Episode 150: How Much Kevin O’Leary Says You Need to Retire — And What Would He Invest In?

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Think you’re saving enough for your Canadian retirement — or are you just chasing returns while missing the wealth-building moves that Canadians like Shark Tank’s Kevin O’Leary swear by?

For many aspiring high-net-worth Canadians and incorporated business owners, the drive to grow wealth often leads to chasing the next hot stock or investment trend. But as Kevin O’Leary reminds us, real financial freedom comes from discipline, strategy, and maximizing tax-sheltered opportunities that most overlook. In this episode, we break down the exact number O’Leary says you need to retire comfortably — and how he’d invest it to protect and grow wealth.

Whether you’re earning over $200K annually or just starting to scale your incorporated business, this conversation will challenge your assumptions. We dive deep into why RRSPs are still one of the most underused tools for wealth creation, who’s actually maxing out their contribution room, and how the wealthiest Canadians are using strategies rooted in long-term thinking — not hype-driven returns.

What you’ll learn:

• Learn how high-income earners and incorporated business owners can strategically use RRSPs to unlock long-term financial security.
• Discover why many Canadians are leaving hundreds of thousands in unused RRSP contribution room — and how to avoid making a big retirement planning miscue.
• Understand the costly habits of “late to the party return chasers” and how disciplined retirement planning with or without the RRSP can ensure you have the retirement income you’re striving for.

Hit play now to learn Kevin O’Leary’s retirement target, how he’d invest it, and how you can follow a smarter path to a “Mr. Wonderful” financial future.

Resources:

• Statistics Canada: Table 3 – Registered Retirement Savings Plan (RRSP) Contributions By Income Group
• If you want freedom, you need $5 million in the bank, Kevin O’Leary says – Financial Post
• Kevin O’ Leary Says If You Want Personal Freedom, You Need $5M — Not In Stocks Or Real Estate, But Liquid Cash And That’s ‘The Minimum’ – Benzinga
• 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.

Achieving financial independence requires smart planning, especially when it comes to growing your net worth and generating passive income. We explore conservative leverage strategies such as the Smith Maneuver to convert non-tax deductible interest on your primary mortgage to tax deductible interest as well as conservative leveraged life insurance strategies including immediate financing arrangements (IFA). For business owners, navigating the complexities of corporate structures, tax implications, and investment strategies can feel overwhelming. From understanding capital gains rules to leveraging life insurance for wealth optimization, the right approach can transform your financial future. By aligning your strategy with tax-efficient tools, you can unlock the full potential of your business and investments, ensuring sustainable growth and long-term independence.

Transcript:

How much do you need to gain financial freedom and what assets should that capital be invested in? Today, we’re gonna dig into one man’s opinion, who I’m sure you know. He’s been a pretty popular feature on the show, Shark Tank. You’ve seen him regularly on shows, unpacking the economy, markets, and everything in between. And if you’re following him on social media, you’ll notice that most of those interviews, he’s doing it in his pajama.

bottoms. Yes, it’s Kevin O’Leary and today we’re going to unpack a few of the comments that he’s made in recent years and he continues to repeatedly double down on in particular about what it’ll take in order for you to reach true financial freedom. So stick around. I’m going to unpack his wealth wisdom and I’m going to unpack what he’s been sharing to help you understand how this might be helpful in your own

financial planning journey. All right, here we go. All right there, my friends, Canadian wealth secret seekers. That’s right. You know, this caught my eye. I wish we had Kevin on the show with us here today, but really what we’re going to be talking about is what he shared multiple times. And, you know, up on the screen for those who are on YouTube, you can see the financial post article. This one was from actually Christmas Eve of 2024.

And it says, if you want financial freedom, you need five million in the bank, Kevin O’Leary says. He says, it’s the minimum and it’s very, very, very hard to get. Now that obviously the subtitle there doesn’t make you feel very good. But when you go on to read this article, basically what Kevin goes on to state is that you wanna make sure that you get yourself in a position

where you have enough money so that you can make the decisions you want to make and you get to do whatever it is you want with your time. Now, the part in the caveat that I think is really variable here is what is the amount? So he’s saying 5 million. And you know, if we back map this a little bit and you know, maybe we use like the Monte Carlo method or the 4 % rule and we say, okay, let if we take 4 % of 5 million, what is that? It’s about $200,000 per year.

Now for some people out there, that’s what your goal is, right? You might be going, you know what? I want 200,000. I want to live on 200,000. I want to make sure that my income is what I’m earning now or better when I hit this financial freedom sort of time in my life. I don’t know about you friends. I’ve mentioned it before. I’m not really looking for financial freedom just so I can sit around the house and read all day and do nothing. I want the option to do that.

but I certainly don’t wanna be just sitting around and feeling like, you know, now that I don’t have to work, I’m sort of stuck, you know, doing things that won’t cost any sort of money along the way. I think a lot of people can probably relate to that. And really in society, I would argue that most people want that now. And typically what they do is they end up feeding that part of their brain now. So they…

they put off, you know, the delayed gratification piece is sort of taken right off the shelf and they’re just getting to whatever it is they want now. And this really creates challenges later. means, you know, you end up having to work longer than maybe you want to, or you might have to live on less than what you may have wanted to into retirement. So it’s really about finding a balance here. And of course for wealth secret seekers out there like you,

you’re here listening so that you can try to figure out like, how do I get the best of everything? Right? I mean, it’s, it’s definitely easy to say, Hey, like cut out all the things that you don’t need to spend on, and just invest and you’ll eventually get there. That’s easy to say it’s rational, but it’s certainly not easy to do, especially if you want to make sure you’re enjoying your life now while you’re doing all of this hard work. So there’s definitely, you know, some give and take here. But

one of the pieces that I respect the most about this comment that he’s made, regardless of if your number’s five million or if you need two million, you know, for many Canadians, right? If you were to just go and look at whatever your expenses are today and what you might expect those expenses to be when you hit your financial freedom number or timeline, so to speak, and you back map from there, you can sort of get a sense as to like,

What are you going to need in order to make that work? So for Kevin, he’s saying 5 million. Uh, and the, the big pieces here that that might be 2 million for you. It might be 1 million for you, but the part that’s really important is that as you go on through this article, he’s saying he wants to make sure that this is not in stocks. It’s not in real estate. It is not in any risky assets. It is what he says is cold hard cash or it’s a liquid meaning

it’s in a high yield savings account or it’s in something that will not go down is not volatile. Now, while I’m not suggesting that people, you know, sort of stack all of this money up and you just keep it in all safe things until you hit that number before you start investing. What we can do is we can look at this and go, how do we do this in a way so that when we are ready to get or getting closer to that financial freedom part of our life,

that we have what we need in order to transition some or a good chunk of that, that bucket that you need to make sure that all of your required expenses, all of the income that you require is not going to be a wonder, right? There’s a lot of people out there and it’s hard to find any stats on this, but they say that, you know, if you have a pension, you live longer, right? I can’t really find much to sort of suggest that that’s actually a fact. However,

there is a lot that would say that you are definitely less stressed if you know that you can at least cover your basis, right? You don’t have to cut back on retirement income when you do these things. a few things that are troubling to me is that most people are out there and they are looking for again, the rates we’re chasing returns because why? Because we’re not investing enough. Okay. What’s troubling is only 21

point seven percent of Canadians contributed to an RRSP. I’m going to flip this up on the screen. We’ve got this big table here and I’ll leave it up for those who want to check it out on YouTube. You can see this table. It’s from Stats Canada and it’s saying basically less than 22 % of Canadians contributed to an RRSP. This is in 2022. This date is from now. Why might that be? Well, it’s understandable. There might be some people in lower tax brackets that maybe it doesn’t make sense for.

or maybe people that are feeling the squeeze. But as we move up brackets, what you’re gonna find that’s a little bit surprising is that even those who are in higher tax bracket, so let’s say even those who are in the 100 to $125,000 per year tax bracket, only 52 % of them in 2022 contributed to an RRSP. Now, you’ll know that I’m not all, you know, I’m not like the biggest fan of RRSP’s for

business owners, but I definitely am a fan of our recipes for those who are a T for employee. You’re getting this income anyway. So as you get up into these higher brackets and RSP is definitely something that you want to be considering. Now, some of you might say, okay, maybe the people in the 100 to 125 tax bracket, maybe they’re investing in other things. Sure. But like, let’s move up the brackets a little bit here for a second.

when we look at those who are earning between 150 and 200,000, that bracket is where like right in the middle of that bracket is where we can get our maximum contribution amount for an RSP and only 62.8 % of those earning between 150 and 200,000 are contributing to the RSP. That means just under 40 % are not. And for those who are,

only the median is only $12,000. So if the median is $12,000, that means that half of the people, so you know, 30 % of that bracket are, are contributing less than 12,000 and the other 30 % are contributing more than $12,000 while they have about 27 to $30,000 of available room. This is problematic. When we go higher,

We’re talking about people from 200 to $500,000 as you’ll see up on the screen here. You’re going to notice only 66 % contributed. So these are people who are in a very high tax bracket. They can get essentially half of the money back from the RSP if they were to contribute and they’re choosing not to. What this tells me is that we have a lot of Canadians out there that are utilizing a lot of their income. So again,

even if you’re a 200 to $500,000 T for earner, maybe you want to get into real estate. So I get it. I understand that, you know, you, you don’t want all your money, maybe locked up in the RSP. However, you’re going to get half of that amount back. So you put 30,000 in, you get 15,000 back. So what you now you have 30,000 in your RSP. You have the other 15 that you can put into whatever, whatever endeavors you want. So

My biggest concern out there when we look at data like this is that we actually have a huge funding issue, not just for RSPs. I’m using this data just for today’s discussion, but that we’re actually spending way too much money and we’re not saving nearly enough. All right, the number we like to think about is about 20 % of your income. Why? Because that also,

governs how much you’ll need for retirement. If you’re constantly used to saving 20 % every year, then now the amount you need in retirement is going to be substantially less, right? I’ve only need 80 % of what I’m earning today. Most pensions are gonna give you around 50 to 60 % of your current income. So if you do have a pension, that’s fine, but you’re still only at 50 to 60 % of the income that you are earning

in likely the year before you retire. This is a major issue if we don’t have any other type of savings or wealth planning in place. Now, when we look at this, what’s the big goal here? What’s the big takeaway? All right, Kevin O’Leary is saying that you don’t wanna be taking all of this stuff, keeping it in volatile assets. Why? Because one day you might be worth this much and the next day you might be worth a whole lot less.

what he wants and what he’s suggesting is that you need to make sure that you have assets that are in non volatile or uncorrelated assets. Now, what’s that for him? He’s saying cash. All right. To me, I think it’s a little extreme to have $5 million sitting in cash. However, what I typically do is I in the meantime, while I’m growing my portfolio, growing my pile over these next, don’t get me wrong. I would like to hit my financial freedom.

number within the next decade, I’m happy to continue working. So I don’t need to not work. So I have a long time horizon. The longer your time horizon is, the more open to investing in say, 100 % equities we might be or the more open we might be for volatile assets. But as you get closer within that 10 year runway of your financial freedom date,

that time where you want to make sure that you are good to go and that you’re gonna have at least a minimum amount of income plus what I call the gravy. This is all the other income that you could have. You wanna make sure that you are either protected because the pile’s large enough that if you experience volatility, maybe a 30 or 40 or even 50 % drop in the markets, that it’s not going to hurt your income and it’s not gonna hurt your financial future

because you’re taking money out. What I do instead is that I do a little bit of both as I’m on this journey. I’m actually taking money and I’m building up a permanent life insurance policy. It has high early cash value so I can continue investing in some of these longer term plays that do have risk, but they of course will have reward with them as well. By doing that,

throughout the next 10 to however many years I feel like I wanna continue earning an income because I enjoy doing it, I can then basically recycle this capital. So I’m sending money into my safe asset, I’m leveraging my safe asset in order to buy more risk on assets. And as more money comes back to me, either through cashflow, through selling of assets, or just through income,

I can pay down the leverage against my safe asset with the goal being that when I hit my financial future date, right? Whatever that date is for you, as I get closer to that date, I wanna be building my safe asset up. How do I do that? By building down or by knocking down leverage against that safe asset. Once again, I’m talking about a high early cash value policy.

We’re using whole life and we’re designing it in such a way so that I can keep as many of the dollars as I put into that policy whole so that I can leverage it into other assets. Now for incorporated business owners, you heard me talking a lot about our RRSPs. You might be thinking, shoot, I haven’t been contributing to our RRSPs. Well, let me tell you this. If you don’t need the money to come out of your corporation, then

keep it in the corporation and that’s where you want to be growing some of these assets. While it’s fine to contribute to an RRSP, you don’t want to necessarily be taking money out as a T for because just because you want to fill the RRSP. I’d rather save that room for a time where you need that tax refund and instead live to your means, utilize the money, however you choose through a salary or dividend, but

If you find that you’re creeping up that number, we want to make sure that we’re at least investing at least 20%. Of course, the higher your income, the higher that percentage should be. All right, so I’m going to pause for a second and we’re going to have some follow up episodes on this. want you to pause for a second and think the more income you earn, the more at risk you are to having lifestyle creep make it difficult for you when you do want to retire down the road. Why is that?

Well, because the bigger your income, the more unnecessary expenses you have in your life, but you’re used to having them. So your lifestyle creep has now brought these numbers up or brought these values up. And therefore it can be very difficult to sustain over the long term. If you’re only investing 20%, for example, of your assets.

So, or of your income, I should say. So for those business owners who have a lot of money being generated in the company, just remember that if that company isn’t gonna be able to run itself without you, you’re either stuck running that company for a very, very long time to sustain your lifestyle, or you need to make sure that you have a wealth plan in place so that you can live life the way you wanna live it now.

without putting yourself in a tough spot where you feel like you have to work into your seventies or until death in order to maintain the lifestyle that you’ve become accustomed to. So let’s make sure we get our wealth planning in place for that. So the big takeaway here that I’m hoping everyone’s taking on a Friday is that having yourself a plan to make sure that, Hey, when I’m far from my financial future or my financial freedom dates,

I can keep my money in risk on assets and not worry about things too much. But as we get closer, as we get to less than 10 years, and of course, as we get into less than five years, we don’t want to be resorting to the strategy of, shoot, I don’t have enough. So I’m going to actually put my money into more risk on assets. We want to do the opposite. We want to think about, okay, what do I need to make sure that I’m going to be able to live comfortably by the time I’m ready to start pulling a passive income?

whether you want to call it a pension, whether you want to call it retirement incomes, totally up to you. And then once you’ve hit that goal, then all of the additional assets, all the additional capital that you have, you can keep it in risk on. You can do whatever it is you want. Maybe you want to start a new business or do something with it, but we want to make sure that we’re at least taking care of those expenses monthly or annual so that…

you can sustain regardless of what happens to any other of your risk on assets that you take on. All right, my friends, hopefully you found some value in this episode. If you did, please do us a huge solid rate and review the podcast, giving us whatever star rating you think is appropriate and whatever feedback you can. We so appreciate you. Remember if you want to check out what phase of the financial freedom journey you are on,

head on over to Canadianwellsecrets.com forward slash discovery. And we’ll ask you a few questions. And of course, if it makes sense, we’ll give you that link so you can book a free discovery call. Canadianwellsecrets.com forward slash discovery. And for our incorporated business owners, head on over to Canadianwellsecrets.com forward slash masterclass. And you can learn more about what you might want to be doing with those extra retained earnings too.

Pay less tax over the short and the long term, and of course, create a financial future that you will be proud of. All right, my friends, we’ll see you next time. And just as a reminder, the content is for informational purposes only. You should not construe any such information or material as legal, tax, investment, financial, or other advice. And as a note,

Kyle, that’s me. I am a licensed life and accident and sickness insurance agent and VP of corporate wealth management with the Pancorp team. So head on over to Canadianwellsecrets.com forward slash discovery if you’re interested in booking a call today.

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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