How to Decide When (and When Not) to Use Leverage To Build Wealth in Canada

Sep 17, 2025

They dig into a real entrepreneur’s situation to ask when borrowing actually helps build wealth. The conversation covers using permanent life policies for loans and when that can backfire. They compare borrowing from insurers versus outside lenders and explain why your primary residence often makes the simplest collateral. Timing, flexibility, and whether leverage truly creates growth are central themes.

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ANECDOTE

Entrepreneur With Tight Tax And Insurance Setup

Omar is a successful entrepreneur in his 70s with multiple integrated companies and careful tax planning.
He set up salary/dividend strategies, intercompany loans, and an IPP while owning a high early cash-value permanent life policy.

ADVICE

Don't Rehouse Debt Without Net Benefit

Don’t automatically borrow against corporate-owned life insurance to pay existing personal debt.
Only leverage the policy when the loan rate and net benefit clearly beat your current secured debt costs and fees.

INSIGHT

Policy Value Hinges On Time Horizon

A policy's value depends on runway; older owners have less time for cash value growth to compound.
That timing reduces the attractiveness of leveraging a long-standing permanent policy in one’s 70s.

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Is leverage always the golden key to building wealth—or can it sometimes hold you back?

Many entrepreneurs believe that using corporate or personal leverage is the ultimate strategy for unlocking cash flow and accelerating growth. But what happens when shifting debt from one pocket to another doesn’t actually improve your position? In this episode, we explore Omar’s story—an accomplished entrepreneur with multiple businesses, smart tax planning, and a well-structured financial system—who discovered that leverage wasn’t the answer he expected. If you’ve ever wondered whether you’re missing out by not tapping into leverage, this conversation may shift your perspective.

You’ll discover:

Why using corporate-owned life insurance for leverage can backfire if the timing isn’t right.
The crucial difference between leverage that creates growth and leverage that simply shuffles debt.
How to evaluate which assets are truly best to borrow against—so you protect cash flow without triggering unnecessary tax or fees.

Press play now to learn when leverage can propel you forward—and when it’s wiser to keep that ace up your sleeve.

Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.

Canadian Wealth Secrets Show Notes Page:

Consider reaching out to Kyle

…taking a salary with a goal of stuffing RRSPs;
…investing inside your corporation without a passive income tax minimization strategy;
…letting a large sum of liqui

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If you listen to podcasts like The Rational Reminder with Ben Felix & Cameron Passmore, The Canadian Investor, The Canadian Real Estate Investor, Build Wealth Canada with Kornel Szrejber, ChooseFI with Jonathan Mendonsa & Brad Barrett, Afford Anything with Paula Pant, The Ramsey Show with Dave Ramsey, BiggerPockets Money, The Money Guy Show with Brian Preston & Bo Hanson, Invest Like the Best with Patrick O’Shaughnessy, Masters in Business with Barry Ritholtz, The Wealthy Barber Podcast with David Chilton, Financial Audit with Caleb Hammer, In the Money with Amber Kanwar, The Loonie Hour with Steve Saretsky, or More Money Podcast with Jessica Moorhouse — we’re confident you’ll enjoy Canadian Wealth Secrets too.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.