Episode 202: I’m Earning Six Figures… So Why Don’t I Feel Wealthy?

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What if you’re earning over $300K a year, saving diligently, and still feel like your wealth plan isn’t enough?

That’s exactly where Roman found himself — solid income, strong net worth, and a nearly paid-off home, yet constant doubt about whether he’s truly on track for financial freedom. If you’ve ever wondered whether you’re missing something in your plan, or questioned if leverage could accelerate your journey, this episode is for you. Kyle Pearce breaks down how to think clearly about wealth-building beyond accumulation, how to prepare mentally for the decumulation years, and how to use (or avoid) leverage the smart way.

You’ll learn:

• Why high earners often feel financial uncertainty despite impressive balance sheets.
• How to model your future wealth with realistic returns so you know when “enough” is actually enough.
• A framework for using leverage confidently—without letting risk or emotion derail your strategy.

Press play to discover how to turn your strong income and savings habits into a clear, confident path toward long-term financial freedom.

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
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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.

Building long-term wealth in Canada starts with a clear financial vision and a strategic approach to both personal and corporate planning. At Canadian Wealth Secrets, we help high-income earners and business owners design a Canadian wealth plan that balances financial freedom and risk management through tailored investment strategies, smart leverage, and optimized portfolio performance. From RRSP optimization and tax-efficient investing to corporate wealth planning, salary vs dividends decisions, and capital gains strategies, every move supports your path toward financial independence in Canada. Whether you’re pursuing an early retirement strategy, building passive income, or comparing real estate investing vs renting, the key lies in aligning your financial buckets and corporate structure to minimize taxes while growing assets. With the right retirement planning tools, estate planning, and disciplined systems, even a modest lifestyle can evolve into lasting wealth building and a strong legacy for the next generation.

Transcript:

What if you’re making great money, saving consistently and still feel like you’re falling short? In today’s episode, we’re gonna be speaking about our conversation with Roman, a successful professional who’s built up a solid net worth, but feels like he’s been too erratic with his investments to date. We’ll unpack his story, explore whether using leverage makes sense for him and his family and reveal a few strategies to help you invest with confidence without blowing up your financial.

life. All right, my friends today we’re going to be digging in on this conversation I had with Roman and I thought it was worth sharing with the Canadian wealth secrets audience because we get a lot of people reaching out to us in order to try to enhance and optimize their wealth building plan. Now let’s give some background about Roman. So he’s he’s doing great. Income is north of $300,000 a year combined between him and his spouse.

They have a solid net worth, very little debt, only $60,000 mortgage on a $1.1 million home. So a common theme that we hear with Roman and with many others is that they have strong financials, but they’re still lingering doubt about their wealth plan. Will they have enough for down the road? are they doing enough? Should they be doing something with the equity in their home? So.

Here we have that consistent message from so many Canadians trying to figure out like when is it enough and how do I ensure that I’m positioning myself to be ready for that financial freedom date and time off in the future. Now there was no real talk here about like trying to get out of their jobs really early or anything like that but I do think that for a lot of people they just want to make sure that they have more than enough and in many cases

To be honest, I get this sense and not even a sense I get clients on calls that are telling me that really they don’t like the idea of seeing their actual net worth, decumulate over time. So a traditional retirement plan really involves accumulation. through that’s, know, people say it’s the easy part. It’s actually not, it’s really hard, but it’s just normalized, right? So we do this automatically. We take part of our income and we put it into our investments, but

A lot of people don’t really think about what’s going to happen when we start decumulating and decumulating means that we’re actually going to start selling off some assets and utilizing those dollars. You’re going to have to pay some tax and then we get to utilize what’s left over in order to live. The problem is nobody actually makes, you know, takes time to do the mental work of thinking through what does that look like and sound like if I retire with a $3 million net worth,

And if I’m using those assets in order to fund my retirement, especially if I’m following say a 4 % rule, kind of rule of thumb as a starting point, we never wanna do, you know, just simply do 4 % and not think about it. But as a starting point, if you use that as a thought experiment, what you’re missing likely is the fact that your $3 million may or may not stay $3 million. It may go up if the markets are doing well.

But it actually may go down, especially when markets aren’t doing so well. So the idea is that you won’t run out of money. But what is the missing piece here is a lot of people don’t know how much money they will sort of move on from this world with, right? So that’s the part that I think a lot of people are really struggling with. not only is it important about budgeting and trying to make sure that we’re investing enough, we have to actually understand how much we’re going to take and are we OK with the

know, mental load of seeing potentially our net worth decrease over time. If not, then we have to plan for that and we have to figure out a way so that we can live without feeling like say our net worth is decreasing over time. Now let’s talk about Roman a little bit more here in his scenario. He’s already saving $6,000 a month, auto investing with a conservative in advisor. That is a significant amount.

per month to be saving and allocating. So I just want to make that very clear here that we’re talking about essentially looking at about $60,000, $72,000 of income that is going into investments. That is a great savings rate. Now it’s on auto investing with a conservative advisor. So right there, I’m going to argue that

you know, doing that and actually projecting this out, which their advisor should already be doing for them, or if not, they should be requesting that they do this for them. that at even a conservative rate of return per year is going to produce a significant amount of a retirement nest egg. Now that obviously varies. If they plan to retire in five years and they only started doing this recently, maybe it’s not enough, but if they start this early enough in the process,

That’s going to be a significant pile for the family, right? So if you figure that you’re bringing in 300,000 after taxes, you’re probably left with 200 and you’re taking, you know, about 30, 35 % of that pile and you’re putting it into investments. That is a fantastic savings rate. Now portfolio performance. When he says conservative advisor,

I was wondering, like, what does that really mean? And for a lot of people, when they think about their advisor and they sort of rate their advisor, I think they sometimes are sort of taking a stab at the dark as to how they would describe them. Because portfolio performance over the last two years with this particular runway has their accounts growing at about 15 % per year. But again, it’s only a two-year runway. So that is not a conservative number.

However, the markets have been doing well for the past two years. So had you stuck around for the last five, what would those numbers be? They’re somewhere around 15%. I’m gonna argue they’re probably not that conservative, right? So you have to be really cautious when you start to think that maybe your advisor’s too conservative or I’ve never heard anyone say too aggressive. I always feel like everyone wants their advisor to be more aggressive, but they often miss the volatility that comes with that.

15 % per year, I like that number. And if I’m looking at say a 15 or a 20 year runway, $6,000 per month being auto invested into a portfolio that you’re saying is conservative but is earning about 15 % per year, I can tell you right now you’re probably gonna be okay assuming your spending habits don’t increase over time, all right?

Right now though, they’re saying that they’re feeling a little bit lost and they’re feeling like they don’t have control. They’re not sure of the strategy. And I think that’s one of the biggest pieces here. What they’re asking us at Canadian Well Secrets is should they be leveraging their home equity in order to invest more? And this opens the door to more questions. The real question is, what is doing the work that you’re doing now going to…

get you and I think that’s the real question that they have to figure out here. If you continue doing what you’re doing and if we pick a rate of return that’s reasonable, I don’t know if 15 % is gonna be reasonable for especially if they’re saying it’s a conservative investment advisor, but I’m gonna say pick a number that’s a little bit more reasonable comparative to historical rates of return just in the markets.

We tend to play in the 7 % to 8 % range just to be safer. Some people say, well, the SMP returns 10 % on average per year. I would rather go a little less and be happier than say going too high and maybe be disappointed. So take those numbers and then actually scale them out. How many more years are you gonna be doing this saving? And then what’s that gonna look like if we picked a number like 7 % per year? With the amount of money that they are investing.

I find it hard to believe that they’re not going to be in a good position based on their current lifestyle spending, given their ability to save and pay down that mortgage. Again, having such a small mortgage on such a large home value, right, over a million dollars of value and under $100,000 borrowed against it, it shows that they have discipline. So right here, I don’t know if this is really a question around whether they should borrow to invest

or whether they just need to get more clear on what is going to happen. So typically what we say with our Canadian Wealth Secrets clients is that we actually want to help you build a holistic wealth management plan. Now, while we typically work with high income earners and those with more complex situations like incorporated business owners or investors, this is something that everybody should be doing. You have to get clear on what we’re doing now if we continue to do that.

what will that look like and sound like? Because maybe you’re actually gonna be well beyond where you actually were hoping to get to, or maybe you’re gonna be well below. If you don’t do that work, it’s just a guessing game. And now we have Roman wondering, should I be borrowing against my home when they’ve never borrowed against their home previously? The second part that is really, I guess, concerning about this scenario is that they’re not sure what they want to invest in.

Right now they have an advisor, they’re calling them conservative, even though they’re generating 15 % return over the past two years. I think you have to understand what does it mean to be conservative? What does that mean for you? What kind of risk are you willing to take on? And is that risk in the stock market? Is that risk in the real estate market? Is that risk in private equity or some other type of investment? So rather than trying to figure out like what’s gonna…

be the best investment out there, you have to start thinking about what am I gonna feel comfortable and confident in order to invest in? Right now, I would argue that the amount of money that they’re putting into investments, that chunk of money is money that you’ve committed to put out there into the world. And if conservative investments are what you’re after, then continue doing that. Don’t introduce risk or a higher level of risk when you’re introducing leverage.

So said another way on this call, Roman was saying that, you know, they’ve got some, they’re from out West. They have some contacts. They’re in, you know, they’re in the trades. They understand kind of what it needs to be a real estate investor, so to speak. So they were thinking about maybe they should get into the real estate game. Well,

that game can be a whole lot more risky if it’s something that you’re new to. If you don’t understand the asset class, that’s a higher risk than say putting money in a conservative stock portfolio, in my opinion, right? So if I’m gonna be borrowing for the first time, you might wanna do something that you know you’ve already done and feel confident in doing. And maybe you start redirecting the $6,000 a month that you’re putting into those stock investments and you start building up a

fund so that you can put up a down payment for one of these real estate properties. These are all just ideas worth considering because what I don’t want to see is someone coming in and saying, I now want to use leverage. want to maybe introduce the Smith maneuver into my life, but also take on risk with those dollars. There’s two layers of risk here. We have the lit leverage and in the first place, so you’re borrowing money. So that’s money that has to get paid back at some point in the future.

And then you’re using that money in order to make what I would call potentially a higher risk investment, especially if it’s something you’ve never done before. So what I’ve recommended for them is first, they need to make a plan and figure out what is their current investment strategy going to get them and where does that put them? Do they feel like that is enough because maybe it is? Or do they feel like they wanna do some optimizing by using leverage? If they do choose to use leverage.

My suggestion would be get yourself a home equity line of credit. They’ve already set one up, so they have access to it. However, you have to make a plan to decide how much are we intending to get invested over what period of time? And I’m gonna recommend that they do something small to start and work their way up, because here’s something that you will not know. You can try to think ahead on it, but you will not know how you feel borrowing against your…

to make an investment until you actually do it. might seem like it’s going to be fine, but if you take a huge chunk and then put it into something that you’re not necessarily all that confident in yet, that can put you in a really tough spot mentally. Okay, your mindset can get really messed up. And as I mentioned earlier in the episode, they were talking about how they feel like some of their investments have been more erratic. So

Digging down the rabbit hole here, this is what introduced them to get a advisor. They got an advisor to kind of manage that for them. So I think that’s a great move. So two years ago, they said, instead of us being in and out of different asset classes and getting scared when there’s a dip and all of these things, they have someone to manage that for them. My question is, how’s that going to change when we borrow against our primary residents? Maybe as a starting point for this group, maybe they start thinking, listen,

using $6,000 of our actual income to invest currently, maybe we want to start with borrowing $6,000 or maybe even $3,000 a month in order to put it into low cost dividend paying ETF, something super conservative, uh, something that’s going to produce a dividend and something that isn’t as likely to dip as aggressively as some of the other aspects of the market.

There are so many different strategies that can be taken here. But once again, we wanna make sure that we go slow and steady and into assets that we feel comfortable with, specifically if there is volatility associated with it, such as the real estate market currently, which we’re seeing in Canada right now, and the stock market, all right? But before we can do that, we have to go back and say, where are we? Because right now, if they continue following this plan,

It is a perfect plan to get them where they’re going to end up. The problem is, is they don’t know what that looks like and sounds like. So they have to do the work to decide where am I now? Where will I be based on some fairly conservative assumptions? And is that enough for us? Because the reality is, even though you may have some debt equity sitting in that primary residence of yours, maybe that’s exactly where it belongs for you, your spouse, and your family. So what do you think, my friends?

How do you feel about your current investment journey, where that’s gonna get you and whether you’re thinking or maybe currently using a leverage strategy? Let us know by commenting on Spotify, comment on YouTube and give us a rating and review on Apple podcasts. We would love to hear from you and of course we wanna make sure that all Canadians are optimizing their plan to suit their financial needs, not anyone else’s.

If you’re curious about where you are in the wealth building journey for you and your family, you should head on over to canadianwealthsecrets.com forward slash pathways where you can take our short assessment to get some of the places that you’re doing well and then some of the areas that you can start focusing your attention on next. If you are an incorporated business owner or a high income earner who is beyond filling up their TFSAs, RSPs, and now they’re onto the next thing,

and they’re looking for more strategies that are going to help them with tax minimization and net worth increase or accumulation, you should be heading on over to Canadian wealth secrets.com forward slash discovery. And you can book a call to hop on with us today. As a reminder, this is not education. 

As a reminder, this is not investment advice and it should be taken as education and entertainment purposes only. It is for your information. So you should not construe any such information as legal tax investment, accounting, financial or other advice. And as a reminder, Kyle is a life licensed accident and sickness insurance agent, and he is the president of Canadian wealth secrets incorporated.

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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