There are a lot of ways to build wealth. You can squirrel your savings under the mattress, invest in real estate, or buy bonds and bank CDs to generate interest income, to name a few ideas. But of all the investment vehicles available, the stock market has been the most consistent wealth creator over the long run…
Since 1980, the benchmark S&P 500 has delivered an average annual total return (including dividends) of better than 11%. Keep in mind that this figure takes into account Black Monday, the dot-com crash, the Great Recession, and the coronavirus crash.
Perhaps the best thing about the stock market is you don’t need to have the investing intellect of Warren Buffett to achieve financial independence. Simply buying game-changing businesses and holding onto them for long periods of time is the key that can allow the average investor to become a millionaire. It’s my belief that the following four stocks can help John and Jane Q. Investor reach this financial milestone.
First up is fintech stock Square (NYSE:SQ), which is leading the War on Cash and the digital payments revolution. Even though Square has rocketed higher since the coronavirus pandemic, cashless payment growth is still in the very early stages.
For roughly a decade, Square’s seller ecosystem has been its foundation. This is the operating segment that provides point-of-sale devices and analytics to help businesses succeed. Driven by merchant fees, the seller ecosystem has grown from $6.5 billion in gross payment volume (GPV) in 2012 to what’ll likely be well over $130 billion in 2021, based on the $33.1 billion in GPV traversing its network in Q1 2021.
What’s more, we’re seeing bigger businesses latch onto the seller ecosystem. In the first quarter, 61% of all GPV came from businesses with at least $125,000 in annualized GPV, compared to 52% in the comparable quarter two years earlier. Square isn’t just for small merchants anymore.
However, it’s digital peer-to-peer platform Cash App that should have your attention. Cash App’s monthly active user count more than quintupled to 36 million by the end of 2020, with gross profit per user clocking in at $41, compared to less than $5 in costs to attract each new user. Cash App gives Square a number of new ways to generate revenue (e.g., Bitcoin trading), and it’s quickly become the company’s leading generator of gross profit.
Innovative healthcare stocks are a good bet to make patient investors rich over the long run. With this in mind, there’s a very good chance that telemedicine kingpin Teladoc Health (NYSE:TDOC) can help the average investor in their quest to reach millionaire status.
If you think Teladoc was in the right place at the right time during the pandemic, you wouldn’t be wrong. Virtual visits on its platform catapulted from 4.14 million in 2019 to 10.59 million last year. But this is much more than just a pandemic play, as evidenced by the company’s 74% average annual sales growth between 2013 and 2019.
Telehealth services offer a number of sustainable advantages that’ll make it a mainstay in the U.S. treatment landscape. For one, virtual visits are considerably more convenient for patients than office visits. Conversely, it’s also easier for doctors to keep tabs on their sickest/chronically ill patients via virtual consultations. While this convenience won’t replace all medical visits, it does take a step forward in improving patient outcomes, which insurance companies are bound to appreciate (i.e., less money out of their pockets).
The Teladoc growth story also includes the cash-and-stock acquisition of Livongo Health in the fourth quarter of 2020. Livongo is a…
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