Transform Your TFSA Into a Money-Making Machine With Just $15,000

A $15,000 investment can feel modest, but inside a Tax-Free Savings Account (TFSA) it can start a real snowball. The account shields your gains from tax, so every dividend and every bit of growth stays in the machine. If you reinvest the distributions, you buy more shares, and those extra shares can pay you more next time. Add even small top-ups over time and the compounding can surprise you.

The key is picking a business that can keep paying through calm markets and messy ones. Time and discipline matter more than perfect timing. So today, let’s look at one dividend stock creating that perfect storm.

POW

Power Corporation of Canada (TSX:POW) fits that job as it acts like a financial-services switchboard for Canada. It holds major ownership stakes in Great-West Lifeco and IGM Financial, and it also owns a stake in Groupe Bruxelles Lambert. It backs growth platforms too, including Wealthsimple, so you get both mature cash generators and newer wealth tech under one roof.

That blend matters heading into 2026 as investors still care about cash flow and durability. Power earns through insurance, retirement, and wealth management businesses that Canadians and employers keep using, even when confidence dips. When markets rally, its asset managers tend to benefit. When markets wobble, its scale and diversification can cushion the ride. You don’t buy it for excitement. You buy it for resilience and steady compounding.

The dividend stock has also shown that compounding in recent results. Power reports total shareholder returns with dividends reinvested, and it posted a one-year annualized return of 58% and a five-year return of 128% at writing. That stretch looks unusually strong. You should not expect the same pace every year, but it does show what can happen when financials catch a tailwind.

Earnings support

Now to the earnings that set the tone for 2026. In the third quarter of 2025, Power reported net earnings from continuing operations attributable to participating shareholders of $703 million, or $1.10 per share. It also reported adjusted net earnings from continuing operations of $863 million, or $1.35 per share. Those figures tell you the core engine kept humming, not just the market mood.

Power also tracks value per share, which matters for a holding company. At Sept. 30, 2025, it reported adjusted net asset value per share of $72.24, up 19.5% from Dec. 31, 2024, and book value per share of $36.74, up 3.3% over the same span. If those lines keep trending higher in 2026, long-term holders usually see it in the share price sooner or later.

For 2026, the outlook comes down to three levers: earnings quality, value per share, and the cash return to shareholders. Wealthsimple adds a growth angle, since it served three million Canadians and held over $100 billion in assets under administration as of October 2025. Meanwhile, market data shows Power trades around 14.6 times earnings at writing, with a forward dividend of about $2.45 per share, or roughly a 3.5% yield. Those inputs can support a patient TFSA plan, even if markets cool.

Bottom line

So why can this one stock help turn $15,000 into a TFSA money machine? Because it can pay you to wait while it compounds in the background. A roughly 3.5% yield can feed fresh cash into your TFSA each year, and reinvestment can steadily build your share count. In fact, here’s what that $15,000 can bring in on the TSX today.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTPOW$69.35216$2.45$529.20Quarterly$14,979.60

In 2026, investors should watch for a slide in markets that hurts fee income, for surprises in insurance results, and for any shift in payout policy. If you can hold through noise, Power can turn patience into progress.

The post Transform Your TFSA Into a Money-Making Machine With Just $15,000 appeared first on The Motley Fool Canada.

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More reading

• 3 Canadian Dividend Knights to Add to Your 2026 TFSA
• TFSA: How Beginners Can Create a Passive-Income Portfolio
• 1 Canadian Dividend I’d Depend on for a Decade
• 3 Must-Have Blue-Chip Stocks for Canadian Investors
• Start 2026 Strong: 3 Canadian Dividend Stocks Built for Steady Cash Flow

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.