Net Worth for Canadians explodes after you get to your first $100K. Don’t believe me? Take a look at this data below.
Net Worth Growth by Age in Canada: 2024 Data
| Age Group | Average Net Worth (2024 Q1) |
| 30 (estimated)* | $100,000 |
| 35-44 | $657,582 |
| 45-54 | $1,346,291 |
Canadian households typically reach a net worth of $100,000 at around age 30.
Once this initial $100K is reached, net worth grows rapidly. By ages 35 to 44, the average net worth jumps to (almost 660K) $657,582, over 6 times the initial 100K.
This momentum continues well into the 40s and early 50s, with the average net worth rising to $1,346,291 for Canadians aged 45 to 54, over 13 times the initial amount!
This is why getting to that first $100K is so important—once you cross that milestone, your net worth seems to explode. As Charlie Munger once famously said, “ I don’t care what you have to do… Just get to $100,000. After that, you can ease off the gas a little bit.”
So, what’s happening here? Why does net worth accelerate so quickly after reaching $100K? There are three key reasons behind this rapid growth:
Reason 1: Investing and Compounding Returns
Once you hit that $100,000 mark, building wealth gets a whole lot easier thanks to the power of compounding. To show you just how powerful this can be, I put together a simple spreadsheet: imagine investing $10,000 per year with a 10% annual return in tax-free accounts like a TFSA or RRSP.
Our target? $1,000,000, hitting milestones every $100,000 along the way. Let’s dive into the numbers and see how quickly things can grow.
Initially, starting from $0, the time required to accumulate each additional $100,000 decreases over time as compounding gains momentum:
- First $100K (7.27 years): This initial milestone takes the longest. It’s all about building that base, and progress is driven largely by disciplined contributions rather than growth.
- Second $100K (4.25 years): The second $100K takes noticeably less time already than the first.
- Third $100K (3.02 years): The third milestone is reached in just over 3 years.
- Fourth $100K (2.34 years):
- Fifth $100K (1.91 years): By the time you reach the fifth year, It takes less than two years to add the fifth $100K, a clear sign that your invested money is now doing a lot of the heavy lifting for you.
- Sixth $100K (1.62 years):
- Seventh $100K (1.40 years):
- Eighth $100K (1.24 years):
- Ninth $100K (1.11 years):
- Final $100K (1.00 year): The journey from $900K to $1 million takes just a year. The investments are now generating substantial growth, allowing you to reach your final milestone rapidly.
The first 100K will take 7.27 years, and the last 100K from 900K to a million, using the EXACT same strategy, will be only 1 year, all for a total of about 25 years!
Returns from contributions vs investment
As you build each $100K, something amazing happens: the balance between your hard-earned savings and growth from returns starts to shift—dramatically. In the beginning, almost three-quarters (73%) of that first $100K is from your own contributions, with just 27% from returns. But fast-forward to the $1 million mark, and things look totally different. Now, 75% of your wealth is powered by returns, with only 25% from what you’ve directly added.
Another major tipping point comes at around $300K, where returns start outpacing contributions. That’s when compounding really kicks in, making wealth build faster with each step forward. By the time you’re at $1 million, your investments are doing triple the work of your contributions. It’s like your money starts working for you, accelerating growth every step of the way.
Think of compounding like the launch phase of a rocket: most of the effort is needed to break free from gravity. Getting to the first $100K is the most challenging part, but once you escape that “financial gravity,” the rest of the journey becomes faster and easier—just like a rocket moving smoothly through space.
If you want to play with these numbers yourself, check out the spreadsheet I made on our website—you can input your own interest rate and payment amounts in the blue numbers and see how quickly you can reach $100K. For example, the 10% rate of return I used in the example above is quite high, so you can lower it to see how it affects the results.
Reason 2 Why Net Worth Skyrockets after 100K: Income Growth
Net Worth by Income Level
Net Worth by Income Level in Canada:
| Year | 0-20% (Lowest Quintile) | 21-40% (Second Quintile) | 41-60% (Third Quintile) | 61-80% (Fourth Quintile) | 81-100% (Highest Quintile) |
| 2024 | $375,574 | $502,140 | $791,597 | $1,099,071 | $2,291,029 |
Income plays a huge role in building wealth, and the numbers make it crystal clear. In Canada, the wealth gap between income levels is striking: in 2024, those in the lowest income bracket (the bottom 20%) have an average net worth of $375,574. Compare that to the top 20%, whose average net worth hits $2,291,029—that’s over 510% higher!
Even moving up just a bit shows a big difference. The 21-40% group has an average net worth of $502,140, which, while higher, is still miles behind the wealthiest households. In the 41-60% bracket, net worth averages $791,597—double the lowest bracket, yet far from the highest. For the 61-80% group, average net worth finally breaks the million mark at $1,099,071, but the top 20% still outpaces them by more than double.
These numbers highlight that, as income grows, wealth-building becomes faster and easier. High earners don’t just have more income; they accumulate wealth at a much quicker pace, and the gap between income levels only grows over time. Naturally, as you progress in your career, your income will likely increase, opening up more opportunities to save and invest.
How to Increase Your Income in Canada
Understanding these numbers can help guide smarter financial decisions:
- Location Matters: Relocating to a province with higher wages can boost your income and net worth. Alberta offers the highest average income at $61,500, paired with relatively lower living costs, allowing you to save more and invest.
- Invest in Education: Higher education boosts earning potential in Canada, with a bachelor’s degree median income at $69,418. In contrast, a college diploma brings in $47,259, high school $35,017, and no certification $26,824. Investing in education, especially in-demand fields, can significantly increase income.
- Choose High-Income Careers: Specialized industries like management, engineering, finance, and healthcare offer higher wages. For example, senior management pays at $91.16 per hour and engineering at $49.65. Finance, health, and science roles follow, earning $42–$44 hourly. Trades and transport also offer solid wages at $31.77 per hour.
- Start a Business: Most of Canada’s wealthiest built their fortunes by starting a business. Owning a business offers the potential for significant wealth through growth, profits, and eventual sale, making it a strong pathway to financial success.
I go into Average Canadian income numbers in way more detail in another video, so check that out!
Reason 3: High Savings Rate
We’ve covered compounding and boosting your income, but here’s the real key to building wealth and it’s super simple: saving more of what you earn. No matter how much you make, if you spend it all, your net worth stays stuck at zero. Saving is the true foundation of wealth—it’s what allows your investments to grow.
Your savings rate is the percentage of income you put aside. For example, if you earn $100,000 and save $20,000, you’re saving at a 20% rate. The higher this rate, the more you can invest, accelerating your compounding growth. Even if you earn a million dollars, spending it all leaves you with nothing—true wealth comes from saving and investing.
In Canada, the average savings rate rose to 7.2% in Q2 2024, up from 4.9% the year before. While this is progress, there’s room to save more. Setting a higher savings rate than the national average can set you apart, giving you more to invest and grow.
One big barrier to saving? Lifestyle inflation—spending more as you earn more. Avoid it by directing extra income to your savings. Don’t wait to start, either; the sooner you begin, the more time compounding has to work for you. Even small, regular savings can snowball over time.
And remember, saving is a habit. Setting aside a fixed percentage of your income monthly builds discipline and keeps you on track. This habit lays the foundation for hitting big financial goals, like your first $100K—a milestone that fuels long-term growth.
Net worth growth doesn’t happen by accident—it’s about having the right strategy. At Blueprint, we offer customized plans to help you hit your milestones. Visit our website for more info, and if you found value here, remember to like and subscribe!
