Episode 254: The Micro Habit That Can Build Wealth for Years You Need To Hear

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Are you spending too much time trying to optimize your money instead of making the moves that actually build wealth?

This episode is for the Canadian business owner who wants to be smarter with taxes, investing, and long-term planning—but also knows how easy it is to get stuck in analysis. Hosts, Jon Orr and Kyle Pearce unpack a powerful mindset shift for the year ahead: stop chasing every tiny optimization and focus on the habits and decisions that create real momentum. If you have ever wondered whether your financial strategy is actually helping—or just distracting you—this conversation will hit home.

• You’ll hear how to create one simple, repeatable money habit that can quietly build wealth over time.
• You’ll learn why increasing income and protecting your focus can matter more than endlessly tweaking tax and investment decisions.
• You’ll also get a practical lens for deciding when to keep managing things yourself and when it may be smarter to systematize or delegate.

Press play now to reset your financial focus for the next year and make the moves that matter most.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 
  

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

In this episode of Canadian Wealth Secrets, Jon Orr and Kyle Pearce unpack a practical wealth strategy for Canadian entrepreneur finance, showing why wealth building is not just about endless financial optimization, but about creating simple micro habits, improving cash flow, and staying focused on making more money. They explore how DIY investing, portfolio management, and tax planning can either support or distract from your bigger goals, especially when you are navigating business owner finances, personal vs corporate tax planning, and tax efficiency in Canada. The conversation also highlights the role of wealth management, systematizing wealth, passive investing, long-term investing, and tools like the Smith Manoeuvre as part of a smarter Canadian wealth plan. For listeners pursuing financial freedom Canada, financial independence Canada, and building long-term wealth Canada, this episode offers a clear framework for stronger financial habits, better income growth, more intentional corporate wealth planning, and sustainable wealth building strategies Canada designed for entrepreneurs who want to grow with clarity instead of getting lost in complexity.

Transcript:

Jon Orr: Okay. We’re going to answer just one question here today. You know, we’re ending quarter one — actually, literally today is the last day of quarter one. And you tend to think around this time about taxes, tax season, moves you’re making, structural moves. Sometimes your accountant is reaching out to you for information. But anyway, you’re forced — we are anyway — forced to think about what next year looks like. And that’s the prompt here today for both of us.

Jon Orr: Basically, now that either tax season is here, or it’s over, or you’re in the midst of it — it’s always around this time of year — what is the most important thing to consider moving ahead another year? So a year from now, what do you wish you had done, thought about, put into place, considered? What’s the most important thing to consider moving ahead one more year, Kyle?

Kyle Pearce: Well, folks know when you’ve been listening to the show, I’m a fact finder. I love digging and I love finding new things. I love learning. But one of the negatives for someone like myself is that the learning never stops. So it can be difficult when you find something that you want to do in terms of actually putting it into practice yourself and feeling confident enough to do so.

Kyle Pearce: So, you know, when we talk about this time of year and are there things we’re going to do a little bit differently? Some people might be looking and saying, I’m going to pay a little bit more in personal tax than I maybe anticipated or wanted to pay. And it’s like, what can I do differently? And I know for me, that’s something that I’m looking to take more action on.

Kyle Pearce: So we talk about the Smith Maneuver on this show all the time, right John? And ultimately, the first time I used what we call the Smith Maneuver, it actually wasn’t the actual Smith Maneuver. It was just an investment loan. Like I just took a chunk off my HELOC and chucked it into my investment account and used some strategies to trade and try to grow those dollars, but it wasn’t systematic. And I would say one of the biggest pieces that you and I have been contemplating is, as we go along here, what could we do to start systematizing something that’s gonna have a great impact over time without us having to think about it or make a big decision all at once?

Kyle Pearce: And that’s one of the things that I know I’ve done this year. I would say I probably took a page out of your book a little bit in terms of trying to make it something I can put into practice. I understand what it should and could do, and I don’t actually have to think about it anymore.

Jon Orr: So are you saying — maybe summarize in one sentence — what is your most important thing to consider moving ahead?

Kyle Pearce: I would say it’s figuring out a way to do something to help your situation. And I’m gonna talk specifically around wealth management — something you can do, a decision you can make, or something you can do now that will have a great impact over a longer period of time without you having to actually do anything along the way. So really systematizing what it is you’re going to do.

Kyle Pearce: In particular, what I did this year — which is different from what I had been doing last year — was that I had a mortgage renewal coming up. And some of you may remember if you’ve listened back to our Smith Maneuver podcast episodes, we’ve got some videos and a big blog post around the Smith Maneuver on the website. For a number of years, I was actually hindered from doing the Smith Maneuver because I had a very low fixed interest rate on my primary residence. So it actually wasn’t beneficial for me to continually pay additional dollars on my mortgage in order to borrow back and put into any type of investment.

Kyle Pearce: Now, mind you, I had HELOC room available. That’s why I would take a big old chunk off the HELOC and just chuck it in the market. I did not contribute any additional principal to my primary home. So what I did differently this year, when I had my refinance coming up — now that whether you do a fixed rate or a variable rate, when you locked in early during the COVID lows, that rate is very different now, but it’s a whole lot closer to what your HELOC rate would be. So now looking ahead, I was like, I could borrow some additional capital from my home now at refinance time.

Kyle Pearce: I put it to use in other aspects. We had some TFSA room that we could fill. I don’t want to take extra money out of my corporation to fill my TFSA because I’m getting taxed hard in order to get those dollars out and into the TFSA. So I refinanced out of my primary, filled up the TFSAs all the way to the top as best I could. And then I thought to myself, how do I feel about that now that this mortgage is higher?

Kyle Pearce: I thought, this is a perfect opportunity for me to do the Smith Maneuver. Now that my interest rate is a whole lot closer to my HELOC and I borrowed more capital again for investment purposes — I can’t write off the interest for my TFSA, which is why I added it to the principal balance of my primary home. And I’ve decided I’m going to do something that will make my life really easy and I know will produce longer term benefits.

Kyle Pearce: Which was: I’m going to double up my payment, stretch the mortgage to 30 years, and then double up on the payment. So I have the option to double up these payments every two weeks. And with the portion that I doubled up, I’m also going to re-borrow back from that home equity line because it’s going to grow — it’s re-advanceable and it’s a growing line. I’m going to take that money and have it automatically deposit into a very specific non-registered account. It can’t be a registered account — a non-registered personal account that I’m going to put into investments.

Kyle Pearce: And basically in my mind, I look at it and go, these are dollars that would have either went into the market in another place. Now I get to knock down that mortgage, I get to borrow the money back on my HELOC, I get to write off the interest on that HELOC, and I get to grow a very specific non-registered account. I’m keeping it separate so I can track it and so that I don’t get freaked out if the market goes down or anything like that. And now it’s just systematic.

Kyle Pearce: If I keep doing this, that 30-year mortgage should be paid off in about 13 years if I just follow this process. And if on average that big bucket grows at 9 or 10% per year on average, that big bucket’s going to be much, much higher than where that mortgage will be in 13 years. It should double about twice if we use the rule of 72. So if it’s $100,000, it should be $300,000 or more, and I’ve got 13 years left in the mortgage over here. It’s a huge win-win. And I don’t have to actually think about it. I did have to do a lot of thinking upfront.

Kyle Pearce: But I know that it’s gonna produce a nice tax refund for me at the end of the year because we do take a little more out of the corp now than we used to, because of the amount of money we’re paying in the higher tax rate. So we might as well utilize some of the strategies and the structures that are available to us on a set-and-forget basis.

Jon Orr: Right. I got two comments on what you just said. First comment — man, that was one long sentence.

Kyle Pearce: Yeah, it wasn’t short and sweet. I’m certainly not going to win the succinct award anytime soon.

Jon Orr: Kyle, how do we summarize that in one sentence? Okay, that’s pretty good. You went into some great detail, and I’m glad you went into that detail because it gives us a snapshot of what you did this year. And I think this leads me to the second comment. What you did is explained a great example of how you said, I am committed to finding a micro habit that I can stick with for a really long time that is automatically going to build my wealth. And I think if you had to recommend a move to someone, that should always be the move.

Jon Orr: What is the micro habit that you could be putting into place where it’s so easy for you? Yeah, there are some logistical pieces about moving money and doubling up this payment — like in your example using the Smith Maneuver — but it doesn’t have to be the Smith Maneuver. What is that micro habit? It might just mean you’re dollar cost averaging, it’s just easy for you to move the money, but you’ve committed to it. I think that’s the important part — here’s a habit that I will commit to for a long time. Like, define it.

Jon Orr: You were defining this like you’re stretching your mortgage out 30 years. You can imagine doing this for that many years because you know that the math works, but also that it works with your habits. Which is what we talk about here all the time on the show — yes, the math says one thing, but what do your emotions and habits say to do on the other side? And they have to line up both ways.

Jon Orr: So I think what you’re saying is, commit to whatever the micro habit is that will build your wealth moving forward in the next year. That’s what I would totally recommend as the most important thing to consider moving ahead for one more year.

Jon Orr: What I would also say — if you asked me that question, what is the most important thing that you want to consider moving ahead to the next year — I think we talked about this between you and me on side conversations or conversations we had at dinner or something like that. But basically, in a way, it comes down to thinking around philosophy, but also practicalness. And I could probably summarize this by saying, what’s the most important thing that you could do moving ahead in another year is just make more money.

Kyle Pearce: I love it.

Jon Orr: And I don’t want to feel like that’s just trivial, because what I’m really trying to say is that we spend a lot of time tinkering and optimizing. And that might be a good use of your time, but it might not be. What I mean by that is, if you think about and add up all the time you’re trying to put these little moves into place, these little key understandings — like you talked about a micro habit, it took you some time to learn about the micro habit and put it in place, great. But there are a lot of us out there tinkering in areas that down the road probably aren’t gonna matter that much. Especially if you are focused on where your strengths lie.

Jon Orr: So if you’re a business owner, you’re an investor, you’re in the process of making extra cashflow for yourself — sometimes just focusing there for the next year is gonna make a way bigger difference than trying to save or optimize in these little tax-efficient ways. And I guess the big way to say this is, you’re trying to optimize things that eventually are gonna be obsolete. What we want to think about is, if we just focus on earning more money this year in your business, or making, maybe it’s getting that next rental property because it’s cash flowing — it’s about generating that cashflow and making more money.

Jon Orr: Because then it doesn’t matter about the tax efficiencies that come down the road. Like you’re just going to be in a way better position because you generated more income. So it also might be like, maybe you’re in a steady income source, like a T4 income. Can you then — is it worth your while to spend time generating a second source of income versus trying to learn about optimizing your tax situation? It’s better to do the other thing. You’re going to have better long-term results out of it. I think that’s a really important idea to consider moving ahead into the next tax season.

Kyle Pearce: Well, it’s so funny because we talk about this quite a bit and I tend to be the one who goes down those rabbit holes. And I love the learning. Like I really enjoy it. So it’s something that I do on my spare time. But the reality, when it really comes down to it — especially when it comes to investing in the market — what I’ve recognized is even though I love the process, I love looking at the market and keeping a pulse, and you know, I watch the macro show by Hedgeye in the morning and night, I love that stuff.

Kyle Pearce: The reality is that most days that stuff actually distracts me from the money-making parts of our businesses. In both sides of our business, really, I go, holy smokes, that’s a lot of time. And in reality, we’ve got our wealth management team and that’s what they do all day. In some ways, I should be fully restricted from even doing any of that work anymore.

Kyle Pearce: So this is kind of a nice little epiphany for me, a reminder to someone like myself, but I think also to a lot of people listening who are also DIY investors. What I tend to see in the clients that we work with here at Canadian Wealth Secrets is a lot of people come in, and because they are DIY investors, or they want to be DIY investors, or they’re just fact finders like I am, they’re listening to the show. But at some stage in the game, at least a portion — you might want to start considering, is your own management of your portfolio taking you away from your money-making activities? And if so, maybe rethinking some of that.

Kyle Pearce: And that’s why you and I, John, have actually transitioned some of our portfolio over to the wealth management arm. And over time, not only is it gonna be good from a diversification standpoint — we’re still gonna manage our own, we have our own DIY portfolio over here, and we’re gonna be in the same public stock market mostly over here. But when you have another wealth management arm that has access to alternatives, access to different types of income funds and things along the way, the reality is unless you’re doing exactly what they’re doing, you’re getting more diversification, for better or for worse.

Kyle Pearce: Like maybe I’ll outperform them one year. Maybe they’ll outperform me down the road. I wanna be able to look at different investments and different buckets. And I’ve said it before — I’d rather be able to say, I’m glad I had a part of my assets in that, instead of going, man, I regret that I didn’t have all of my assets over here. Because we know that that’s not realistic. And not to mention that if you pick the wrong one or the wrong approach or the wrong bucket, you could be sitting there feeling regret.

Kyle Pearce: So this idea of, as we’re recording this — we’re ending Q1 and entering Q2 of 2026 — thinking about how do you deal with some of those micro habits? How do you put those into place? But then how do you make sure that you keep whatever it is you’re doing to generate income going, and stay focused on that? Because the reality is that’s probably the most important aspect of how you’ve generated your wealth.

Kyle Pearce: And we’ve talked about it before — all the research shows that very few people out there actually became wealthy by investing through the market unless it was over a 30 to 40 year period. But we’re talking about your working years. The reason you have the net worth you do is primarily because of the work that you do, whether you’re a T4 earner or whether you own a business. Those are the activities that you spend the most time doing. And those are the things that if you focused more of your time on them, you’ll probably be further ahead — and let somebody else sort of handle the rest.

Kyle Pearce: And that’s something that doesn’t come up in the fee discussions that people have, like does the MER make sense for that fund versus this fund. The thing that we don’t factor in is how many hours of your life are you committing to your DIY portfolio? And if it’s like 15 minutes a month, then hey, you’ve got a good return going on there, assuming you’re well diversified enough. But if you’re looking every day and spending time like I do every single day, my return on that potential improvement that I might make over an asset manager is probably actually putting me in the red, because my time should be worth more than nothing. And that’s something that can be really difficult to compute.

Jon Orr: For sure. All right. I think you summarized our two answers to the prompt — what is the most important thing to consider moving ahead for another year — very well. Make micro moves and think about optimizing your time in the right areas. If you want to take a look at some other suggestions on what moves you could be making, we’ve put together our framework around strengthening four key areas in terms of a healthy financial wealth planning system. If you have not yet already jumped over to our website at CanadianWealthSecrets.com forward slash pathways, fill out our quick assessment there on those four areas. We provide next steps, moves you can be making, suggestions going into the next year, and you’re going to get a custom report over there by filling that assessment out. So head on over to CanadianWealthSecrets.com forward slash pathways.

Kyle Pearce: And just keep in mind, we are an education-first firm, so we do not charge for any discovery calls or ongoing calls. We’re here to help educate you on what’s possible, what actions you might want to take, and which ones you might want to leave behind — because sometimes emotion trumps the rational numbers game of it all. So we’re here to help you know what it is that you have access to and to help you along that path.

Kyle Pearce: And if it makes sense for us to help you with any of those strategies, we’re here to help. We’re licensed here to help on the insurance side. We also have a wealth management side as well. If you’re looking for some assistance in the asset management side of things, maybe you’re a DIY investor looking to translate some of the time you’re spending on your portfolio into the real money-making activities of your business or your career. Reach on out over at CanadianWealthSecrets.com forward slash discovery and see if you might be a good fit to hop on a call with us today.

Jon Orr: Just a reminder, the content you heard here today is for informational purposes only. You should not consider this information as legal, tax, investment, or financial advice. Kyle Pearce is a licensed life and accident and sickness insurance agent and the president of corporate wealth management here at Canadian Wealth Secrets.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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