saving & investing. why save? to buy something in the future to have emergency funds to build...
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Ways to Save 1.Reduce spending on ‘wants’ 2.Pay yourself first – every time you get paid, pay yourself 10% of your net pay!Pay yourself first 3.Do your research 4.Read all you can 5.Talk to Certified Financial Planners 6.DO IT NOW! Savings account GICs Bonds Stocks/mutual fundsTRANSCRIPT
Saving & Investing
Why Save? To buy something in the future To have emergency funds To build up money to invest To have options – school, work,
travel, etc.
“Stow your money”
Ways to Save1. Reduce spending on ‘wants’2. Pay yourself first – every time you get
paid, pay yourself 10% of your net pay!3. Do your research4. Read all you can5. Talk to Certified Financial Planners6. DO IT NOW!
Savings account GICs Bonds Stocks/mutual funds
What is Investing? Buying assets which you believe will
increase in value Make your money WORK for you
instead of YOU working for your money
Afford things you want in the future Be able to chose what you want to
do – have options! “Grow your money”
Pros & Cons of Saving/Investing
Examples Pros Cons
SavingSavings accountGICs, Canada Savings bonds
Extremely safe Money is guaranteed at
chartered banks up to $100,000
Different liquidity options – may have easy access to money if required
Very low return If interest rate is less
than inflation rate money loses its purchasing power
Interest paid on savings accounts is the lowest rate paid on all types of investments
Investing
Stocks, mutual funds, bonds, real estate and collectibles
Often results in a higher rate of return
Investments can grow at or exceed the inflation rate
Can make a lot of money
Returns are not guaranteed
Risk of losing part of or all the money you have invested
3 things to keep in mind: Rate of Return or ‘Yield’ How much you get back from an investment. This refers to the interest or dividends received from a security (usually expressed annually as a percentage).
Liquidity The measure of how fast someone can convert their investment into cash. For example, cash is the most liquid, whereas bonds and GICs may not be cashable for 1 year (or longer).
Risk The uncertainty in how much of an investment could be lost.
Inflation As time passes, and the costs of goods increase, a dollar will buy less than it did ONE year ago.
For example, the inflation rate in Canada in October was 2.4%. If you put your money in a savings account that makes less than the inflation rate – you are essentially LOSING money.
Bank of Canada inflation calculator
GICs, CSBs
What type of Saver/Investor are YOU?
Stock vs Stuff
Stock vs Stuff
Stock Vs Stuff