Christopher Liew: Is financial freedom still realistic for most Canadians?

(Hanna Pad / Pexels.com)

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Between the pressure of soaring housing costs, inflation eating away at savings, and high interest rates driving up consumer debt, many are beginning to view the dream of financial independence as unachievable.

While achieving true financial freedom has certainly become more challenging, it’s not impossible. You just have to be willing to make some short-term sacrifices, prioritize investing, and learn to be smarter with your money.

Financial freedom can feel unrealistic

Imagine a life where you could wake up and choose to do whatever you felt compelled to do. Not because it was your day off or a holiday, but because you didn’t have to work. Maybe you have a job or hobby, or run a business because you enjoy it. Ultimately, though, your decisions are your own, and your finances won’t crumble under you if you miss a couple of days.

A person who’s achieved financial freedom has reached a financial level where their decisions are no longer driven by the need to work and pay bills, with just a little slice left over to enjoy life.

With 49 per cent of working Canadians living paycheque to paycheque, the dream of a free life can seem unrealistic.

Equifax reports that an increasing number of young consumers are missing card payments and experiencing difficulty keeping up with their monthly living expenses. To top it all off, the average home price in Canada is $676,154, making home ownership seem like its own insurmountable goal.

Tips to help you achieve financial freedom

If you’re willing to look past the current economic challenges, though, it is still possible to earn your freedom with the right strategy.

Outside of winning the lottery or inheriting a large sum of money, there are only a few paths to achieve true financial freedom:

• investing;
• creating a passive income business; and
• receiving a pension.

While they were once very common in decades past, pensions aren’t the reliable safety net that they once were.

Companies frequently go bankrupt, turning a once-reliable job and pension opportunity into a dead end with no payout. In some unfortunate cases, a company may find a vague reason to let go of an employee right before they finish their employment term and earn their pension.

If you want to be truly in control of your future, investing or creating a business that can run largely by itself are the two most reliable paths to take. With that in mind, here are some tips to help you reach financial freedom faster.

1. Maximize tax-advantaged contributions

Tax-advantaged accounts like a Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), or even the First Home Savings Account (FHSA) are great ways to legally pay less taxes and invest in your future.

The TFSA, in particular, is an excellent tool to begin building wealth, as you’re not required to pay a single dollar of capital gains tax on any income earned through your investments.

While there are limits to how much you can contribute each year to your TFSA, maximizing your contribution room is one of the best ways to begin building wealth.

2. Focus on reliable investments

Whether you’re investing in your TFSA or a standard revenue account, I encourage a more conservative investment strategy. It’s easy to see people on the internet getting rich off of crypto and meme coins, but these are one-in-a-million cases.

Instead, focus on proven, long-term investments that will steadily grow and offer compounding interest and dividends over the course of years or decades. Exchange-traded funds (ETFs) and robo-advisors are great ways to diversify your portfolio.

3. Lower your standard of living

If you want to grow your investments quickly, lowering your standard of living is a sacrifice that’s worth making. Downgrade to a lower-cost apartment or car, stop going out and eating out as often, and don’t spend money on unnecessary accessories. The extra hundreds (or thousands) of dollars you save each month can be poured into your investments.

4. Start a business

Starting a business can be one of the most powerful paths to financial freedom. The biggest advantage is that a good business is scaleable, which means your income isn’t limited by your own time. There’s always a chance to hit a home run if things take off.

You don’t need something overly complicated either. Even a simple business that runs efficiently in the background can generate profit while you continue working your regular job. That extra profit can then be reinvested to help you reach financial freedom faster.

Just remember that every business comes with risks. Without a clear plan, it can drain your money and slow your progress.

But the right small business can unlock opportunities no job ever could and accelerate your journey to financial freedom.

5. Move to a low-cost country

Many Canadians are leaving Canada, with some citing the crushingly high cost of living. Obtaining financial freedom in Canada requires significantly more money and resources than in many other countries. In places in Southeast Asia or Latin America and certain parts of Europe, you can have a great quality of life for a fraction of what it would cost you in Canada.

If you’re lucky enough to have a decent-paying online job, are able to remotely manage your business, or earn investment income, retiring to a country where your dollar stretches further can be a great way to experience more freedom and a better quality of life.

Final thoughts

Financial freedom may feel harder to reach today, but it’s far from impossible. While current economic challenges mean the path looks different than it did a generation ago, the core principles haven’t changed. Live within your means, save consistently, and invest with a long-term mindset.

Even small steps compound over time. With discipline, patience, and a willingness to adjust along the way, financial freedom remains a realistic goal for anyone committed to pursuing it.