BYD:CC - Late Start? How to Save for Retirement Fast in Just 1 Decade
2023-08-09 19:45:00 ET
“Better late than never” is good advice for virtually all life’s phases and activities, including investment. Even if you have never invested your savings to build up a retirement nest egg and are just a decade away from retirement, you can still do a lot.
Let’s say you have a decent amount of retirement savings, and you can invest about $120,000 in a retirement nest egg; let’s see how it might perform in three companies, assuming they offer at least half the growth to their investors in the next decade as they did in the past one.
A collision repairs centre company
Boyd Group Services ( TSX:BYD ) is one of the largest operators of collision repair centres in North America (non-franchised) and dominates a specific market segment. It has five different brands and business segments, including collision and glass repairs and claims services. The company has 800 locations in Canada and the U.S. — an impressive geographical presence.
The stock, while not a consistent grower per se, has experienced exceptional growth in the last decade and returned about 966% to its investors over the last ten years, the bulk of which came from its capital growth and roughly 60% from the dividends. If the stock offers even half of that growth in the coming decade, you can turn $40,000 in this company into about $180,000.
A tech stock
Tech stocks in Canada are known for their powerful growth but not for their consistency. However, Constellation Software ( TSX:CSU ) offers you the best of both worlds. It has been one of the most consistently growing stocks trading on the TSX in the last two decades, and the growth rate has been phenomenal.
In the last decade alone, the stock has risen by over 1,590%, and if you add the dividends as well, the returns over the last 10 years become 1,949%. Even if we halve that, we would still have a growth of about 10-fold within a decade. If the stock manages to achieve that, you can grow your $40,000 capital to $400,000 in a single decade.
A financial stock
Financial giants, especially banks in Canada, tend to move rather slowly (though consistently). But the alternative lender goeasy ( TSX:GSY ) has been a rapid grower since its inception. It’s an alternative financial company that offers personal loans to Canadians with bad credit, a market that’s ignored by conventional banks because of the increased risk factor.
By catering to this market segment, goeasy grew to a significant level and currently has over 400 locations across Canada. The stock followed suit, and even though it has lost over 40% of its valuation from the peak, the last 10-year returns are significant — well over 1,300%. Even if the stock performs half as well going forward, you may still experience 6.5 times growth. A capital of $40,000 may rise to $260,000, over a quarter of a million dollars.
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Foolish takeaway
Collectively, the three stocks can grow your $120,000 savings to $840,000 if they perform half as well as they did last decade. Combined with your government pensions, this amount may be enough for a financially healthy retirement. So, even if you haven’t focused on retirement planning till now, you can still achieve a lot with the right investment choices.
The post Late Start? How to Save for Retirement Fast in Just 1 Decade appeared first on The Motley Fool Canada .
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Boyd Group Services and Constellation Software. The Motley Fool has a disclosure policy .
2023