Kevin O’Leary says a $65K salary can make you a millionaire in Canada with 1 simple rule. Here’s how his 15% formula works — and why time matters

It’s a simple approach that 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: “Don’t spend it,” he emphasized in his video message (1). That way, you can invest your money and let compounding do its magic.

But what does O’Leary mean by letting it compound?

The answer lies in the power of compound interest and market growth. In the video, he points to historical market returns of 8% to 10% annually, meaning that money put into it and left to grow should increase in value by 8% to 10% each year on average — assuming the markets keep performing as they have historically.

In other words, every dollar you invest today could become significantly more valuable decades down the road.

As for how much you should be putting into this strategy, O’Leary’s magic number is 15% of your earnings. This consistent percentage applies to all income sources, ensuring that your wealth-building efforts accelerate as your earning power increases.

“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 said in the video.

Granny would want you to make the most of her gift.

Balancing present needs with future wealth

To some Canadians, setting aside 15% of your income might seem daunting, especially when you’re juggling rent, groceries and other essential expenses. The key might be to view this percentage not as optional spending money, but as a non-negotiable bill that you must pay to your future self.

You could start by creating a budget that prioritizes your investment contribution right after essential expenses like housing, food, transportation and minimum debt payments. You might even consider it your “wealth tax” — a mandatory payment that builds wealth as opposed to depleting it.

Plus, you don’t necessarily have to start at 15%, if that percentage feels impossible. Instead, you might begin with whatever percentage you can manage consistently. Even 5% or 10% creates momentum and sets the habit.

You can always increase the percentage as you pay down debt, receive raises or find new ways to reduce expenses.

Minimizing transaction costs

One way to reduce expenses is to minimize what economists call ‘transaction costs.’ Transaction costs are exactly what they sound like — extra expenses on top of the price of any good or service.

While they might just be seen as the cost of doing business, having to pay a hefty commission on trading stocks might be the difference between investing 10% and 15% of your paycheque.

That’s why you might want to shop around for trusted brokerages that offer minimal commissions and fees.

Online platforms like CIBC Investor’s Edge offers the security of one of Canada’s biggest banks without having to pay huge transaction costs. Plus, with their comprehensive online trading platform, it actually pays to trade more. Active traders making over 150 trades a quarter can enjoy a discounted commission rate of $4.95 per trade. What’s more, CIBC doesn’t charge any account or maintenance fees if the combined market balance of all accounts is greater than $10,000.

Opening a brokerage account with CIBC Investor’s Edge can help you invest without being dragged down by commissions and fees — keeping your cash where it belongs, with you.

Canadian retirement plans — RRSP vs. TFSA

In addition to investing yourself, Canada’s Registered Retirement Savings Plan (RRSP) and the Tax-Free Savings Account (TFSA) are both powerful savings tools. Your best strategy might be to use one or a combination of both.

Here’s a relatively painless way to start:

1. Take advantage of the group RRSP: If your employer offers a group RRSP (2) with matching contributions, this could be 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, such as 3%. By contributing just enough to get the full match, you could instantly double your savings.

2. Focus on the TFSA: If your employer doesn’t offer an RRSP match, or if you’ve contributed enough to get the maximum match, you can direct your savings to a TFSA (3). A TFSA allows your investments to grow completely tax-free — and 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, vehicle or emergency fund. However, there’s a maximum you can contribute each year without penalties. In 2026, the maximum annual contribution was $7,000 (4).

3. Move to the RRSP: Once your TFSA is maxed out for the year, you can focus on contributing to an individual 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, you can take a small portion of your next raise — or more — and add it to your contribution. With each raise that follows, you could keep doing the same 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.

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 a person who starts investing 15% of their $65,000 salary at age 25. They contribute $9,750 annually (or $812.50 monthly) to diversified index funds, earning an average annual return of 9%. By age 65, their investments will have grown to approximately $3,428,000 — despite contributing just $390,000 of their money over 40 years.

Compare that to a second person who waits until age 35 to start the same investment strategy. Their final balance at 65 would be around $1,382,900, despite contributing $292,500.

The first person’s 10-year head start resulted in about $2,045,000 more retirement savings, even though they only contributed an additional $97,500 of their money.

This dramatic difference illustrates why O’Leary recommends you start saving immediately, regardless of age or income level. Time multiplies money in ways that higher salaries alone can’t match.

It’s never too early — or too late — to start saving.

Find the right place for uninvested cash

Of course, not all your extra income goes immediately into investments. There are other things to consider, such as having an emergency fund.

As its name implies, an emergency fund is for emergencies — anything from the sudden loss of a job to unexpected health issues — that allows you to cover unforeseen expenses without going into debt.

One way of setting up an emergency fund that can also grow your uninvested cash is by putting it into a high-interest savings account (HISA), which gives you access to your funds when you need them while earning interest over time.

With an EQ Bank HISA, not only can you build your emergency fund with interest rates as high as 2.75% — up to 6x higher than the rates offered by big-name banks in Canada — but also you’re charged no monthly fees and can make unlimited transactions without requiring a minimum balance.

Plus, if you’re worried about the security of your funds, deposits with EQ Bank are backed with CDIC deposit insurance of up to $100,000.

The power of cutting unnecessary spending

In case he wasn’t already clear, O’Leary repeats a crucial caveat in his video: “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.

At the same time, 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. To do so, you can even create a ‘want versus need’ filter for discretionary spending.