Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Investing in these 3 stocks can now make you a retired millionaire

Investing in these 3 stocks can now make you a retired millionaire

For almost all of us, playing for a professional sports team or writing a best-selling book or winning an Oscar is just a dream – it’s unlikely to happen. But there are still some wonderful life achievements that are on our strength – like the retirement of a millionaire.

With enough time and effective savings, most of us can become millionaires and we can get there by simply investing in the entire stock market – perhaps through the low-cost S&P 500 index fund. Your portfolio can grow extremely fast if you include some companies that are growing fast (and continue to do so).

A man with a white beard in a suit and a bow tie has a cigar in one hand in the other.

Image source: Getty Images.

Growing a million dollars

Before naming promising companies, here’s a look at exactly what it takes to make millions of dollars. It all depends on three factors:

Your time to invest

Clearly, the longer your investment can grow, the bigger your nest will become. That’s why it’s best to start early – even in your 20s – as this may even allow you to retire earlier.

The growth rate of your investment

If you save and invest aggressively for decades, but your money grows by only 1% or 2%, you may still not achieve millionaire status. The stock market, for many decades, has grown at an average annual rate of nearly 10%. This is a good goal to pursue, although the market may be on average smaller (or larger) Yours investment period.

How much do you invest

Finally, how much you invest also matters a lot. The table below shows how much you could accumulate regular savings of different amounts for different periods:

Growing with 8% for

$ 10,000 invested annually

$ 15,000 invested annually

$ 20,000 invested annually

Five years

$ 63,359

$ 95,039

$ 126,718

10 years

$ 156,455

$ 234,683

$ 312,910

15 years

$ 293,243

$ 439,865

$ 586,486

20 years

$ 494,229

$ 741,344

$ 988 458

25 years

$ 789,544

$ 1,184,316

$ 1,579,088

30 years

$ 1,223,459

$ 1,835,189

$ 2,446,918

Data source: Calculations by author.

This table assumes an average annual growth rate of 8%, which you can hope to achieve with a long-term investment in an index fund. Below are three companies you might consider investing in to help you become a millionaire until retirement. Each of them has grown with a faster clip than the common market and seems ready to continue doing so.

1. Amazon.com

Online trade juggernaut Amazon.com (NASDAQ: AMZN) apparently growing with a fast clip for a long time. Its average annual 20-year share price growth rate was 26.3% recently, enough to turn a $ 10,000 investment into $ 1 million. It may be difficult for companies to grow as fast as they did in the past as they grow – but over the past decade, Amazon’s average annual growth rate has been even steeper – 33.8%. (By comparison, the S&P 500 has averaged 6.9% and 13.9%, respectively (with reinvested dividends) over the past 20 and 10 years.) No one should expect average annual earnings of 25% or more over the next decade, but Amazon offers many reasons to expect market growth in the foreseeable future.

For example, it fired all cylinders during the pandemic, with third-quarter net sales up 37 percent from a year earlier to $ 96 billion, while net income tripled. The company has added many more workers and plans to add another 100,000 permanent workers who will receive at least the company’s minimum wage of $ 15 per hour. While many, if not most, people only associate it with its online offerings, one of its biggest cows today is the cloud computing platform Amazon Web Services (AWS), which grew 29% to 11.6 billion dollars in the third quarter, and boasts a 33% market share in its industry.

One man in a suit and tie hands a bundle of money to another.

Image source: Getty Images.

2. PayPal

PayPal 09.30 NASDAQ: PYPL is another distinctive contractor, with an average annual growth rate of 37.1% since being separated from eBay in the summer of 2015. You probably assume that this is a relatively large financial services company, as so many purchases you make online offer a PayPal option. But you probably don’t know how big business is this. As a start, its market value was recently $ 241 billion – which exceeds the recent market value of Coke,, Netflix, and AT&T and is more than twice from Wales Fargo or Citigroup.

PayPal serves about 361 million active users worldwide (that’s roughly the population of the United States) and processed about four billion transactions worth about $ 247 billion in its third quarter. On an annual basis, this would be about 12 billion transactions worth close to trillion dollars. This is impressive enough, but also keep in mind that PayPal also owns Venmo, a fast-growing mobile payment system.

№ 3: Activision Blizzard

Activision Blizzard 09.30 NASDAQ: ATVI is a powerhouse in the video game industry, growing by an average of 25.2% annually in the last 20 years and 21.8% in the last 10 years – with reinvested dividends. Part of its long-term success is probably due to the fact that its products are addictive – not a bad business model! (In fact, a recent study found that only 10% of gamers can become genuinely addicted to the game, with negative consequences in their lives.)

If you’re familiar with video games, you’ll see some familiar names among Activision Blizzard titles, many of which have become hit hits. The company’s titles include the Call of Duty, World of Warcraft, Hearthstone, Overwatch, Warcraft, StarCraft, Diablo and Candy Crush franchises. In its last quarter, the company reported about 390 million active users per month, with net revenue growing by 52% on an annual basis. The future of Activision Blizzard looks quite promising, with the video game market expected to grow by almost 13% per year between 2020 and 2027, according to Grandview Research.

All three companies are doing well and are able to continue to do so for a long time. It’s worth adding them to your investment watch list, and it might even be worth buying them now if you think they’re undervalued and expect to stay in the long run.

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