Money mastery isn’t always taught in school. In fact, a survey by Intuit found that 73% of Canadian high school students wish they understood more about personal finance but don’t know where to start.
But Ramit Sethi’s goal in life is to bridge that knowledge gap.
“Many people drift through their 20s and 30s hoping money just figures itself out,” Sethi said in a video posted to his Youtube channel in June.
With his website, I Will Teach You To Be Rich, he created an empire built around clear, no-nonsense financial advice that anyone can put into practice today.
If you’re in your 20s, 30s, 40s or beyond, his 9 money milestones are worth considering.
Milestone #1: Zero high-interest debt
His first milestone is clearing all high-interest debt. This means any debt with an interest rate of 6% of higher.
“You cannot build a rich life while dragging credit card debt behind you — and you will be shocked at how fast your money grows once this anchor is gone,” Sethi says.
Credit card debt is the worst kind of debt, according to Sethi. It creates compound interest in reverse, counteracting any of the benefits you would otherwise receive from investing. Clearing this debt before doing anything else with your cash should be your number one priority.
The two most common types of debt payment strategies are the avalanche and snowball methods. The avalanche technique starts with your largest, or highest interest, debt to create cascading relief once it’s settled. The snowball method aims to knock off smaller debts first and build momentum over time.
To make clearing your high interest debt easier, you can consolidate it into one loan at a lower rate with Loans Canada. Instead of juggling multiple monthly payments, you’ll have one predictable payment to manage each month.This can both ease your interest costs and improve your credit score.
You can shop for the most competitive interest rates on personal and debt consolidation loans, since Loans Canada specializes in comparing rates offered by different lenders. You don’t need a minimum credit score or annual income to receive personalized loan offers.
Milestone #2: Have a bullet-proof emergency fund
After your debt is cleared, the next milestone is creating an emergency fund.
While many money influencers suggest three to six months so you can invest more of your money faster, Sethi believes six to 12 provides true psychological security.
“Your goal is to build six to 12 months of core expenses in an emergency fund,” Sethi notes. “That includes rent or mortgage payments, transportation, groceries — and put that money in a boring high-yield savings account.”
A high interest savings account can help you grow your savings faster. It often pays to shop around because some banks offer special interest rates for new customers.
For example, if you open a Simplii Financial high interest savings account (HISA), you can earn 4.25% interest on eligible deposits up to $100,000 for the first four months of having an account.
If you’re already a client, you can still take advantage of the welcome offer if you’re still within 60 days of opening a Simplii Financial account. Offer ends September 30, 2025.
Simplii also has a no fee chequing account which can help you make the most of your everyday spending while you’re at it.
With unlimited transactions and no monthly fees, Simplii’s no-fee chequing account simplifies everyday financial activities, allowing you to make purchases without a worry.
Plus, you can earn 0.01% to 0.1% interest on your balance.
Milestone #3: Reach full financial automation
His next milestone is all about ensuring you are investing regularly, without lifting a finger.
Automating your finances means you don’t have to do anything to invest — it happens automatically. This requires setting up automatic contributions with your banking and investing accounts, so a percentage of the money you earn is automatically invested every time your paycheck hits your account.
“The secret to getting rich is not about stock picks, it’s not about crypto, it’s definitely not day trading … it’s boring, automated, consistent investing,” according to Sethi.
He recommends investing at least 10% of your income into tax-advantaged savings vehicles — like an RRSP or TFSA — every time you are paid.
He also suggests increasing that auto-investment by 1% every year to supercharge your investment plan — meaning if you invest 7% of your pay this year, next year you would revisit your automatic investment plan and set it to 8%. The year after would be 9%, and so on.
Using an app like Wealthsimple Invest makes it easy for you to automate monthly contributions to your RRSP and/or TFSA
Once you set up your risk profile and financial goals, Wealthsimple will build a smart, diverse, expertly-managed investment portfolio to help achieve your goals.
Plus, you’ll get a $25 bonus when you open your first Wealthsimple account (through this page) and fund at least $1 within 30 days. T&Cs apply.
Once you’re fully automated, it’s time to consider diversifying your investments. Investing in stocks and bonds with a 60/40 split is a good first step, but still exposes you to market risks tied to fiat currency, global trade and the like.
Milestone #4: Reach career mastery
Sethi notes that your income is your most powerful wealth building tool. Your career is where you earn money, and the more money you earn, the more you can invest.
“The majority of millionaires in America made it from having a nice stable salary and then investing their money in low cost investments,” he says. “They didn’t win an insurance settlement. They didn’t pick a lottery ticket.
“They literally had a nine-to-five job and they took part of that money and invested. That’s why it makes a lot of sense for you to pay attention to your career and build the skill of increasing your income.”
The same goes for Canadians. A survey by RBC found that Canadian millionaires’ wealth is largely self-made. Wages and investment gains account for the largest source of their assets and only 8% inherited the bulk of their wealth.
Milestone #5: Know your number — and your why
Sethi’s next milestone is all about finding and understanding the bank account balance you need to retire and achieve all the financial goals you want in life.
“What number in the bank is enough for you? Is it a million dollars in savings? Two million, five million? Okay, but why?” Sethi asks.
“Why do you want that number? Truly rich people know their number and they know their why.”
Ask yourself what number will make you feel like you have enough to retire comfortably, retire early or go on that dream sabbatical. Knowing how much you need and why is the backbone of any strong financial plan.
“If you don’t know what that money is for, then you are simply wasting your life chasing a number,” Sethi continues.
Once you know your number, consider opening a self-directed trading account through a platform like CIBC Investor’s Edge to invest in low-cost index funds.
With CIBC Investor’s Edge, you can enjoy low commissions on trades and no or minimal account maintenance charges, depending on the size of your portfolio. You don;t have to pay any account fees on RRSPs with a balance of $25,000 or more and TFSAs with a balance of $10,000 or more. For non-registered accounts, the platform waives maintenance fees if the account balance exceeds $10,000.
Build your portfolio with CIBC Investor’s Edge and get up to 100 free trades and over $200 in cash back.
Milestone #6: Have a shared financial dashboard
If you are married, or considering marriage, this is crucial advice.
Sethi notes that there should never be one person in the relationship who controls all the fiances — as that can be a breeding ground for resentment. A shared dashboard means you actively look at your money together, share financial goals and make long-term plans together.
His advice isn’t just about emotions. It’s also practical.
“If you happen to get hit by a bus one day, you’re going to leave your grieving family not even sure where the money is.”
If one partner holds access to all the accounts, and that person is suddenly gone, this creates extra chaos for the partner left behind.
With this in mind, Monarch Money offers tools for couples to track your combined finances across multiple accounts. This can help you and your partner create a shared dashboard to manage your full financial picture.
Monarch Money is a platform that acts as a personal finance concierge. It connects you with over 11,200 financial institutions — this means you can have a top-down view of your bank accounts and investment portfolios.
Milestone #7: You’ve created your “no” list
What don’t you care about? Cut it out ruthlessly.
“This checkpoint is about clarity. It’s about knowing what doesn’t matter to you,” Sethi notes. “Here’s what you need to do: Write down three things you don’t care about spending money on, then write three things you want to spend money on unapologetically.”
This means actively looking at what you spend money on by tracking spending for a few months. Make sure your spending is aligned with the things you actually care about.
“Once you know what is not part of your rich life, then you can cut those things without guilt, and you can actually redirect that money to the things you love,” Sethi says.
Tracking your spending could show that you’re actually spending $120 a month on subscription services you haven’t used in years, allowing you to make cuts and put your money toward something more meaningful.
Milestone #8: A simplified credit card assortment
Sethi’s next milestone is all about simplicity.
It is easy to get caught up in financial optimization to the detriment of enjoying your life.
An all-consuming obsession with getting the best deal possible, or carrying around a wallet full of credit cards that need a spreadsheet to keep track of the best cash back rates for each spending category, is not how you create a healthy relationship with money.
“Do you really want to spend the rest of your life optimizing a spreadsheet of cash back rewards?” Sethi asks.
This takes up time you could better spend earning money, recharging by watching your favorite show or being with family. All that work to save an extra $50 a year isn’t always a worthwhile use of time.
Instead, he recommends keeping “one to two solid rewards cards.”
“Cancel those junk cards, including those predatory f—ing credit cards with 30% plus APRs that you got from Gap and Kohl’s to get $10 off a sub par pair of jeans,” he continues. “And then monitor your interest rates like a hawk while you’re paying off debt.”
Neo Financial’s Mastercard can be a good option to consider for one of your two go-to credit cards.
It has no annual fee and offers 1% cashback on gas and groceries so you can earn while you spend on essentials.
And if you shop at select stores nationwide — like Aldo and Pet Valu — or book a room with Best Western, you can get up to 15% cashback on your purchases.
Apply today and get a $25 bonus.
Milestone #9: Have your financial vision in place
Finally, Sethi recommends using everything you learned from the other milestones to create a financial vision that you revisit yearly.
What you think you want out of life in your 30s will not be the same as what you might want in your 40s or 50s. At the end of each year, update your plan to suit your current lifestyle and future goals — a recurring calendar event can help with this.
Sethi recommends asking yourself the following questions during these check-ins: “What do I want more of in this coming year? What doesn’t matter to me anymore? What do I want less of? And finally, what’s next?”
While it’s certainly not an easy thing to think about, planning for the finances of what happens when you’re gone can be a life saver for your loved ones and ease your mind in the present by knowing your wealth is protected.
With PolicyMe finding the best, most affordable life insurance policy for you is simple. All you need to do is fill in some information about yourself — things like your age, income and smoking status —and they will provide you with a free quote in minutes.
Sources
1. Intuit: Intuit Survey: Few Canadian high schoolers feel they have a solid understanding of personal finance terms (July 18, 2024)
2. Intuit: I Will Teach You To Be Rich: 9 Major Money Milestones to Accomplish Before 40
3. RBC: Canada’s millionaires concerned about next generation’s financial future: RBC
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
