Be a Smart Financial Consumer #FLM2019

Think about your financial goals

Savings and investments can help you reach your financial goals. It's a good idea to write your goals. To find the investments and investments that are right for you:

  • set goals, such as savings for retirement or a down payment for a home, and prioritize those goals

  • set a dollar amount for each goal

  • set a timetable to reach your goals

As your life changes, so do your financial goals. Review your savings and investment plans regularly. Remember that it is usually best to pay your debts first, because the interest you pay on these debts is usually higher than what your investments produce.

To begin, complete the "My Investment Objectives" worksheet.

Get tips on how to manage your debts and make a plan to be debt free.

Set a date to reach your goals

Your goals can be:

  • short term (2 years or less)

  • medium term (3 to 5 years)

  • long-term (6 years and older)

The time you have to reach your goals can affect how you save and invest.

Saving and investing in the short term

If you're saving for an emergency fund or a major purchase within a year or two, you can focus on your savings. The goal is to protect your money, while keeping it easily accessible.

Options for savings and short-term investments

  • savings accounts

  • short-term deposits

  • short-term guaranteed investment certificates ( GICs )

  • cashable savings bonds

Ask your financial institution or financial advisor about the types of short-term investments they offer and how they work.

Saving and investing in the long term

If you are saving for a long-term goal, such as your retirement, a wide range of investments and savings are within your reach.

Long-term investment options

  • bonds, such as Canada Savings Bonds

  • mutual funds

  • index deposit accounts

  • the actions

  • long-term deposits

  • Guaranteed Investment Certificates ( GICs )

Note that some investments are complex and pose risks. Talk to an investment professional or financial advisor to find the investments that are right for you.

Long-term savings options

  • Registered retirement savings plan ( RRSP )

  • Registered Education Savings Plan ( RESP )

  • Registered Disability Savings Plan ( RDSP )

  • Tax-Free Savings Account ( TFSA )

Find your comfort zone against risk

Many investments offer the potential for higher rates of return, but have some level of risk. This risk becomes more acceptable if your goals are long term because you have more time to recover any financial loss.

Your degree of risk tolerance depends on your emotional disposition to accept risk and your financial ability to absorb losses. This is called risk tolerance or risk appetite.

There are many types of risks, including:

  • the risk of losing money if domestic or global markets decline

  • the risk that an investment can not be traded quickly enough to avoid a loss

  • the risk that the return on your investments may not be high enough to keep up with the rate of inflation

  • the risk of investing in certain types of businesses, such as those in a non-regulated industry

A greater risk may be acceptable if your goal is longer term. This is the case because you have more time to recover your financial losses.

Decide to invest alone or not

You can invest alone if:

  • you trust your investment knowledge

  • you have time to follow the evolution of the financial markets

Many people work with a financial advisor or planner to help them plan and achieve their financial goals.