Want to Be a Millionaire? All You Need Is 13 years and $50,000 Today

Two hands holding champagne glasses toasting each other with Paris in the background

Data published by Stats Canada earlier this week showed that the average Canadian family earned $61,400 a year after taxes. The data also seems to suggest that less than 4% of the country’s population has more than $1 million in liquid assets. In other words, most families are earning a decent income, albeit barely any are becoming millionaires. 

That got me thinking whether it would be possible for the average Canadian saver and investor to start off with a nominal amount of savings, say $50,000, and become a millionaire within a reasonable time frame.

As it turns out, it’s possible, but requires a few extreme saving and investing strategies along the way. Here’s a closer look. 

Save aggressively

The reason developing countries like India and China are creating millionaires at a faster pace than developed countries like Canada is because of the wide difference in the relative saving rates. 

Households in developing economies tend to save much more aggressively. The savings rate in India at the moment is 30.1%, while the gross savings rate in Canada is a paltry 3%. No wonder most Canadian households don’t stand a chance of entering the millionaires club. 

If you’re looking to beat the odds, boost your savings rate to 10% or 15% of income, it could mean adding roughly $10,000 to your portfolio every year.

By deploying this extra cash into tax-advantaged accounts like the Tax-Free Savings Account (TFSA) or the registered retirement savings plan (RRSP), you could significantly improve your chances of reaching the million-dollar mark.  

Invest aggressively

A high rate of savings is a great first step, but it won’t make you a millionaire. The return on investment is just as important. If you invest your $50,000 in starting capital and $10,000 in annual additions into a high-interest savings account, it could take you 60 years to become a millionaire! 

Instead, focus on high-growth stocks and aggressively expanding technology companies to get there sooner. Stocks like Shopify and Kinaxis have already delivered stunning returns over the past few years and seem to have plenty of room left for the foreseeable future. 

Constellation Software, for example, has delivered an annually compounded growth rate of 40% over the past 10 years alone. Even if the company delivered growth at half that rate (20%) it could turn your $50,000 nest egg and $10,000 annual additions into a million dollars within 13 years.    

I suggest tracking and investing in high-growth stocks like these to reach your wealth goals faster. 

Bottom line

You can’t expect extraordinary results if you follow an ordinary income and savings strategy. Most Canadian families save too little, invest too conservatively and never reach millionaire status in their lifetime.

In fact, the average Canadian family has just $213,800 in assets, much of which is the value of their primary residence. 

In order to beat the odds and become wealthier than your neighbour, aim for a higher savings rate and invest aggressively in high-growth stocks with robust long-term prospects.

A 15% rate of annual savings coupled with $50,000 in capital and a portfolio of high-growth stocks is all you need to reach $1 million in less than 13 years.   

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Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Constellation Software, Shopify, and Shopify. The Motley Fool recommends KINAXIS INC. Fool contributor Vishesh Raisinghani has no position in any of the stocks mentioned. 

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Non-partisan govt essentially a “Mahathir government”, says DAP

A non-partisan government will essentially be a “Mahathir government”, said Democratic Action Party (DAP) leaders on Wed (26 Feb) in opposing interim Malaysian Prime Minister Mahathir Mohamad’s push for a unity government.

Yeo Bee Yin, the National Assistant Publicity Secretary of DAP, said in a Facebook post on Wed that Dr Mahathir’s Cabinet lineup in his proposed unity government will “likely include the same personalities who triggered the current crisis, as well as MPs from UMNO and PAS”, in addition to sidelining DAP and other parties in the process.

“Effectively, it is a Tun government and not a PH government. The promises of the PH manifesto will not be fulfilled,” she said.

Ms Yeo — who is also Malaysia’s Minister of Energy, Science, Technology, Environment and Climate Change — also claimed that the Pakatan Harapan leadership had invited Dr Mahathir to attend the PH presidential council meeting to discuss its concerns over his proposal, but he declined to do so.

Following that, the PH top brass decided to “defend the people’s mandate to the PH government” by deciding to nominate Parti Keadilan Rakyat (PKR) president Anwar Ibrahim for Malaysia’s premiership, she said.

“We call upon all Malaysians to support the nomination of Anwar Ibrahim as the 8th PM of Malaysia, to respect the mandate given in the 14th GE and to ensure continued stability for the nation,” added Ms Yeo.

DAP previously said it would support the renomination of Dr Mahathir as PM.

Party chief Lim Guan Eng told a press conference at DAP’s headquarters in Kuala Lumpur on Mon evening that Dr Mahathir’s resignation — from both the PM and Bersatu party chairman posts — was sparked by his refusal to work with UMNO, a component party of the previous ruling coalition Barisan Nasional.

Mr Lim said he was “surprised” when Dr Mahathir had informed him of his intention to resign from the premier post.

However, Mr Lim said that Dr Mahathir had “clearly stated that he cannot work with Umno when we worked so hard to reject Umno successfully in the 2018 general elections”.

“This consistency and principled stand in rejecting a corrupt Umno should be supported by all Malaysians,” he said, adding that this is “the first time that a Malaysian prime minister is prepared to resign on principle to uphold integrity and combat corruption”.

Dr Mahathir’s resignation came on the heels of swirling rumours circulating last weekend regarding certain factions in the Malay-centric Parti Pribumi Bersatu Malaysia and the PKR parties’ attempts to form an alliance with UMNO and other opposition parties in a bid to establish a new government.

PKR cadres Azmin Ali and Zuraida Kamaruddin were sacked from the party for “betraying” the party, Malay Mail reported.

Dr Mahathir in a televised address on Wed evening said that his resignation was “a means to an end” — namely the country’s betterment — as he feared the prospect of forming a government with UMNO, a component party of the Barisan Nasional alliance that governed Malaysia for 61 years prior to its defeat to Pakatan Harapan in the 14th General Election in May 2018.

However, he said that he was willing to accept those who would leave UMNO to join other political parties.

Dr Mahathir said that many of the country’s politicians are currently prioritising their own political interests at the expense of neglecting bigger issues currently plaguing the nation such as health and the state of the economy.

Touching on the issue of who is next in line to become Malaysia’s PM, Dr Mahathir reiterated his promise to resign to let the Dewan Rakyat — or the lower house of the country’s Parliament — choose his successor.

“If it is true that I have support, I will return. If not, I will accept whoever is chosen,” he said.

The post Non-partisan govt essentially a “Mahathir government”, says DAP appeared first on The Online Citizen.

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The Oil Price Collapse Has Created a Deep Value Opportunity for Investors

Business man on stock market financial trade indicator background.

Oil prices remain under considerable pressures, as the spread of the coronavirus pandemic has sparked considerable fears that a global recession will occur as China’s growth wanes; the East Asian nation and the world’s second-largest economy is responsible for around half of oil demand growth, meaning that a marked decline in economic activity will lead to a significant fall in energy consumption.

That’s been responsible for the international benchmark, Brent, falling by 24% since the end of 2019, and there are signs that oil will remain under pressure at least for the short term.

The sharp decline in prices coupled with the deflation of the optimism surrounding the outlook for crude at the start of 2020 has hit energy stocks hard.

The largest industry ETF, the SPDR S&P Oil & Gas Exploration & Production ETF has lost a whopping 30% since the start of the year, indicating that many oil stocks are now trading at bargain basement valuations.

One that stands out is beaten down Gran Tierra Energy (TSX:GTE)(NYSEMKT:GTE) which has lost 29% over that period. This indicates that despite the risks, there’s considerable opportunity to acquire a deeply discounted upstream oil producer with considerable upside ahead once crude rebounds.

Trading at a deep discount

A key factor underscoring the attractiveness of Gran Tierra is that it is trading at a massive 203% discount to its net-asset-value (NAV). After allowing for the independently calculated value of its proven and probable oil reserves and deducting all long-term liabilities, Gran Tierra has an after-tax NAV of $5.38 per share or around three times its current market value.

That highlights that the driller is very attractively valued — and the considerable upside available once oil rebounds, making now the time to buy.

The key reasons that Gran Tierra has been so harshly handled by the market is that it operates in the strife-torn South American nation of Colombia, where most of its operations are located. Gran Tierra is the single largest landholder in the Andean nation’s southern Putumayo Basin.

Toward the end of 2019, Columbia was rocked by civil insurrection as people protested a wide range of issues including corruption, the murder of community and social leaders, economic reforms and the growing disenfranchisement of civil society.

This, along with elements of the FARC electing to recommence their conflict against the government and the largest remaining guerilla group, the ELN, stepping attacks on infrastructure including oil pipelines sparked considerable fears that the country’s oil industry would be disrupted.

Oil pipelines, which remain the only economic means of transporting crude to key ports, have long been a popular target of armed groups in their fight against the Colombian government.

Blockades of major roads also remain a problem and were responsible for production outages caused by Gran Tierra being forced to shutter production at two blocks in the Putumayo Basin in 2019.

For these reasons, Gran Tierra is vulnerable to production outages that will impact its earnings, particularly in an operating environment in which Brent remains soft, making it highly dependent on growing production to bolster revenue.

Nonetheless, the market’s perception of risk appears overblown and it’s not as severe as anticipated. Gran Tierra expects to generate free cash flow of US$60 million to US$80 million during 2020 after funding its well development and exploration program where it expects to drill up to 24 wells during the year.

That free cash flow will be directed to reducing debt, strengthening Gran Tierra’s balance sheet and financial flexibility, a positive move in the current difficult operating environment.

Foolish takeaway

The poor outlook for crude coupled with growing economic uncertainty makes the energy sector an unappealing investment.

Nevertheless, those drillers with quality assets, the ability to generate free cash flow and robust balance sheets remain an attractive investment.

With its history of growing oil reserves and production, Gran Tierra is very attractively valued given that it’s trading at a third of its after-tax NAV, indicating considerable upside available.

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One new confirmed cases of Covid-19 infection: Five cases discharged

As of 25 February 2020, 12 pm, the Ministry of Health (MOH) has confirmed and verified one more case of COVID-19 infection in Singapore which is linked to a previous case.

This brings the total number of cases to 91 so far.

About the confirmed cases

Case 91

Case 91 is a 58-year-old female Singapore Citizen who has no recent travel history to China. She is linked to Case 66.

More details

She reported onset of symptoms on 23 January and had sought treatment at a general practitioner (GP) clinic on 1 February, 6 February and 10 February. As she had been identified as a contact of Case 66, she was referred by MOH to the National Centre for Infectious Diseases (NCID) on 18 February. Subsequent test results confirmed COVID-19 infection on 22 February afternoon.

Prior to hospital admission, she had mostly stayed at her home at Rivervale Drive.

Update on condition of confirmed cases

To date, a total of 58 cases have fully recovered from the infection and have been discharged from the hospital. Of the 33 confirmed cases who are still in the hospital, most are stable or improving. Seven are in critical condition in the intensive care unit.

Links between previous cases found

Further epidemiological investigations and contact tracing have uncovered links between previously announced and new cases. This was made possible with the assistance of the Singapore Police Force.

a)        Six of the locally transmitted confirmed cases (Cases 31, 33, 38, 83, 90 and 91), as well as Cases 8 and 9, are linked to The Life Church and Missions Singapore (146B Paya Lebar Road).

b)        These six cases are now linked to another 23 confirmed cases (Cases 48, 49, 51, 53, 54, 57, 58, 60, 61, 62, 63, 66, 67, 68, 70, 71, 73, 74, 78, 80, 81, 84, 88) who are linked to the Grace Assembly of God.

c)         Nine of the confirmed cases (Cases 19, 20, 21, 24, 25, 27, 28, 34 and 40) are linked to Yong Thai Hang (24 Cavan Road).

d)        Three of the confirmed cases (Cases 30, 36 and 39) are linked to the business meeting held at Grand Hyatt Singapore from 20 to 22 January.

e)        Five of the confirmed cases (Cases 42, 47, 52, 56 and 69) are linked to the Seletar Aerospace Heights construction site.

Investigations on these clusters are ongoing. In addition to the clusters, our investigations have identified the following links between cases:

  • Case 44 is linked to Cases 13 and 26;
  • Case 72 is linked to Cases 59 and 79;
  • Case 50 is linked to Cases 55, 65 and 77;
  • Case 75 is linked to Case 41; and
  • Case 86 is linked to Case 82.

Contact tracing is underway for the other nine locally transmitted cases to establish any links to previous cases or travel history to mainland China.

Update on contact tracing for confirmed cases

Contact tracing for the confirmed cases is ongoing. Once identified, MOH will closely monitor all close contacts. As a precautionary measure, they will be quarantined for 14 days from their last exposure to the patient. In addition, all other identified contacts who have a low risk of being infected will be under active surveillance and will be contacted daily to monitor their health status.

As of 25 February 2020, 12 pm, MOH has identified 2,846 close contacts who have been quarantined. Of these, 371 are currently quarantined, and 2,475 have completed their quarantine.

At least 77,000 people have now been infected in China and around the world with a death toll of more than 2,660 that is mainly concentrated in China, Wuhan where the virus originated from.

The post One new confirmed cases of Covid-19 infection: Five cases discharged appeared first on The Online Citizen.

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