5 Tricks of TFSA Millionaires

Tax-Free Savings Account (TFSA) millionaires do not usually “get lucky once” and call it a plan. They stack a handful of small advantages that most Canadians either forget, delay, or misunderstand, then they repeat them for years. The funny part is that none of the tricks sound exciting on their own, but just quietly multiply each other. A lot of seasoned investors miss them because they focus on stock picking, not on the boring mechanics that keep more of their returns compounding tax-free.

5 tricks

The first trick is front-loading contributions as early as possible, ideally in January, instead of drip-feeding them when you “get around to it.” Time in the market beats timing the market, and a TFSA rewards every extra month you give it. The second trick is using the TFSA for your highest-growth, highest-tax potential holdings, not your safest ones. In short, TFSA millionaires often put the biggest return engines in the TFSA so the government never touches the upside.

The third trick is treating TFSA room like gold as losses do not magically give you contribution room back. If you swing for the fences with speculative picks and blow up, that room can vanish forever. So TFSA millionaires usually take calculated risk, not chaotic risk, and they avoid overtrading. The fourth trick is staying ruthless about fees. A small fee difference looks tiny in year one, then it quietly becomes a giant drag over 20 years. Lower-cost products can feel boring, but boring is exactly what lets compounding show off.

The fifth and final trick is using withdrawals strategically, not emotionally. With a TFSA, withdrawals create new contribution room the following year, so you can “refill” after a planned withdrawal, but only if you time it properly and do not accidentally over-contribute. Advanced TFSA investors also use this to smooth retirement income since TFSA withdrawals do not count as taxable income. This helps avoid nasty surprises in government benefit calculations later on.

VGRO

Vanguard Growth ETF Portfolio (TSX:VGRO) fits this playbook as it makes the good behaviour easy. It’s an all-in-one exchange-traded fund (ETF) that holds a globally diversified portfolio with about 80% equities and 20% bonds, then rebalances automatically. You get exposure to thousands of companies across Canada, the U.S., and international markets, plus a bond sleeve that can soften drawdowns.

If you want a quick “numbers snapshot” for context, VGRO’s underlying equity sleeve spans roughly 13,600 stocks, and the portfolio has been priced at around 22 times earnings on a blended basis. That tells you two useful things. First, you are not buying a bargain-bin value fund. Second, you’re buying a broad growth-tilted global portfolio that can still generate some income while it compounds. The biggest risk is behavioural, not financial, since investors bail after a bad year and miss the rebound.

The last year brought a notable win for long-term investors: Vanguard cut VGRO’s management fee effective Nov. 18, 2025, from 0.22% to 0.17%, which helps compounding without you lifting a finger. Performance also reminded investors why a simple global mix works. VGRO delivered an annual total return of about 17% in 2025, following a strong 2024 as well. It also continues to pay a quarterly distribution, currently at around 1.9%, depending on markets. That would bring in solid cash flow from even $25,000.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTVGRO$44.82557$1.97$1,098.44Quarterly$24,964.74

Bottom line

TFSA millionaires usually do not have a secret stock, but a repeatable system. They contribute early, protect contribution room, keep fees low, and hold long enough for compounding to get ridiculous. VGRO will not make you a millionaire overnight, but it can make it easier to stick to the five tricks that actually get Canadians there. The opportunity is not flashy, but consistent, tax-free momentum that you refuse to interrupt.

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More reading

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.