When your pay lands, part of it goes to your future goals first: say $500 of every $10,000. It's hard to spend money that isn't there, and by Parkinson's law, an old adage, spending rises to meet whatever is available. So automate the transfer. More in EP 004, Rich vs Wealthy.
Once you've built some wealth, private markets open up, and part of the appeal is that it feels exclusive. Many private funds are sold under the 'accredited investor' exemption. For an individual in Canada, that generally means personal net income before tax over $200,000 in each of the last two years (over $300,000 with a spouse), or financial assets like cash and investments, not real estate, over $1 million after related debts, or net assets of at least $5 million. A corporation can qualify with net assets of at least $5 million. Some private funds are also sold to non-accredited investors through an offering memorandum, with purchase limits in most provinces. Qualifying means you can be offered these products. It doesn't make them a better fit.
You pay more for less chocolate. With private equity, the extra cost is the fees. A January 2026 review by the Private Equity Stakeholder Project, a non-profit watchdog that is critical of the industry, looked at the 15 largest private equity 'evergreen' funds sold to individual investors, mostly in the US. Their expense ratios ran from about 3% to 5.2% a year, with a median of 3.76%, before any sales charges. Broad index ETFs and lower-cost mutual fund series commonly charge well under 1% a year.
You can't see what's inside. Private companies don't publish anything. A private fund reports to its own investors, often quarterly, and the values in those reports are estimates, not prices someone actually paid.
It's hollow. A 2020 study by Oxford professor Ludovic Phalippou found that, after fees, private equity funds returned about the same as large public stock indices from 2006 to 2019. People in the industry dispute the benchmark, so treat it as one well-known finding, not the last word.
It's hard to get out of. Traditional private equity funds commonly lock money up for 10 years or more. Newer 'evergreen' funds allow withdrawals, but usually only a limited amount each quarter, and the manager can suspend them. That's called a gate.
The $80 billion figure in the episode, and the $30 billion Scott calls back to in the second story, are for Canadian private real estate funds, not private equity. Bloomberg reported in January 2026 that about C$30 billion, almost 40% of the roughly C$80 billion invested in Canadian private real estate funds, was locked up, with managers limiting withdrawals. We don't have a comparable figure for private equity.
You won't agree on everything, and you don't have to. Agree on the goals you share, and each keep some guilt-free spending of your own. More in EP 008, Money, Marriage & Communication.
Bag one: the RESP. You buy the candy, and the neighbour tips in 20% more. An RESP gets a 20% government grant on the first $2,500 you put in each year: up to $500 a year per child, and $7,200 per child over a lifetime. $2,500 a year is the amount that gets the full grant, not a limit on what you can put in. The lifetime contribution limit is $50,000 per child.
The 7–8% a year mentioned in the episode is illustrative, not a forecast. Returns aren't guaranteed. For long-term planning we use FP Canada's 2026 assumptions, which work out to about 5% a year before fees for a balanced mix of stocks and bonds.
When your child goes to post-secondary, the grants and the growth come out as your child's income, and most students pay little or no tax on it. The money you put in comes back tax-free, because you'd already paid tax on it.
Missed some years? You can catch up one extra year at a time: $5,000 in a year gets $1,000 of grant, the most it pays in any one year. The grant stops at the end of the year your child turns 17, and there are extra conditions at 16 and 17, so the sooner you start catching up, the more of it you can collect.
Bag two: the TFSA. You buy the candy with after-tax dollars, it grows tax-free, and nobody taxes you to eat it.
In the episode we said total TFSA room would be $109,000 in the new year. $109,000 is the 2026 total, available now, for someone who has been 18 or older and living in Canada since 2009 and has never contributed. The 2027 limit is set by the CRA, usually in November, and is added on 1 January.
Room builds every year from the year you turn 18, for each year you're a resident of Canada. If you lived outside Canada for a while, your room may be lower. Unused TFSA room carries forward, so if you've contributed $50,000 and your total room is $109,000, you can put the other $59,000 in at once. Anything you take out is added back to your room on 1 January of the next year, not straight away. Check your room in CRA My Account before a big deposit, because going over costs 1% a month.
Funding your TFSA from your corporation means paying yourself a salary or dividend and paying personal tax on it, which at higher incomes can be close to half of what comes out. Most of that is tax you'd pay anyway when the money eventually leaves the corporation. What you give up is the deferral. In return, the growth is never taxed again, and withdrawals don't count as income. Over long periods, that usually comes out ahead of leaving the money invested in the corporation, where investment income is taxed along the way and again when it's paid out to you. It isn't automatic. It depends on your tax rate now versus when you'd take the money out, how long it stays invested, and what the corporation holds. A lower-income year is often the best time to do it. Run the numbers for your own situation first.
One client held a private investment that stopped paying its monthly distributions. When they decided to sell, they couldn't. Another client came to us holding private funds that were gated when we went to sell, and nearly two years on they still can't get out. The cost isn't a number we can calculate. It's not having access to your own money, and not knowing when you will.
The one thing: the best treats are the plain ones anyone can open, and qualifying for something exclusive doesn't make it a better fit.
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General education, not personal tax or investment advice.
Listen to episode 056 of The Chiro Money Show →
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