How to become a millionaire in Canada: Kevin O’Leary’s simple formula can get you there — even on a $65,000 annual income. Here’s his ‘magic method.’

You’re making $65,000 a year and wondering if you’ll ever see seven figures in your bank account. According to Dragon’s Den investor Kevin O’Leary, not only is it possible – it’s practically guaranteed if you follow his simple formula.

O’Leary shared his wealth-building philosophy on X, delivering the same advice he gave his own children: save, invest and let compound interest work its magic. His approach strips away intimidating complexity and focuses on three core principles that anyone can follow, regardless of their income level.

But is it really that simple?

O’Leary: Save first, spend later

The foundation of O’Leary’s strategy revolves around one non-negotiable rule: Save before you spend. “Don’t spend it. Save it. Invest it. Let it compound,” he emphasized in a video message.

Why does O’Leary prioritize saving over spending? The answer lies in the power of compound interest and market growth. He points to historical market returns of 8% to 10% annually, which means your money grows exponentially over time. Every dollar you invest today becomes significantly more valuable decades down the road.

O’Leary’s magic number is 15%. “Take 15% of every paycheck, I don’t care how big it is. Or any gift Granny gives you. Or anything you get in a side hustle, and invest it,” he advises. This consistent percentage applies to all income sources, ensuring that your wealth-building efforts accelerate as your earning power increases.

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Balancing present needs with future wealth

Setting aside 15% of your income might seem daunting, especially when you’re juggling rent, groceries and other essential expenses. The key is viewing this percentage not as optional spending money, but as a non-negotiable bill you pay to your future self.

Start by creating a budget that prioritizes your investment contribution right after essential expenses like housing, food, transportation and minimum debt payments are taken care of. Consider this your “wealth tax” — a mandatory payment that builds wealth as opposed to depleting it.

If a significant investment feels impossible, begin with whatever percentage you can manage consistently. Even 5% or 10% creates momentum and sets the habit. Increase the percentage as you pay down debt, receive raises or find ways to reduce other expenses.

Canadian retirement plans — RRSP v. TFSA

Canada’s Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) are both powerful savings tools. The best strategy for you may be to use one or a combination of both.

Here’s a relatively painless way to start:

1. Take advantage of an employer match. If your employer offers a Group RRSP with matching contributions, this is your first step. It’s essentially free money that offers the highest-return “investment” you can make. Many employers will match your contribution dollar-for-dollar up to a specific percentage of your salary, for example, 3%. When you contribute just enough to get the full match, you could instantly double your savings.

2. Focus on the TFSA. If your employer doesn’t offer a match, or once you’ve contributed enough to get the maximum match, direct your savings to a TFSA. A TFSA allows your investments to grow completely tax-free — you can withdraw the funds at any time, for any purpose, without penalty or tax. This makes it ideal for a down payment on a home, a vehicle or to stash for an emergency fund.

3. Move to the RRSP. Once your TFSA is maxed out for the year, focus on contributing to an RRSP. An RRSP contribution is tax-deductible, so it reduces the income tax you owe for the year, giving you a tax refund that you can then use to contribute even more.

From there, take a small portion of your next raise — or more — and add it to your contribution. Do the same with each raise that follows until you’re saving a total of 15% or more. You’ll barely notice the difference in your paycheque, but your future self will thank you for the slow, steady climb.

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Time is your biggest asset

The earlier you start investing, the more dramatic your results become. This is where compound interest truly shines, turning modest contributions into substantial wealth over decades.

Consider Sarah, who starts investing 15% of her $65,000 salary at age 25. She contributes $9,750 annually ($812.50 monthly) to diversified index funds, earning an average 9% return. By age 65, her investments will have grown to approximately $3,428,000 — despite contributing only $390,000 of her own money over 40 years.

Compare that to Michael, who waits until age 35 to start the same investment strategy. His final balance at 65 would be around $1,382,900, despite contributing $292,500. Sarah’s 10-year head start resulted in about $2,045,000 more retirement savings, even though she only contributed an additional $97,500 of her own money.

This dramatic difference illustrates why O’Leary reckons you start saving immediately, regardless of age or income level. Time multiplies money in ways that higher salaries alone can’t match. Remember: It’s never too early — or too late — to start saving.

The power of cutting unnecessary spending

O’Leary’s wealth building philosophy includes one crucial caveat: “Just don’t buy crap you don’t need.” He’s particularly vocal about small daily expenses that seem insignificant but add up to substantial amounts over time. But you don’t have to live like a hermit. The goal is distinguishing between purchases that genuinely enhance your life and those that provide momentary satisfaction. Create a “want versus need” filter for discretionary spending.

Ask yourself: Will this sweater matter to me in five years, or will investing this money instead set me up for financial freedom?

Sources

1. X: @kevinolearytv (July 14, 2025)