{"id":386750,"date":"2026-04-19T03:59:13","date_gmt":"2026-04-19T03:59:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/386750\/"},"modified":"2026-04-19T03:59:13","modified_gmt":"2026-04-19T03:59:13","slug":"5-money-habits-cost-him-over-c1m-canadians-should-avoid-these-wealth-draining-traps","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/386750\/","title":{"rendered":"5 money habits cost him over C$1M \u2014 Canadians should avoid these wealth-draining traps"},"content":{"rendered":"

\"Humphrey Humphrey Yang <\/p>\n

Humphrey Yang \u2014 who spent years as a financial advisor and now shares personal finance advice with millions of followers online \u2014 recently took to his Youtube channel to review his money habits from his 20s and early 30s and calculate what they actually cost him.<\/p>\n

The number he landed on was sobering.<\/p>\n

\u201cFor 10 years I thought I was being smart\u2026 when in fact there were five things I was doing subconsciously that ended up costing me a lot of money,\u201d he said. \u201cSome of these mistakes will eventually cost me $750,000 or more over the course of my career (1).\u201d<\/p>\n

For context, US$750,000 is the equivalent of over C$1 million at current exchange rates \u2014 a number that illustrates how seemingly harmless financial habits can cost you more than you anticipate over time.<\/p>\n

Here are the five common bad habits that derailed Yang\u2019s finances \u2014 and what Canadians can learn from them.<\/p>\n

In his early 20s, Yang thought the only way to truly build wealth was to join a hot company before it went public, or launch his own business. Steady, boring investing felt pointless.<\/p>\n

It wasn\u2019t until later that he recognized his mindset was a costly mistake.<\/p>\n

\u201cWhat I completely neglected from the ages of 21 to 26 was investing in index funds,\u201d he said. \u201cI didn\u2019t really understand that 8% was quite a lot and I thought it was a little bit boring (1).\u201d<\/p>\n

However, that \u201cboring\u201d approach has a strong track record. Canada\u2019s main stock market benchmark, the S&P\/TSX Composite Index, represents about 70% of the Toronto Stock Exchange (TSX) by market value. Since 1998, it has returned more than 8% a year on average since 1998 (2). Additionally, from 1971 to 2021, the average annualized return was approximately 7.94% (3).<\/p>\n

Canadian investors also have access to S&P 500 index funds and exchange-traded funds<\/a> (ETFs) through registered accounts such as a Tax-Free Savings Account<\/a> (TFSA) or a Registered Retirement Savings Plan<\/a> (RRSP), which can provide exposure to both Canadian and U.S. equity markets within a single portfolio.<\/p>\n

Read more: Here are 5 essential moves to make once you\u2019ve saved $10,000<\/a><\/p>\n

Yang\u2019s upbringing also played a role in keeping him out of the market. He credits a deeply ingrained fear of losing money \u2014 shaped by his father\u2019s experience growing up poor in war-torn China \u2014 as a key driver of what he calls a \u201cscarcity mindset around money.\u201d<\/p>\n

\u201cWhat people don\u2019t tell you online is that a lot of your beliefs and behaviours around money are inherited from your parents,\u201d he said.<\/p>\n

For Yang, that caution carried a real price tag. \u201cEven if I had just invested $500 a month\u2026 that would have been around $31,000 in total for those five years that I wasn\u2019t investing,\u201d he said. \u201cIf I just left it alone in a basic S&P 500 index fund, by the time I\u2019m 65, it would be worth anywhere from $750,000 to over a million (1).\u201d<\/p>\n

The math holds up for Canadian investors, too. Five years of C$500 monthly contributions into a TSX index ETF \u2014 left to compound at an 8% average annual return \u2014 would grow substantially over a multi-decade timeline. Inside a TFSA, that growth would be entirely tax-free.<\/p>\n

When Yang finally started investing, he still kept the majority of his savings in cash. The problem wasn\u2019t only fear \u2014 it was the absence of a plan.<\/p>\n

\u201cAsk yourself, what is every dollar for. \u2018Just in case\u2019 should not be an acceptable answer,\u201d he said. \u201cBut let\u2019s say you want to save for a down payment on a house in two or three years. That would be acceptable. Anything that doesn\u2019t have a purpose should be invested or at least sitting in a high-yield savings account.\u201d<\/p>\n

In Canada, that means a high-interest savings account<\/a> (HISA) \u2014 which earns more than a standard savings account while keeping your money fully accessible. As of late March 2026, some of the most competitive non-promotional HISA rates in Canada ranged from 2.25% to 2.80% annually (4).<\/p>\n

The concept behind these accounts align with Yang\u2019s advice: Every dollar should have a purpose. For example, emergency fund dollars belong in a HISA. Short-term goal dollars belong in a HISA or a guaranteed investment certificate<\/a> (GIC). Long-term wealth-building dollars belong in the market \u2014 ideally inside a TFSA or RRSP to maximize tax efficiency.<\/p>\n

Yang spent years thinking that staying out of the market was the safe choice. He later came to see it differently: The real \u201cwealth killer\u201d isn’t volatility \u2014 it\u2019s inflation chipping away at the purchasing power of idle cash.<\/p>\n

\u201cInflation erodes your purchasing power by about 2.5 to 3% every year. So, in about 24 years that means you will lose about half the value of your purchasing power in dollars,\u201d he said. \u201cAnd\u2026 if your money isn\u2019t invested in anything, well, that money could be working for you elsewhere, earning you actual money.\u201d<\/p>\n

Statistics Canada reports that the annual average Consumer Price Index (CPI) change in 2025 was 2.1%, with the 12-month rate falling to 1.8% as of February 2026 (5). While that\u2019s currently below Yang\u2019s 2.5% to 3% figure, the principle stands: Cash that\u2019s sitting in a low-interest account loses real purchasing power for every year inflation runs above the account\u2019s interest rate. The Bank of Canada, a Crown corporation responsible for monetary policy, targets 2% inflation over the medium term \u2014 meaning even in a stable environment, uninvested cash slowly devalues over time (6).<\/p>\n

Yang also links his late start in investing to who he spent time with. In his early 20s, his social circle simply didn\u2019t talk about money or wealth building.<\/p>\n

\u201cTry taking a look at the people that you surround yourself with. If none of them are talking about wealth building or investing, you might want to look at different online communities or in-person where people are having these conversations that you really want to be a part of,\u201d he said.<\/p>\n

That doesn’t mean cutting off old friends, Yang adds \u2014 it means expanding your circle to include people and communities where financial literacy is part of the conversation.<\/p>\n

Whether you recognize one or all five of Yang’s money habits in yourself, here are concrete steps to course-correct:<\/p>\n

1. Open a TFSA if you haven\u2019t already. The TFSA allows Canadians 18 and older to contribute up to $7,000 a year (2025 and 2026 limit), with all investment growth and withdrawals completely tax-free. Unused contribution room carries forward indefinitely. For many Canadians, the TFSA is the best first place to start investing for any goal \u2014 retirement, a down payment or general wealth building.<\/p>\n

2. Start with a low-cost index ETF. If you\u2019re overwhelmed by where to start investing, a low-cost ETF tracking the S&P\/TSX Composite Index (or a global index including both Canadian and U.S. equities) is one of the simplest, most evidence-supported starting points for long-term growth. You don\u2019t need to find the next hot stock \u2014 you only need to be in the market, consistently, over time.<\/p>\n

3. Give every dollar a job. Follow Yang\u2019s framework and categorize your cash:<\/p>\n

Emergency fund (three to six months of expenses) \u2192 HISA<\/p>\n

Short-term goals (one to three years) \u2192 HISA or GIC<\/p>\n

Long-term wealth \u2192 TFSA or RRSP, invested in diversified funds<\/p>\n

4. Maximize your RRSP if you\u2019re in a higher tax bracket. RRSP contributions reduce your taxable income in the year you contribute. If you\u2019re currently in a higher tax bracket and expect to be in a lower one at retirement, the RRSP offers immediate tax savings plus decades of tax-deferred growth. Your contribution limit is 18% of your previous year\u2019s earned income, up to the annual maximum set by the Canada Revenue Agency (CRA) \u2014 which in 2026 is $33,810.<\/p>\n

5. Audit your financial beliefs. Yang\u2019s story is as much about psychology as it is about math. If you find yourself avoiding the market out of fear, or feeling like \u201creal\u201d wealth is only for people who get lucky \u2014 those beliefs are worth examining. Talking to a fee-only financial adviser, joining an investing community or simply tracking your spending for 30 days can shift your relationship with money significantly.<\/p>\n

\u2014 with files from Melanie Huddart<\/p>\n

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n

Youtube (1<\/a>); S&P Dow Jones Indices (2<\/a>); Questrade (3<\/a>); Ratehub.ca (4<\/a>); Statistics Canada (5<\/a>); Bank of Canada (6<\/a>)<\/p>\n

This article originally appeared on Money.ca<\/a> under the title: Former advisor: 5 money habits cost him over C$1M \u2014 Canadians should avoid these wealth-draining traps<\/a><\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Humphrey Yang Humphrey Yang \u2014 who spent years as a financial advisor and now shares personal finance advice…\n","protected":false},"author":2,"featured_media":386751,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[46782,138,275,200415,22004,3205,246,3356,188352,111,139,69,244,245],"class_list":{"0":"post-386750","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-build-wealth","9":"tag-business","10":"tag-canada","11":"tag-canadian-investors","12":"tag-canadians","13":"tag-dave-ramsey","14":"tag-finance","15":"tag-financial-advisor","16":"tag-humphrey-yang","17":"tag-new-zealand","18":"tag-newzealand","19":"tag-nz","20":"tag-personal-finance","21":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/386750","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=386750"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/386750\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/386751"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=386750"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=386750"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=386750"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}