You hit 40 and the cash questions begin speaking again. Youngsters value extra, time strikes quicker, and retirement stops feeling like a far-off hearsay. Averages don’t set your destiny, however they do provide you with a gut-check and a benchmark. The CRA’s Tax-Free Financial savings Account (TFSA) statistics for the 2023 contribution yr put the common TFSA truthful market worth for Canadians aged 40 to 44 at about $20,670, with common unused TFSA room close to $62,618.
In the meantime, the common Registered Retirement Financial savings Plan (RRSP) steadiness for Canadians aged 35 to 44 is at about $49,014. That hole issues, because the median displays “most individuals,” whereas the common will get pulled up by super-savers. So, how are you going to rise up to these super-saver ranges?
DOL
Dollarama (TSX:DOL) suits that funding profile higher than most individuals anticipate. It sells low-priced necessities and small “deal with your self” gadgets, and that blend tends to carry up when budgets really feel tight. When consumers commerce down, visitors usually will increase. It additionally advantages from scale, as it might unfold prices throughout a giant retailer base and maintain costs sharp.
It additionally retains a easy development lever working within the background: it opens shops. Extra shops imply extra comfort, extra transactions, and extra knowledge on what clients purchase. It leans into consumables, which pulls clients again continuously. That repeat behaviour makes income steadier than at retailers that rely on big-ticket splurges.
The market has rewarded that steadiness. Dollarama exhibits a roughly 43% acquire over the previous yr. That run tells you buyers nonetheless pay up for constant execution, particularly when the financial system feels uneven and shoppers chase worth. It additionally raises expectations, which issues for anybody shopping for right this moment.
Earnings assist
These expectations met sturdy numbers within the newest quarter. In fiscal 2026’s third quarter, Dollarama reported gross sales of $1.9 billion, up 22.2% yr over yr, and web earnings of $321.7 million. Diluted earnings per share (EPS) got here in at $1.17 versus $0.98 the yr earlier than. Comparable retailer gross sales in Canada rose 6%, pushed by extra transactions and an even bigger common basket. That mixture indicators demand, not simply retailer development.
It additionally leaned arduous into capital returns. Dollarama repurchased about 2.6 million shares for roughly $484.6 million in the course of the quarter. It additionally reported that administration lifted its annual comparable gross sales forecast, which suggests momentum can proceed. Past Canada, it owns a stake in Dollarcity and it now runs an Australian retailer The Reject Store, which may add runway if execution stays sharp, however it might additionally add prices and distractions.
Due to this fact, valuation nonetheless issues, particularly inside a TFSA the place you need long-term winners however you additionally need to keep away from paying any worth. Proper now, it holds a $54.7 billion market cap, whereas buying and selling at 42.6 occasions earnings. That a number of assumes continued supply. If inflation cools and consumers drift again to pricier retailers, development may cool. If competitors turns right into a worth struggle, margins may tighten. And if worldwide initiatives disappoint, the inventory may re-rate decrease quick.
Backside line
For a 40-year-old attempting to construct an even bigger TFSA and RRSP steadiness, Dollarama affords a clear, comprehensible path. It could possibly carry out throughout cycles, it might add shops, and it might assist per-share development with buybacks. It additionally carries actual dangers, led by valuation and the necessity to execute overseas whereas defending margins at residence. Dollarama provides you a confirmed compounding enterprise, so long as you retain your time horizon lengthy and your contributions regular.
