Answers to

Practical Questions

Let’s do the math (groan):

If you are 25 years old, you likely have another 40 years of work ahead of you, and you will likely live much longer than that.

If you were to save JUST $1 per hour of your $3.60 per hour wage increase until you turned 65, and invested it all in an equity portfolio that earned an average of 8% per year in your TFSA, you would have a staggering $539,000 when you turned 65!

Now that is good, but if you decided to spend ONE HALF of your wage increase, or $1.70 per hour, and then invested the rest the same way as above, when you turn 65 you would almost be a millionaire! You would have $916,000.

This $916,000 could then be invested in a lower-risk balanced portfolio, (i.e., 50% equity and 50% fixed income), earning say 4% per year, that would provide you with a TAX-FREE annual income of $49,000 per year until you were 100 years old.

If your spouse was also earning minimum wage and followed your smart lead, you would have a combined TAX-FREE income of $98,000 per year!