When most people think of being “rich,” they picture a high salary, a big house and luxury cars. But real wealth isn’t just about how much money you make — it’s about how much you keep, grow and use to create financial independence.
Being rich in Canada isn’t just about hitting a certain income level either. True wealth comes from financial freedom — when your investments and passive income cover your living expenses, meaning you don’t have to rely on a job to maintain your lifestyle — whatever that looks like for you.
And for me, and many other Canadians, that’s the real goal: Having money work for you instead. Here's a snapshot of income and net worth thresholds across different percentiles:
Canadian Income Thresholds1: What does Canada's 1% look like?
Canadian Net Worth Thresholds2
Related read: Best net worth trackers in Canada
So real wealth really isn’t measured by a paycheque. It’s measured by financial independence. That’s when your money is working for you, covering your living expenses without you having to clock in every day. At that point, work actually becomes a choice, not a necessity.
And let’s be real, that’s the dream.
But here’s the thing: Earning a lot of money doesn’t automatically make you wealthy. Plenty of high-income earners still live paycheque to paycheque because they’re not managing or investing their money properly.
The secret isn’t just making more. It’s keeping more, growing it and using it to create sustainable passive income streams that pay you whether you work or not.
So, how do you get rich?
Set clear financial goals: What does wealth mean to you?
Forget the idea that you need to be a multi-millionaire to be considered “rich.”
The real goal?
Financial independence — when your investments are pulling in enough passive income to cover your living expenses. At that point, work isn’t something you have to do. It’s something you choose to do. And that’s a game-changer.
Related read: Financial Independence Retire Early (FIRE) movement
So, what’s the magic number?
A common benchmark is $1 million in investments. Why? Because using the 4% rule (aka the “safe withdrawal rate”), that translates to $40,000 per year in passive income. Want more? $2 million = $80,000/year. Scale it up or down depending on your lifestyle and what financial freedom looks like for you.
Here’s how the numbers break down:
The power of compounding: Why starting early matters
The earlier you start investing, the easier it is to build wealth. Thanks to compound growth, even small investments snowball over time.
Let’s look at two examples:
Robert (starts investing at 30) vs. Adam (starts investing at 25)
Both Adam and Robert decide to invest $500/month into a tax-free investment account (TFSA/RRSP) with an average 7% annual return. The only difference? Adam starts at 25, while Robert waits until 30.
Here’s how their wealth grows by the time they hit 65:
The result?
Adam ends up with over $400,000 more just because he started five years earlier, even though he only contributed $30,000 more.
And that is the magic of compounding interest3. Your investments start making money on both your contributions and the returns you’ve already earned.
But please, I urge you to start investing as soon as possible. If you don’t it could cost you hundreds of thousands of dollars, if not more.
The 3 golden rules of getting rich in Canada
Your income is the foundation of your wealth. The more you bring in, the more you can save, invest and ultimately use to buy back your time.
How to increase your income in Canada:
- Negotiate your salary: A job switch or a well-timed raise can add thousands to your annual earnings. Don't leave money on the table.
- Learn high-income skills: Fields like coding, digital marketing, sales and consulting pay well and offer serious earning potential.
- Start a side hustle: Whether it’s freelancing, e-commerce or content creation, an extra income stream can be a game-changer.
- Build passive income streams: Think dividend stocks, rental properties or online businesses — ways to make money without trading time for it.
Why this matters:
Let’s say you boost your income by just $500/month and invest it. With an average 7% return, that could grow into $600K+ in 30 years. That’s a huge step toward financial freedom, all from making a little extra cash each month and putting it to work.
It’s not just about how much you make. It’s about how much you keep. You don’t have to go full minimalist, but keeping your biggest expenses in check is what really moves the needle.
How to save more money in Canada:
- Cut unnecessary expenses: Track your spending and cut anything that doesn’t actually add value to your life.
- Reduce housing costs: House hacking (renting out part of your home) or moving to a lower-cost area can free up a lot of cash.
- Drive smart: A reliable used car is often the smarter financial move over a brand-new one (bye-bye, depreciation).
- Avoid lifestyle creep: Just because you can afford something doesn’t mean you should buy it. Keep your spending aligned with your long-term goals.
- Use a High-Interest Savings Account (HISA): Instead of letting extra cash sit in a regular chequing account earning next to nothing, park it in a HISA where it can grow with 2% to 3% interest while staying accessible.
Related read: Best High Interest Savings Accounts
Why this matters:
Saving just $250/month instead of spending it may not seem like a big deal, but invested wisely, that could grow to $300K+ in 30 years.
Saving money is great, but investing is what actually builds wealth. If you leave your cash sitting in a regular savings account, inflation will quietly chip away at its value. Instead, put your money to work so it grows over time.
How to invest for wealth in Canada:
- Use tax-advantaged accounts: Max out your RRSP, TFSA and FHSA to shield your investments from taxes and grow your money faster.
- Buy index ETFs: Low-cost index funds (like VFV, XIC, or XEQT) make investing easy, diversified, and effective — no stock-picking stress required. Check out our best ETFs for Canadian investors.
- Own income-generating assets: Rental properties, dividend stocks and online businesses can bring in passive cash flow to supplement your income.
- Invest consistently: Use dollar-cost averaging (investing a set amount regularly) to smooth out market ups and downs. Timing the market is overrated.
Why this matters:
Investing just $500/month into an index fund with a 7% average return could grow into $1M+ over 35 years. That’s the power of compounding — letting your money snowball while you focus on living your life. (Remember Robert and Adam!)
Start today with a robo advisor and set up regular contributions to reach your goal
Summary of the 3 golden rules
- Earn more: Boost your income through high-paying skills, side hustles, and career growth.
- Spend less: Keep your biggest expenses in check and avoid lifestyle inflation.
- Invest the rest: Use tax-advantaged accounts and let compounding do the heavy lifting.
Stick to this framework, and you won’t just be rich, you’ll be financially free.
How to get rich fast in Canada: Separating fact from fiction
Everyone wants to build wealth quickly, but the truth is there are no shortcuts to lasting financial success. If someone promises you overnight riches, they’re either lying or trying to sell you something.
That being said, there are faster and slower paths to getting rich. The key is knowing what actually works and what’s just hype.
What doesn’t work: Get-rich-quick myths
- High-risk trading: Crypto, penny stocks and options trading can make some people rich, but most lose money trying to time the market. Even professional traders struggle to consistently beat index funds.
- Multi-level marketing: If you have to recruit others to “start a business,” you’re likely in a pyramid scheme. The vast majority of people lose money in MLMs, not make it.
- Passive income scams: If something promises money with zero effort, it’s probably a scam. Real passive income takes upfront work, whether it’s investing, starting a business or creating assets that pay over time.
- Day trading and gambling strategies: If someone actually had a system that wins every time, they wouldn’t be selling you a course, they’d just use it themselves.
What actually works: Smart wealth-building strategies
- Make more money: Increase your income through career growth, high-paying skills, or side hustles. More money = more to invest.
- Invest aggressively and consistently: Low-cost index ETFs (VFV, XEQT, XIC) grow your wealth over time. A 7% return can double your money every ~10 years.
- Own appreciating assets: Stocks, real estate and businesses create wealth, while liabilities (new cars, consumer debt) drain it.
- Start early and stay disciplined: Thanks to compound interest, investing $1,000 at 25 is worth more than investing $5,000 at 40. Time is your biggest asset.
- Live below your means: If you spend everything you earn, you’ll never get ahead. Keeping your cost of living low while increasing income is the real wealth hack.
How fast can you get rich in Canada?
Your timeline depends on how much you save and invest. Here’s a rough breakdown of how long it takes to hit one million dollars, assuming a 7% return:
Want to get rich faster? The biggest accelerators are
- Earning more: Increase your salary, start a side hustle or build a business.
- Spending less: Avoid lifestyle creep and optimize major expenses.
- Investing smarter: Keep fees low, invest in assets that grow and use tax-advantaged accounts like TFSAs, RRSPs and FHSAs.
At the end of the day, wealth isn’t built overnight but with the right strategy, it’s inevitable.
How to get rich in real estate in Canada
Real estate has created more millionaires than almost any other asset class, and in Canada, it can be a powerful wealth-building tool, if you do it right.
While skyrocketing home prices have made it harder for first-time buyers, there are still smart strategies to build wealth through real estate, even if you’re starting with limited capital.
House hacking: Lower your housing costs while building equity
Housing is the biggest expense for most Canadians, but what if you could live for free or at least drastically reduce your costs? That’s where house hacking comes in.
- Rent out part of your home: Buy a property with a basement suite or extra unit and rent it out to cover part (or all) of your mortgage.
- Get roommates: A simple but effective way to cut living costs.
- Short-term rentals (Airbnb): If allowed in your area, renting a spare room or unit short-term can bring in extra cash.
Example: If your mortgage is $2,500/month and you rent out a basement apartment for $1,500/month, your housing cost drops to just $1,000/month, or even less if you have multiple tenants.
Buying rental properties: Cash flow and long-term wealth
Rental properties can generate monthly income while appreciating in value over time. However, it’s not just about buying any property. You need the right location, cash flow and strategy.
- Look for cash-flowing properties: Your rental income should ideally cover all expenses (mortgage, taxes, maintenance) and still leave some profit.
- Choose high-demand areas: University towns, growing cities and job hubs are ideal for rental demand.
- Leverage smart financing: Use a 20% down payment to avoid CMHC fees and improve cash flow.
Example:
- You buy a duplex for $500,000 with a 20% down payment ($100K).
- Each unit rents for $1,800/month, generating $3,600/month in total income.
- After expenses (mortgage, taxes, maintenance), you net $500 to $1,000/month in positive cash flow (assuming a $5 interest rate).
- Over time, your tenants pay off your mortgage while your property appreciates.
REITs: Invest in real estate without owning property
Not ready to buy a physical property? Real Estate Investment Trusts (REITs) allow you to invest in real estate without the hassle of being a landlord.
- Passive income: Many REITs pay monthly dividends just like rental income.
- Diversification: Own a slice of office buildings, apartment complexes and commercial properties.
- Lower barrier to entry: Invest with as little as $50 to $100 instead of needing a down payment.
Examples of the best REITs in Canada:
- VNQ (U.S. real estate exposure)
- XRE (Canadian real estate ETF)
- RioCan (REI.UN) (Owns shopping centers & mixed-use properties)
The Smith Manoeuvre: Turning your mortgage into a tax deduction
In the US, mortgage interest is tax-deductible, but in Canada, it’s not by default. However, with the Smith Manoeuvre, you can convert mortgage debt into tax-deductible investment debt.
How it works:
- Borrow against your home’s equity.
- Invest that money into stocks, ETFs or REITs.
- The interest on that loan becomes tax-deductible.
- Over time, your investments grow, and you pay down your mortgage with investment gains.
This strategy accelerates wealth-building by using your home as an asset, not just an expense.
Best investing platforms for Canadians
If you want to grow your wealth, a low-fee investing platform is key. High fees eat into returns.
- Best for DIY investors: Questrade: Now offering commission-free trading stock and ETF trading, great for RRSPs & TFSAs.
- Best for hands-off investing: Wealthsimple Trade: No commission fees, very beginner-friendly and supports fractional shares.
- Best for robo-advisors: Justwealth and Moka: Justwealth offers automated portfolios, while Moka rounds up spare change and invests it.
Pro Tip: Use a TFSA or RRSP for tax-free or tax-deferred growth.
Best credit cards for cash back and rewards
A cash-back credit card lets you earn money back on your everyday spending. Just make sure to pay off your balance in full each month to avoid interest charges.
Pro Tip: Put all your recurring bills and everyday purchases on a cash-back card, then invest the rewards instead of spending them.
Pro Tip: Put recurring bills on a cash-back card and invest the rewards.
Best budgeting and money-tracking apps
Tracking your spending and optimizing your budget helps you save more, invest smarter, and reach your financial goals faster. Here are the top budgeting apps to help automate the process.
| Budgeting app | Description | Get started |
|---|---|---|
| Best overall: YNAB (You Need a Budget): | Syncs with bank accounts, focuses on proactive budgeting, and helps break the paycheque-to-paycheque cycle. | Start your free trial |
| Best for linking all accounts: Monarch Money | Connects to 11,000+ banks, credit cards and investment accounts, with customizable categories and shared budgeting for couples or roommates. | Visit Monarch Money |
| Best for forecasting and long-term planning: PocketSmith | Offers 30-year financial forecasts, tracks multiple currencies, and is great for major life event planning. | Visit PocketSmith |
| Best all-in-one finance app: KOHO | Combines budgeting, savings, and a prepaid Visa card with cashback. Includes roundup savings and no monthly fees with the KOHO Essential Plan. | Visit KOHO |
Pro Tip: Automate tracking with an app to see where your money is going, cut unnecessary spending and invest the difference.
The bottom line: Your path to wealth starts today
Getting rich in Canada isn’t about luck, it’s about having a plan and sticking to it. The people who build wealth aren’t necessarily the ones with the highest salaries; they’re the ones who manage, invest and grow their money consistently over time.
If you want to achieve financial freedom, focus on these three core principles:
- Earn more: Negotiate your salary, develop high-income skills and create multiple income streams. Side hustles, freelancing and passive income sources can help you build wealth faster.
- Spend less: Cut unnecessary expenses and avoid lifestyle inflation. Optimizing major costs like housing, transportation, and food frees up more money for investing.
- Invest the rest: Use TFSAs, RRSPs and FHSAs for tax-efficient investing. Stick to low-cost index ETFs, dividend stocks and real estate for long-term growth.
The power of taking action today
The best time to start building wealth was yesterday. The second-best time is right now. Whether you’re starting with $50, $500 or $5,000, the key is to just start.
- Step 1 – Open a TFSA or RRSP and deposit your first investment.
- Step 2 – Choose an index ETF (like VEQT) and commit to investing regularly.
- Step 3 – Automate your savings and let compound growth do the rest.
The longer you wait, the harder it becomes to catch up. But if you start today, your future self will thank you.
Wealth isn’t just for the top 1%. It’s for anyone willing to be consistent, disciplined and strategic.
Now it’s up to you. What’s your first step?
Noel Moffatt is a Canadian fintech expert with a passion for simplifying personal finance. Based in St. John’s, NL, he draws on his background in finance, SEO, and writing to deliver clear explanations and actionable advice. Noel is dedicated to equipping readers with the knowledge and tools they need to make informed financial decisions, striving to make personal finance more accessible and understandable through his in-depth articles and reviews.
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