My 7-Year Plan to One Million Dollar

I am one of those people who would like to have a well thought out plan before tackling anything. Instead of just jumping into things head on, I like to deconstruct the process first. This is no different for my goal to achieve one million dollar by the year 2020.

Some people may say that my goal of one million dollar within a 7-year time frame is very if not too ambitious. However, after spending all week crunching the numbers, I have been reassured that this endeavour is quite feasible. In an overview, this is how my financial timeline currently stands:

2014 – $40,000
2015 – $85,000
2016 – $150,000
2017 – $275,000
2018 – $450,000
2019 – $700,000
2020 – $1,000,000

Distribution of Net-Worth

My plan to achieve a net worth of one million dollar is divided into 6 main sectors. Although they are all equally vital to my success, they hold different weight. This is how I plan on distributing the one million:

  • Cash – 2%
  • Tax Free Savings Account (TFSA) – 10%
  • Registered Retirement Savings Plan (RRSP) – 10%
  • Non-Registered Account – 10%
  • Business – 12%
  • Property – 56%

overall finance chart

Tax Free Savings Account ($100,000)

The TFSA is a registered account that provides growth in investments without being subjected to tax. Although I am not familiar with how banking in the U.S works, the TFSA should be similar to the Roth IRA except with some minor differences. For those who are interested in learning more about TFSA, I have written a post about it in the past.

tfsa plan chart

Assumptions made on the chart:

  • Contribution limit will increase by $5,500 every year
  • 8% return rate on investment from 2014 to 2017, 10% return rate from 2018 to 2020
  • Knowledge of stock trading increases to achieve the 10% return rate by 2018
  • Assumes contributions are made at the start of the year

Return on Investments

Although it is hard to predict how well the market will perform from 2014 to 2020, the return rate is only a targeted growth for that year. I have taken into account that some of these years may underperform while others may perform better. In any case, the average targeted growth for all 7 years should be around 9%.


To achieve a TFSA portfolio value of $100,000, I will be required to contribute $5,500 every year into my account. Assuming that I have already maximized my portfolio which I am already close to doing, I will only need to contribute $33,000 over a period of 6 years. I don’t see how that will be any obstacle.

Of course, the other requirement is that I achieve a targeted average of 9% growth over the 7 years. This will be more of a challenge. I can either start increasing my knowledge in stock trading or put all my money into an index fund. However, I don’t think I’ll hit my targeted growth should I go with the second option. Guess it is time I start hitting the books!

Registered Retirement Savings Plan ($100,000)

The second tax-free account available to Canadians is the Registered Retirement Savings Plan. For those who are in the U.S, the RRSP is similar to the 401K. Unlike the TFSA, withdrawals from the RRSP will be subjected to tax. This shouldn’t be that big of problem because by the time I withdraw from my account, I should be in a lower tax bracket.

rrsp plan chart

Assumptions made on the chart:

  • Contribution room will increase
  • 8% return rate on investment from 2015 to 2017, 10% return rate from 2018 to 2020
  • Knowledge of stock trading increases to achieve the 10% return rate by 2018
  • Assumes contributions are made at the start of the year


The biggest question in terms of my RRSP section of the plan is the contributions. Since I am only allowed to contribute 18% of my income every year into my RRSP, I may not meet my contribution goal.

This shouldn’t be a problem right now because I have a full time job. However, at some point of my financial journey, I plan on quitting my job to start up my own business. I am unsure if I can pay myself enough of a salary to meet my required contribution for the year. This will be something I will look into more closely when that time comes.


Similar to the TFSA, there are two requirements for the RRSP. The first requirement is a total contribution of $73,500 over a 7 year time-frame. Although my company offers match contributions to my RRSP, I have every intention to quit in the near future.

Increasing my knowledge in stock trading is also vital in achieving the 9% average growth in my RRSP and  non-registered account.

Non-Registered Account ($100,000)

The non-registered account is potentially my fourth sector in the plan. I say potentially because unlike the TFSA and RRSP, a non-registered account is subjected to capital gain tax. The upside to it is that this account has no contribution limit.

With that being said, I am also not a big fan of being so exposed to taxes. In the future, I may just eliminate the non-registered account from my plan completely and allocate the $100,000 into the other sectors. For the time being, I’ll just include it until I look into this further.

non-registered plan chart

Assumptions made on the chart:

  • 8% return rate on investment from 2016 to 2017, 10% return rate from 2018 to 2020
  • Knowledge of stock trading increases to achieve the 10% return rate by 2018
  • Assumes contributions are made at the start of the year
  • Total should amount to $100,000 after taxes

Business ($120,000)

The business section is the biggest question mark in my 7-year plan. At the present moment, I don’t have much to say about it except that I will be starting one. The plan is to get it launched by 2015 or at the very latest early 2016. Initially, I will be very involved in the business but the ultimate goal is to turn it into passive income.

Although, I have a few ideas of where I want to go with this, I am still in the planning stage. All I know for sure is that starting my own business is crucial in my journey to one million dollar. I will post updates as soon as I have any.

business plan chart

Property ($560,000)

By the start of next year, my friend (who actually got me interested in personal finance) and I will be coordinating in a joint effort to start investing in real estate.

The plan is to start looking around for properties around the $250,000 price range that have the opportunity to be cash flowed (rented out). Each of us will put down half of the $50,000 (20% required) for the down payment.

The ultimate goal by the end of 2019 is to have 5 properties of which 4 are rented out. This will put me and my friend at a net worth of $625,000 each in the property sector.

property plan chart

Assumptions made on the chart:

  • Every new property has a value of $250,000
  • The joint effort is between my friend and I only
  • The first property investment is in 2015
  • Property will be sold at a higher price

Calculation of Property Net-Worth

When calculating net worth on our property investments, I consider all cash flowed properties to be the full property value. The reason for this is because the rent will pay for the mortgage. This is why when a property is rented out; both of our net worth will increase to $125,000 each. My total property net worth number also takes into account of the initial down payment required, positive cash flow from rent and assumes that the property will be sold at a slightly higher price. Am I being too generous with myself? : )

No Property in 2020

I have left the year 2020 empty chart for a couple of reasons. The first being that one of the years leading up to then may not be a good time to invest in real estate. If this is the case, I will have an extra year to get up to 5 properties in total. The second is because my friend has a goal to achieve one million by 2019 and the year is irrelevant.

Final Thoughts

This concludes my 7-year plan to one million dollar. Although it is far from being perfect, I am glad that I have finally crunched some numbers and have a place to start. I am almost certain that I will come back to this post in the future and tweak it around as my knowledge in personal finance increases. Stay in touch until then!

What do you think of my 7-year plan? Do you have a plan to financial freedom? I would love to read all about it and maybe get some ideas. Feel free to link it in the comments if you have one!

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9 Responses to “My 7-Year Plan to One Million Dollar”
  1. Henry - Living At Home October 30, 2014
    • Jeff W. October 30, 2014
  2. Tawcan November 5, 2014
  3. Chris November 6, 2014
    • Jeff November 6, 2014
  4. DividendLife November 20, 2014
    • Jeff November 21, 2014
  5. Financial Samurai January 13, 2016
    • Jeff @ Million Endeavour January 22, 2016

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