Have you ever wondered how easy or difficult?
it is to become a millionaire in Canada?
Well, ever since I was a kid.
I always want to become one.
and that’s why for this video,
I did some research on how many Canadian families
have a net worth of a million.
And more importantly,
I’ll also be sharing some insights on how you can
increase your chances of become one of them!
Before we get into it,
I just want to say that being a millionaire doesn’t mean
that you have to drive an expensive car and
eat at luxurious restaurants every single day.
You might see that on social media a lot
but I can tell you,
most millionaires aren’t like that.
many of them actually keep a very low profile.
They created wealth to have a better life
for themselves and their family,
but they don’t mindlessly spend their money.
They put their family in a better position
and enjoy their freedom.
And With that in mind let's get started!
First of all, let’s look at how to set the bar first.
What defines a millionaire?
To do that,
we have to calculate your net worth first.
To calculate your net worth you need
to know your assets and your liabilities.
There are a bunch of formulas to calculate it.
But overall I will simplify it to just
asset minus liabilities equals net worth.
The general definition of an asset is anything
you own that gives you a return –
such as your real estate, jewelry, or
stocks you own and don’t forget your cash as well.
Liabilities are things that is taking out from your pockets
such as loans like mortgages or car loan
Here is a simple example:
Let’s say the value of your house, car,
and investments add up to $300,000 and
you have $200,000 in outstanding debts.
In that case, your net worth is $100,000.
Now again in order for you to get into
the Forbes magazines,
the calculation is way more complicated than that
but I just want to give you a general idea.
Once you have a sense of
how to calculate your net worth,
let’s find out how many people in Canada
already have achieved this.
According to the Global Wealth Data,
there were around 1.7 millionaires
in Canada at the end of 2020.
Even with the covid 19 economic setbacks,
there are still 246,000 Canadian are new to the list.
Here are some more interesting numbers
to understand wealth in Canada better:
More than Two-thirds of the
Canadian millionaire are self-made.
Studies show in the conventional career group,
doctors and corporate managers have a
higher chance of becoming a millionaire.
And compare Canada to other countries,
We pretty much ranked in the Top 10 countries
that have the highest percentage of millionaires,
roughly 5.6%.
You might wonder what does it take to
become the top 1% of the pyramid.
And To my surprise,
did you know that there are
different age group to rank this.
For example
If you are 25 years old,
you are required to have more than $400,000
to rank it to top 1% wealth in Canada,
if you are 45 years old,
you are required to have $3.65 million
to claim you are the top 1%.
And if you are 65 years old,
you need $9.7 million to be top 1%
and lastly
If you are making $225,409 per year,
you are also qualified in the top 1% income in Canada.
side note,
compared to the United States,
you need to make $421,926 USD to
become the top 1% income bracket.
Alright, now we know the current stat,
the next question we want to find out is what can we do
to become a millionaire in Canada?
And There are a few things you can do:
The first thing you need to do is
understand where you are currently at.
How much do you earn? What are your expenses?
Which assets and liabilities do you currently have?
List them out and calculate your
current net worth to have a baseline.
Did you know,
According to TD Bank,
27% of Canadians are considered financially healthy,
31% of Canadians said they have more debt
than they are comfortable holding
And 32% of Canadians are unable to pay
all of their invoices on time.
Which group are you in right now?
once you understand it,
then we can move on to the second strategy.
The most important thing to become a millionaire is
to make wiser decisions with your money.
Most people just spend their money every month,
as a result, they never manage to accumulate wealth.
You have to do the opposite of
what the majority is doing.
We need our money to work for us.
The best way to do that is to invest your money
and to create multiple income streams.
The more popular investments are stock and real estate.
Unlike cryptocurrency,
it’s not going to make you rich in one day.
But it has a better structure,
and especially if you are a beginner
and do not have a lot of cash flow,
investing in ETF or mutual fund
will be a good place to start.
Remember,
time is your best ally to accumulate wealth.
Here is an example:
If you save about 10k a a year and invest it in
the stock market with an estimated return of 10%,
you’ll be a millionaire in 25 years
due to compound interest.
If you manage to save only 5k a year,
it will take you 32 years to reach a millionaire net worth.
Little longer but you still get there!
it’s wise to make sure your cashflow is staying aflot
and use it in investment with a decent return.
And besides the tangible asset,
it also is a good idea to invest in yourself.
Acquire new skills that increase your income potential.
Take a course or read a book.
Be open minded about new things and
more important once you absorb knowledge,
take action and apply to it.
we have to understand that
Right now we are in a skilled economy,
which means you can be profitable by a certain skillsetl
Did you know?
Majority of the new millionaires last year are
from tech start-ups and social media influencers.
Even if you work a full-time job you can pick a hobby
and turn it into a side income that
you can then use for investments.
Ideally,
you get to a point where the money
you earn is not directly tied to your time.
Instead, you get paid based on the value you provide.
This allows you to maximize your income.
If you get a chance to talk any millionaire,
and they will all tell you
the short cut to become a millionaire is
to have multiple income streams.
Instead of just having a job as your ONLY income stream,
you have three or four sources of money.
For example, rental incomes, investment incomes,
income from your content like your social media,
royalties from your books.
And more importantly your business income.
Now i want to say that,
This isn’t for everyone but the way that most likely
to get you one million dollar
is having your own busienss
That’s because once you get the ball rolling
the amount of money you can make is uncapped.
And specially being a business owner In Canada,
there are alot of tax advantage and protection
Plus, once you have a system in place to automated,
and you have a team to scale things,
you are making money and
you don’t have to be physically present.
Running a business isn’t easy,
many things can go wrong and
most people aren’t designed to be entrepreneurs.
But for those who make it work,
it’s bound to get them to the desired net worth.
Of course, none of these are easy.
But just like many great things in this world.
It takes both time and effort to achieve it.
And I am sure if you stick to the plan,
one day you will be in the top 10% of the wealth pyramid!
Alright, thanks for watching this!
I hope you enjoy this video!
If you like me to share more about
retirement, wealth or insurance in canada,
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There will be a new video every Sunday!
This is Thomas
And I will see you in the next video!