How to retire wealthy in Canada

 Four simple steps to getting the most out of your life on an Island

Everyone wants to get rich and we know how. It’s simple. Bank these PEI beach days. Add to that formula three epigrams: 1) abstinence builds empires, 2) don’t keep up with the Jones and 3) the taxman cometh.

Anyone can enjoy their life in one of Canada’s prettiest provinces.

Bank PEI beach days
It costs nothing to spend time on some of the best beaches in North America when you are on PEI. We have great beaches, most of them free and within 30 to 60 minutes of the city. Every day you take your family to a PEI beach you have saved almost $2,800 dollars.  
Here’s the calculation. A day on the beach in Florida will cost you $1,000 to $2,000 for a family of four. You have to earn that money and pay taxes on it so the real cost can be $2,800 per day before taxes.
PEI beaches are clean with white sand. They surround our Island. OK we have some jelly fish but not this year.
We have Parks Canada beaches that cost money unless you sneak in after the government employees go home. You should be at work during the day anyways. How are you going to retire wealthy if you don’t work?
We have nude beaches, busy and quiet beaches, beaches for surfing, kayaking, and beaches for sing songs, campfires and BBQs.

Abstinence builds empires
You need to bank those beach days and remember them in the winter when you might be tempted to fly south for a week in the sun, wasting your banked beach days. Take digital pictures or videos with a $99 camera during the summer.
You can’t retire wealthy if you are consuming money at the same rate as everyone else. Florida vacations are mainly funded with credit card debt and impulsive thinking – avoid both to become wealthy.
Wealth is created by spending less than you earn and investing it wisely. RRSPs are not wise (see Watch the taxman). Expensive vacations are not wise nor is most consumer spending.
Save 20% of your gross earnings. It sounds impossible but start at 5% this year and move it up 2% a year until you are banking 20%. It’s your money.
You don’t need to engage in theft, high-profile PNP patronage business or be a doctor to retire rich. Most millionaires are prudent people engaged in trades and small business. See The Millionaire Next Door. ( $10 or $12. )

Don’t keep up with the Joneses
The fancy houses, cars, SUV’s, plasma TVs and other signs of the good life are mainly funded with credit card debt. Laugh all the way to your growing bank account while the Joneses struggle with two high incomes and monthly worries over cash flow. Live reasonably but within your means.

The taxman cometh
You will lose more money to the taxman in your life than anyone else. He comes for income taxes, sales taxes, property taxes and hidden taxes.
This is too small a space to cover all the legal ways to lower your taxes but here’s a few. If you consume less you pay less GST, PST or HST. Don’t put money in RRSPs which are fully taxed when you take them out. They will also cause your retirement benefits to be clawed back. Invest in real estate or other capital gains that are taxed at lower rates.
PS – taxes spent on PEI beaches amount to a gas tax and PST, GST and liquor taxes on your drinks. Each day on a PEI beach probably costs you $20 in taxes. The Florida beach day costs more than $800 in taxes.
Click HERE to read more columns by Stephan Pate.

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