alone isn’t going to make you rich. You need to contribute. So I would consider trying to max out that limit each year, putting aside contributions automatically. To do this, consider creating automated contributions every time you get paid. That way you don’t even have to worry about it!
Now, of course, you’re going to want to diversify and work with a financial advisor to create a perfect portfolio based on your preferences. But for the sake of this article, these are two great stocks that could get you off on the right foot.
Royal Bank of Canada
First off, the Big Six Banks are excellent options to consider for your portfolio right now if you want to strike it rich. That’s because they offer long-term income that will remain steady and stable for decades. How do I know? Because they’ve been around for over a hundred years in most cases.
Such is the case with Royal Bank of Canada (TSX:RY). It’s now the largest of the Big Six Banks based on market capitalization, and tied based on assets under management. It continues to be quite wealthy thanks to its wealth and commercial management sectors. And it continues to expand as well, hoping to acquire another Canadian bank and grow in the process.
Shares of Royal Bank stock are down 12% in the last year, offering a 4.53% dividend yield. That’s far higher than its five-year average of 3.9%. Further, in the last two decades, shares have increased by 263%. That’s immense growth you can certainly look forward to again, plus a quick bounce back after this bear market.
Yet if you’re really hoping for riches, you’re going to want to think outside the box a bit. But there are still safe options, even among tech stocks. These stocks have increased volatility in the last few years, but there is one that is a shining example of getting in on the ground floor.
Constellation Software (TSX:CSU) created a spinoff company that will be a new European version in its image. Topicus.com (TSXV:TOI) will look to acquire software companies and put them out under their own brand. These are essential software companies that produce our everyday needs, from taking out library books to running trains.
Yet because Topicus stock is so new, you can get a great share price. Only out for a year and a half, the company’s shares are already up 43% in that time. And again, if you look at the history of Constellation stock as an example, there is far more room to grow. So if you want riches, I would certainly consider a stock that already had a history, though from its parent company.
The post TFSA: Invest in These 2 Stocks for a Real Shot at Riches appeared first on The Motley Fool Canada.
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Fool contributor Amy Legate-Wolfe has positions in the Royal Bank of Canada. The Motley Fool has positions in and recommends Topicus.com. The Motley Fool recommends Constellation Software. The Motley Fool has a disclosure policy.