Business & Investment

Millennials: Convert $ 6,000 TFSA Donations to $ 25,000 in Five Years

For millennials, there can be a significant shortage of funding. Especially now. But if millennials are trying to build real wealth in the next few years, they don’t have to look for more than one tax-exempt savings account (TFSA) and real estate investment trust (REIT).

REITs with diverse characteristics may be less volatile than peers and common stocks.These REITs can be great, even in the event of a housing or market crash in the next few years. Defensive play.

One such REIT that investors should consider is Northwest Healthcare Reit (TSX: NWH.UN). While this REIT may seem like a play in health care, it has the diverse portfolio that millennials need to generate wealth. So that’s why you should consider it for your $ 6,000 donation room in 2021.

International investment

If there is one thing investors should look for, it is an international exposure, regardless of equity. NorthWest has high quality international healthcare facilities in Canada, Brazil, Europe, Australia and New Zealand that generate 189 revenues. This exposure to countries other than Canada reduces risk and provides millennials with access to a variety of developed markets.

Diversity continues as NorthWest isn’t just focused on one type of healthcare property. We operate clinics, clinics and hospitals. These types of buildings are guaranteed long-term rentals and stable occupancy. This can be seen in the company’s recent earnings report.

The third quarter of 2020 was strong, with REITs announcing a 3.4% increase in net operating profit, a stable occupancy rate of 97.2% and an average lease term of 14.5 years. These financial performances remained strong throughout the pandemic, even increasing revenues. Now that the company has signed a $ 3 billion European joint venture, this should increase over and over again. It’s important to note that this confirms how profitable the company can be.

Please enter the dividend

The main reasons millennials consider REITs are dividend.. NorthWest offers a dividend yield of 6.17% at the time of writing. Given the financial situation outlined earlier, it is clear that this dividend will be very sustainable over the next few years. This dividend is a powerful tool for those who want to reinvest and combine it to generate significant wealth.

To emphasize this, let’s see if we invested $ 6,000 in the northwest just five years ago. Since then, share has increased by 125% at the time of writing. It would have turned your $ 6,000 investment into $ 28,322.28 and reinvested your dividends! This means you have access to a compound annual growth rate (CAGR) of 25%, during which the dividend CAGR is 29%.

Stupid takeaway

There is no guarantee that millennials will see the same number produced by Northwest over the next five years. However, there is no doubt that the company’s financially stable earnings are a good reason for investors to look for this stock.

But let’s say the same growth happens for another five years. If you invest that $ 6,000 at today’s price and reinvest your dividends, you can create a portfolio worth $ 25,251.40 in five years without adding an additional penny. Given the ongoing stability and growth, it is not really believed that this cannot happen.

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Stupid contributor Amy Legate-Wolf I own a stake in NORTHWEST HEALTHCARE PPTYS REIT UNITS. Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

Millennials: Convert $ 6,000 TFSA Donations to $ 25,000 in Five Years

https://www.fool.ca/2021/02/06/millennials-turn-your-6000-tfsa-contribution-into-25000-in-5-years/ Millennials: Convert $ 6,000 TFSA Donations to $ 25,000 in Five Years

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