#1. Time in market matters

Sethi’s thesis seems to hinge on the most important factor: Time. The power of compound interest works exceptionally well on longer time scales. Plus, the idea of time in the market is the one factor that is equal for anyone, whether you're a billionaire investor or a full-time server at a fast food restaurant.

A disciplined investment strategy deployed over several decades should help anyone generate wealth. Ramit calculates that a person earning $50,000 and investing $7,500 a year at an annual growth rate of 7% and paying a 0.1% fee should have $743,849 within 30 years. He says sustaining this strategy for just four more years could boost this to just over $1 million (or $1,006,939, to be precise).

Put simply, the longer you can stay invested, the better.

“Time and compounding are on your side,” Sethi said.

Unfortunately, most Canadians start investing far too late. Three-quarters (75%) of Canadian adults aged 55 to 64 have $100,000 or less in savings and 44% have less than $5,000, according to a recent survey by the Healthcare of Ontario Pension Plan.

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#2. How much you invest

The amount of money deployed into investments every year is also essential.

In previous videos, Sethi has recommended a 10% investment rate, which means you must set aside $1 for every $10 in income to have a shot at becoming wealthy within a reasonable time frame.

However, many Canadians miss this goal. The personal savings rate in the fourth quarter of 2023 was 6.2%, according to YCharts. Even those who manage to meet or exceed this savings target may not invest in the right places to maximize returns.

#3. Investment returns

The third lever on Sethi’s list is investment returns. Sethi admits that this is probably the toughest lever to maximize.

“You have less control over this,” he said. “So this really shouldn’t be your top priority.”

Instead of chasing fancy tech stocks or cryptocurrencies, Sethi recommends deploying funds into a simple, low-cost index fund.

Fortunately, this is something the average Canadian seems to understand. According to a BMO survey 77% of Canadians have investments, which means at least some of their investments may be growing at the market rate.


1. Ramit Sethi: YouTube

2. Healthcare of Ontario Pension Plan: Canadian retirement survey 2023

3. YCharts: US personal savings rate

4. BMO Financial Group: Majority of Canadians are investing but many still prefer cash savings


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Vishesh Raisinghani Freelance contributor

Vishesh Raisinghani is a freelance contributor at Money.ca.


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