For most Canadians, the TFSA contributions are quite constrained compared to the RRSP contributions. However, with the right securities and enough time, you can grow your TFSA nest egg to considerable proportions, even with the contribution limits taken into account.
There are plenty of stocks that can help you grow $1,000, a fraction of a fully stocked TFSA, nearly five times, if you hold on to them long enough. And there are three that should be your first pick for this job.
An Australian iron ore company Champion Iron (TSX:CIA), headquartered in Australia and with operations in Canada, is one of the best options Canadian investors have to gain exposure to this metal commodity. Iron is mostly used for steel nowadays, and steel is an integral part of our modern societies.
The Champion Iron stock is not a worthy holding simply because it offers you healthy exposure to an almost always-in-demand commodity, but also thanks to its performance and growth potential.
Despite two massive slumps (and the third currently underway), the stock has grown roughly 391% since the beginning of 2019. At this rate, the stock is more than capable of increasing $1,000 capital in your TFSA to $5,000 well within a decade. And if it continues on this growth trajectory, you may achieve even higher growth if you hold on to the stock for over a decade.
An engineering solutions company Service businesses are usually not laden with costs that commodity and heavy industrial companies are generally plagued with. And lower overheads typically offer more flexibility. This is just one of the few good things going for WSP Global (TSX:WSP).
This Montreal-based company has experienced phenomenal growth, considering its humble beginnings. Its primary focus now is engineering solutions for a wide variety of industries, including healthcare, energy, and the environment, which balances out its energy business for a better ESG profile.
WSP Global stock has been quite a consistent grower for the past eight years and has appreciated roughly 346% since Jan. 2014. This includes the post-pandemic growth, which was considerably faster than its former growth pace, and the minor correction, which is still underway.
But even if we assume a 300% a decade growth pace, the stock will help you achieve your growth goal within two decades, with much more safety than typical growth stocks offer.
An international real estate company When it comes to real estate stocks in Canada, most people think of REITs. But other, quite tasteful options are available, including Colliers International Group (TSX:CIGI)(NASDAQ:CIGI). With its primary focus on the real estate industry, the company offers various services, including project management, mortgage, insurance, and even landlord representation.
Its geographical reach is just as impressive, with $65 billion in assets under management, two billion square feet under its banner, and a presence in 62 countries.
It pays dividends, and the yield is paltry, especially compared to the real estate sector average. However, its growth has been both consistent and adequately rapid. The price grew about 382% in the last decade, which is enough for your growth goals if you are ready to hold the stock for a couple of decades.
Foolish takeaway The Tax-Free Savings Account (TFSA) can be a powerful option to stash your growth stocks. It will ensure that when your nest egg is complete and ready to fund your retirement or fulfill some other financial goal, it doesn’t raise your tax bill. And by mixing your TFSA and RRSP income in the right proportions in retirement, you can significantly reduce your tax bill.
The post How to Turn a $1,000 TFSA Into $5,000 appeared first on The Motley Fool Canada.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends COLLIERS INTERNATIONAL GROUP INC and WSP GLOBAL INC.