$100K Starter Kit: 3 Stocks to Become a Millionaire by 2034

Stocks to buy

Investing legend Peter Lynch coined the term “10-bagger.” That is a stock that grows to 10 times the value of its initial investment. He knows a thing or two about hitting home runs with stocks.

During his time as Fidelity Magellan’s money manager, he took the fund from $20 million in assets under management (AUM) in 1977 to $14 billion AUM in 1990 when he retired for a 29% compounded annual growth rate. In other words, if you put $10,000 into the fund and never added another dollar, you would have $280,000 13 years later.

Lynch bought more than 100 ten-baggers while at Magellan, including Ford (NYSE:F), Philip Morris International (NYSE:PM) and General Electric (NYSE:GE). You don’t need that many to retire wealthy. You just need a couple of those stocks to become a millionaire, even if some of your investments completely strike out and go to zero.

Here are 3 stocks to become a millionaire that could turn $100,000 into $1 million in 10 years.

Joby Aviation (JOBY)

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It’s not every day you have the chance to get in on the ground floor of a completely new industry. Joby Aviation (NYSE:JOBY) offers that opportunity as it helps create the electric vertical takeoff and landing (eVTOL) industry. While there is obviously risk involved in developing something out brand new, Joby is one that can pull it off.

The company was the first eVTOL company to complete the Federal Aviation Administration’s (FAA) third phase of a five-phase regulatory process. Once it completes all five phases, Joby can launch its commercial robotaxi business. It is targeting a 2025 launch date and, so far, is on schedule.

Joby has delivered one of its eVTOL aircraft to the U.S. Air Force for testing to date and just expanded its partnership to make it four planes it will deliver in total. Joby is also working with NASA on air traffic simulations out of the Dulles-Fort Worth area. Flying cars will be a new challenge for air traffic controllers. New York City will also electrify its existing helipads to accommodate Joby’s flights.

Although Joby Aviation is essentially a pre-revenue company, the eVTOL leader is counting down to launch. That could see its stock rocket to new heights very quickly and take a $100,000 investment to $1 million in 10 years, if not sooner.

Ulta Beauty (ULTA)

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Personal care and cosmetics retailer Ulta Beauty (NASDAQ:ULTA) is the second stock to help you become a millionaire. It is the largest specialty beauty retailer in the U.S., with 1,385 stores in all 50 states. ULTA stock is also a cash-generating machine.

Over the past decade, the beauty company has grown its free cash flow (FCF) at a 26% compounded annual rate. It uses that money to return value to shareholders by buying back generous amounts of company stock. Last year it bought back 2.2 million shares worth $1 billion. Since 2014, Ulta Beauty has repurchased $5.8 billion worth of stock, while also investing in growing its business.

There is a certain recession resistance built into its business model, too, making it a perfect all-weather stock. Leonard Lauder of Estee Lauder (NYSE:EL) coined the phrase “lipstick effect,” which says during economic hard times, cash-strapped consumers turn to affordable luxury products like lipstick and makeup. Because they can’t make large purchases, they splurge on small indulgences like lipstick.

That helps explain why, since Ulta Beauty stock’s 2007 initial public offering, it has generated 1,278% returns for investors versus a 236% total return for the S&P 500. Look for this beauty queen to keep churning out excess returns for the next 10 years and beyond.

Rocket Lab USA (RKLB)

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The third stock to become a millionaire is satellite launch leader Rocket Lab USA (NASDAQ:RKLB). The company is the second most successful space venture after SpaceX. It might not be as showy as SpaceX, but Rocket Lab regularly launches rockets into space to put satellites into orbit. In March, it launched its 45th Electron rocket from its New Zealand launch pad making 181 satellites it has put into space so far.

Later this month Rocket Lab will launch two more satellites, one an Earth observation satellite for Korea, and the other as part of NASA’s Advanced Composite Solar Sail System.

Rocket Lab was also just awarded a $14.5 million contract from the U.S. Space Force for its space test program S30. It will be Rocket Lab’s third such mission for the agency and secures the company as the leading small launch vehicle partner with the Defense Dept.

To make its services even more valuable, Rocket Lab is developing its next-generation rocket, the Neutron. It will be a bigger, heavier rocket capable of constellation deployment, cargo resupply and interplanetary missions. And stealing a page from SpaceX’s playbook, Rocket Lab is undergoing testing of a reusable launch rocket. If successful, it should dramatically lower costs.

At less than $4 a share, Rocket Lab stock could easily launch itself into the stratosphere.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

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