Do you still want to be a millionaire?

Do you still want to be a millionaire?

I read an article about Canada’s wealth recently and it got me thinking – is a million bucks really that much money anymore?  Do you still want to be a millionaire?

According to the article I read, one latest study revealed Canada now ranks #5 in terms of millionaire households from countries around the world.  Here are the top-10 countries from the list/article:

Countryn (in thousands)

The article goes on to say that millionaire households in Canada now account for 3.5% of all families and they comprise more than 30% of the entire country’s wealth.

(The study qualified millionaires are those with more than $1-million in U.S. dollars in financial assets but those assets exclude real estate.)

Given that qualifier I would say absolutely $1 million owned or vested (including pensions, life insurance, stocks, bonds, cash, other) is still a very healthy chunk of change.  A few years ago I wrote if you’re a Gen Xer I think you’ll need at least $1 million saved for retirement, and likely more if you’re a millennial, to retire well.  For further context, that $1 million saved and invested for your retirement should exclude government pensions and programs like Canada Pension Plan (CPP) and Old Age Security (OAS).  Count on yourself before you count on government policy.

When it comes to our financial plan, one of our aspirations remains to own a $1 million personal portfolio (excluding our real estate and pension assets) in order to “live off dividends” to some degree.  We feel such an approach will be valuable for these key reasons:

  • There are simply too many unknowns about our future. Keeping our capital intact will be an enabler for some “what ifs” in life and flexible financial decision making.
  • It doesn’t really matter whether our passive income comes from stock dividends or ETF distributions or both; this income will help replace part of our salaried income.

Do we still want to be a millionaire?

Heck ya.  We’re only “there” if you include our home equity today.  We’ve got some distance to go to semi-retire within the decade.

Back to you, I still believe a million dollars is a big bucket of money to own.  This is especially true if you have saved and grown this money without the help of any workplace pension plan or you’ve been largely shut-out of the real estate boom in major cities like Toronto and Vancouver.

$1 million in financial assets is a sizable sum of money most Canadians will never own.

What’s your take on the millionaire club?  Do you aspire to be in it?  Are you working towards it?  If so how?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

50 Responses to "Do you still want to be a millionaire?"

  1. Given the US is about 10 times the size in population its interesting to see that they “over-index” on millionaires by almost 100%. I wonder what the reasons for that might be? Tax structure? Better pay? More upper level management jobs?

  2. “Thanks. I hope to have my health which is my greatest asset. All the money we’ve saved will be for not if we do not have our health to enjoy the time and FI we’ve worked hard for…”

    100% agree. Eat healthy, get plenty or rest and definitely stay very physically active….control the things you can and hope for the best with things you can’t and it also helps you mental health.

    Ran16km this morning making it 51k for the week, plus got to the gym 3x to strength train along with lots of yardwork, activities like kayaking etc. Feeling great at 58!

    1. No friggin’ way I could run 16 km right now! Maybe 2-3. I have work to do I know it to be in better health. I do mountain bike, cut my 0.5 yard and do lots of walking while golfing. Not bad but not good enough for sure.

      1. You’re probably doing more than most. I LOVE being in reasonable shape, especially for my age. There is nothing physically I can’t do now that I could 30 years ago. In fact I have a lot more endurance now and I’m 10 pounds lighter (and I wasn’t heavy then)

        I was at my peak fitness at about 3 years older than you and setting personal bests at various race distances including the marathon. My long runs were 32 to 37km and I was running between 110 and 130km / week year round! I long for those days! That stallion (haha) has since lost a lot of that might but still works very hard to stay in shape.

        Good luck with your health and fitness.

        And back on topic- yes, aspiring to be a millionaire from invest-able assets is a very good thing…better yet is when you get there.


  3. That’s a pretty good chunk of change and those are interesting stats! In Vancouver a lot of people have paper gains of $1 million in assets (from real estate) but yes, I agree that investable assets is a whole different ball game, and I’m impressed that 3.5% of Canadians still qualify for that statistic.

    I would love to be a millionaire with $1 mill in investable assets and am aiming for that by the time I hit 40.

  4. DGI, no I’m saying ignore the price fluctuations of your portfolio as well and rebalance according to your plan. In retirement spend dividends and capital gains according to the total return approach. By spending only dividends you will need to save more than a total return approach. When dividend payers and non dividend payers are matched for what drives return – P/E, P/B etc., the have equal returns, so why ignore all those non dividend payers? Owning only dividend payers you will have a less diversified portfolio which is therefore less efficient and so less likely to give you an optimal outcome. More on the subject here.

    1. “By spending only dividends you will need to save more than a total return approach. ”

      That is not true

      Your comment is an example for one the five myths of index investing:

      Dividends are more stable, and more reliable than capital gains. This is a fact.

      You and Swedroe disagree with that.

      But Jack Bogle understands it:

      I have no desire to educate you further on your other misconceptions. My time is very valuable.

      1. DGI, your article about index investing reveals a lack of understanding of what index investing is and how it works.

        I agree that dividends are more stable, but that has nothing to do with building an efficient portfolio that gives you the best shot at at the best outcome.

        Actually Jack Bogle is a proponent of index investing.

        This is not about agreeing with someone or this or that, or someone’s opinion. It’s simply about looking at the data and going where it leads you.

  5. A million dollars? Yes absolutely, count me in! This is of course my ultimate investing goal. I think 1M is still the gold standard for me.

    Now only if the housing situation in Toronto can be solved first. Prices are still way too high in Toronto despite the recent drop, and I really need to buy a house as an upgrade to my current dwelling. If I can get that settled, then I can focus entirely on the investing process. So hopefully, housing can become more affordable here in the GTA, so that all my money does not go toward a big mortgage and interest, which would squash my millionaire dreams!

    1. Same Peter. I mean, that’s still a huge sum of money. I also hope we kill our debt sooner than later. This means most of the income we earn will be for us to keep and enjoy.

      I think you might be waiting some time before the bubble really bursts in Toronto – no?

      1. Yea, it could be a while, but you never know! Let’s wait for a few months, and see if Canada raises the interest rate again. I think then we will see what happens.

  6. RBull, I agree completely. Grow the pile in the accumulation phase, then focus on cash flow (total return approach), rather than limiting yourself just to income, in retirement. That way you will have a more diversified portfolio which is therefore more efficient thus giving you the best shot at the optimal outcome.

    1. I have no problem with a total return approach and I think that’s exactly what investors should focus on; dividends are a very important sub-set of total return and I believe, the benefit of some dividend stocks is you get both. The challenge of course is a) finding them, b) staying with them through thick and thin and c) diversification in them.

  7. When saving for retirement I focused on growing the pile. For most people that will be the biggest determinant of what kind of lifestyle and investment choices they have in retirement, outside of pensions (if applicable).

    Now in retirement I focus on CASH FLOW. For us this is a strong base of diverse income generating investment assets, a work pension, together covering basic expenses and much more and capital to deplete as needed/desired over time, and in future government pensions to build a higher income base.

    1. As I near retirement or semi-retirement rather, I too, focus on cash flow. I do think however many young investors just starting out should understand and think through the total return equation.

      Hopefully our plan will help us realize our cash flow dreams: dividends + pensions + RRSP growth assets + paid off home + hobby income. Gotta dream 🙂

      1. I agree, although for most young investors it will take quite a few years to really understand investing and how to achieve their goals, no matter what approach (total return or dividend only) or what mix of assets they use. It’s also likely ideas, plans and tactics will evolve and change over time, for many reasons.

        You’re well on your way to realizing your dream. Good for you.

        1. Well…sadly it took me until age 30 to figure out this personal finance stuff and mainly, how important it is. Those “kids” blogging and striving to figure things out in their 20s will be WELL on their way to financial wealth in their 40s and 50s. Good on them.

          Thanks for the support on our path.

          1. You’re welcome.

            No use thinking/looking at what could/might have been. I started saving early but made many mistakes and for a few years developed some expensive bad spending habits. We still made it here albeit with less and later than expected. Most importantly there is much to be thankful for and we think of this EVERY DAY.

            You’re WAY AHEAD of most people especially at your age and you’re going to have a fantastic set of FI choices ahead of you.

            1. Thanks. I hope to have my health which is my greatest asset. All the money we’ve saved will be for not if we do not have our health to enjoy the time and FI we’ve worked hard for…

  8. Thanks Lloyd, Cannew and DGI!! “I focused on what I thought the portfolio was worth…..I’ve shifted my focus over to the “what does the portfolio generate”. Breath and be calm when markets fluctuate.
    “we don’t concentrate on the pile, but what the pile provides, Invest and watch the income generated and the pile will follow.”
    “The quoted value is just some number on paper”.
    Thanks for the inspiration to keep calm and keep investing.

  9. Do I want to be a millionaire?

    I don’t care really

    I would rather generate $30,000 – $40,000 in annual dividend income.

    The quoted price of that portfolio could be down to $600,000 in another year, or up to $2 million. Noone knows where stock prices will go. I have better visibility about dividend income than portfolio values.

    As long as those dividends are paid out and raise like clockwork, the quoted value is just some number on paper. My goal is to find those companies with sage dividends that will be paid out and raised above the rate of inflation.

    Congrats on being a millionaire ( despite the fact that the survey excluded your household)

    1. I understand the various behavioural reasons that some investors prefer to focus on dividends, which can lead to better outcomes in those circumstances, but to have a complete blind spot to the other components of shareholder yield, is unusually extreme.

          1. So, you are saying that I should pay attention to the fluctuations of my portfolio. I am saying I should ignore it, and stick to my plan. I would keep investing through thick or thin in the accumulation phase, and just live off the dividend income stream in retirement when no longer working.

            Why should it matter that the quoted price of this portfolio is down to $500K or up to $1.5M?

            When a long term investor focuses on useless price fluctuations, they are more likely to do something stupid, like timing the market, or getting scared and selling low, or getting scared and trying to call the top.

            I agree with Jack Bogle that the stock market is a giant distraction to the business of investing. I also agree with him that people should keep investing through thick or thin, and stick to the plan/stay the course. This is true whether we are talking about index funds, dividend paying stocks, real estate etc. I also agree with Jack Bogle that retirees should focus on the income stream generated from their portfolios and their pension/social security income, and ignore the stock market.

            If you disagree with me, so be it.

    2. Fair point but based on sustainable yields I think I’ll need about $1 M to generate $30,000 – $40,000 in annual dividend income. My calculations to date forecast that….

      “As long as those dividends are paid out and raise like clockwork, the quoted value is just some number on paper.” That’s the key though….dividends while secure are never guaranteed so I do hold some indexed ETFs just in case. I can always spend those distributions generated from the ETFs…

      Thanks for the congrats. I certainly don’t feel it but I know I’ve been very fortunate in life thus far.

  10. For almost the first thirty years of saving/investing, I focused on what I thought the portfolio was worth. And admittedly I still track that but I’ve shifted my focus over to the “what does the portfolio generate”. Whenever we have a bad day on the markets the net worth number can fall precipitously but the income number doesn’t and in many cases grows due to DRIPs. This has a calming effect to some extent.

    1. I feel the same Lloyd. For example, my portfolio has dropped close to $15K over the last month or so but I don’t worry about it. That’s because the income my portfolio generates has actually increased over that time thanks to dividend raises and dividends reinvested. This absolutely has a calming effect – for me!

  11. We’ve discussed this and one should not worry or assume one has to actually save $1Mil. You’ve got to save and keep adding funds, but with Compounding, re-investment and not investing foolishly, those funds will grow and grow faster over time. Suddenly one will find they have $1Mil,it will grow even faster and suddenly you’ll have surpassed that goal.
    But as I’ve said before, we don’t concentrate on the pile, but what the pile provides, Invest and watch the income generated and the pile will follow.

    1. Will do cannew – and I am – focusing on the pile although dividends are just part of total return. Hopefully the pile will grow anyhow, I’m banking on it 🙂

  12. Mark, it would be interesting to see, with regard to the country list, the percentage of the population that are millionaires. I think you mean principle residence is excluded from the figures, not investment real estate?

    I think it’s reasonable to include CPP (but not OAS) in your financial assets. It is an account with your name on it, well funded and managed, and politically near impossible for the government to renege on.

    I agree millennials will need more. At trend line inflation of 3%, $1 million will be worth only $412,000 in 30 years time.

    Lloyd, I don’t think these surveys tax adjust tax deferred accounts.

    1. Thanks for writing Grant. Always good to hear your experienced perspectives….

      I would have to look at the survey in more detail but yes, that’s my understanding, the primary residence is not included for sure.

      While I do think it’s absolutely reasonable to include CPP and OAS and other assets in net worth I’m not “counting” on it heavily if there is chance of semi-retirement in my future. This is because my CPP will be lover and I’m still need to wait until age 65 or so (depends what government rules are of the day…) to collect OAS.

      Absolutely millennials will need to save more than Gen X and definitely Boomers did. The growth simply won’t be there for them….

    1. I assume it’s by household as per survey – so for some it’s couples and for others it’s single income.

      I don’t think we’ll get to $2 M unless we work our entire careers (until age 65) for a modest pension.

        1. Probably not but fair question. I wouldn’t think such surveys could account for the tax considerations nor inflation issues associated with financial assets but I could be totally wrong. I didn’t see the detailed methodology.

  13. Intresting post. Yeah for sure I will be a millionaire. It used to be I wanted to be, now i see we will. When i analyze my account it shows in 30 years if the market is healthy i will have over a mill and thats without putting anything else into the market. We contribute 1500$+ every month. Its just a matter of time. Like you said whats a million anymore tho. Back in my day they had penny candies, now they dont even have pennies!

  14. Hi mark

    I was wondering if I could pick you brain for abit regarding the purchase of USA property as a Canadian

    You seem to have great advice which is hard to find


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