Do you dream of turning an average income into a seven-figure retirement nest egg? You're not alone. And it's absolutely possible!
You won't be able to accomplish it with the relatively low returns on instruments like savings accounts and money markets, though. In fact, even with interest rates now at two-decade highs, you probably won't be able to make it happen with bonds and Treasuries. Rather, the best way to turn a little money now into a lot of money later is still the stock market.
Here's a rundown of three stocks that could help you retire a millionaire. All three of them are in competitive but resilient businesses; they are each leveraging their unique strengths.
1. Nvidia
Its roots are in the video gaming business, but Nvidia (NVDA 6.18%) has become so much more than a top technology provider for gamers. The same basic tech behind computer graphics cards is perfectly suited for use in artificial intelligence (AI) applications.
Estimates put the company's share of the AI hardware market at about 80%, and some believe it could be more than that. Artificial intelligence also now accounts for more than half of Nvidia's business after this segment saw sales growth of more than 171% year over year and 141% quarter over quarter during the three months ending in July.
Credit the launch of its Grace Hopper superchip, which further expands the already incredible potential of AI.
The AI evolution is just getting started. Research firm Technavio believes the market for the AI chips Nvidia makes will grow at an annualized pace of more than 60% through 2027. Similarly, Precedence Research estimates this sliver of the computer hardware market will grow from last year's $43 billion to $248 billion by 2030.
Even if Nvidia loses some of its market share to rivals like Advanced Micro Devices and Intel, there's enough serious long-term growth in the cards to continue lifting the stock to heartily higher levels.
2. Dutch Bros
Dutch Bros (BROS -1.04%) might not be a household name, but that could change in the foreseeable future for this chain of coffeehouses. To make the obvious comparison to Starbucks misses a key point about the company. Dutch Bros drive-thrus offer a more casual (and usually faster) experience.
They're more locally focused, too. It's not unusual for one of the company's outposts to publicly support a neighborhood charity. It's also not unusual for employees to raise funds for a fellow employee in need. It's a successful business largely because its corporate culture is strong and healthy.
That's not the only reason Dutch Bros stock has the potential to help you retire a millionaire, however. Newcomers will be stepping in at an exciting time in the company's history. Incoming CEO Christine Barone is looking to have 4,000 stores up and running within the next 10 to 15 years, versus only 754 stores as of the middle of this year.
This goal of a fivefold increase in its store count will likely require the sale of stock or the issuance of debt. And that should more than pay for itself in the long run because of how well its drive-thrus perform and grow the company's already profitable business.
3. Visa
Lastly, investors seeking reliable long-term growth should consider Visa (V -0.23%). It's not a complicated business: The credit-card issuer provides a convenient means for consumers to make purchases from merchants, collecting a small portion of each transaction's value in the process.
During the quarter ending in September, the company facilitated 68.4 billion transactions worth a total of $3.2 trillion, providing net revenue of $8.6 billion for Visa itself, up 11% year over year. More than half of that revenue was turned into net income, too; this is a (very) high-margin business.
It's also a fickle business in that it directly serves consumers and corporations that have lots of other options. That's why Visa makes a point of constantly innovating even when it seemingly doesn't need to. It even operates several different stand-alone innovation centers just so it's always able to offer exactly what its customers want at any given time wherever they may be.
For example, the company has figured out how to leverage blockchain technology to facilitate quick cross-border payments. Last quarter's total cross-border payments volume was up 16% on a constant-currency basis.
V revenue (TTM) data by YCharts. TTM = trailing 12 months.
And Visa's historical results confirm it's doing its job well at the same time that it's rolling out new products and services. As the chart above illustrates, the only time its quarterly top line failed to grow year over year in the past 15 years was the middle of 2020 through early 2021, when the pandemic was at its height. Beyond those unusual circumstances, Visa is a revenue-growth bulldozer. Ditto for profits.
