Saving & Investing
Saving means putting money aside gradually for purchases and emergencies. Saving money in a typical bank account will allow you to earn interest and make small gains on your deposit over time. Putting your money into a savings account involves little to no risk.
Investing is a way people try to earn more than the interest a savings account provides by purchasing investments. There is more risk involved, but history shows that a disciplined, long-term investing strategy can grow a person’s savings, increasing their wealth over time.
Are You an Investor or a Saver?
BC Securities Commission (BCSC) research shows that British Columbians, even those with investments, have trouble seeing themselves as “investors”.
Identifying as an Investor is Important
It makes a big difference when it comes to managing your financial goals.
People who identify as investors are more likely to understand the risks and benefits of their investment(s), be on track to meet their investment goals, and have an understanding of the fees and charges associated with their investments.
You Are an Investor if…
You have placed money in any type of account or product that has the potential to earn more than the interest a traditional savings account provides.
Investors purchase stocks, bonds, mutual funds, exchange-traded funds (ETFs), and other investments. Many investments can also be purchased through registered accounts, such as Registered Retirement Savings Plans (RRSPs) and Tax-Free Savings Accounts (TFSAs).
Common types of investments include:
You Are a Saver if…
You only put your money in a savings account and nowhere else.
Savers put money aside in a typical bank account for purchases and emergencies without the expectation of it gaining large sums of interest. Canadian savers can also use TFSAs and RRSPs as savings accounts.
Common methods of saving include:
- Bank savings accounts
- High-Interest Savings Accounts (HISAs)
Understand Your Financial Goals
Whether you’re an investor or a saver, make sure you understand your financial goals and time horizons. You’ll want to use the right money strategy to help you reach those goals.
If you decide investing is right for you, get started by giving careful thought to:
- your knowledge of financial markets and products.
- your financial assets and your risk tolerance.
- the amount of money you plan to invest.
- what you want to accomplish through investing.
You may also want to work with a registered investment advisor to help you come up with a plan and investment strategy.
With all of this in mind, you’ll be able to begin the process of selecting the right investment products and the right mix of assets to help you meet your financial goals.
Recognize Your Limits
Before investing, you should assess your own investment knowledge and experience. Be honest with yourself and with your registered investment advisor. Overestimating your investment knowledge will make it far more difficult for your advisor to help you.
Avoid committing to investment products or strategies you don’t fully understand. Always ask your investment advisor questions about unclear or unfamiliar recommendations, and be sure you understand the answer before investing.
Build Your Knowledge
If you’re new to investing, go to our Get Started with Investing resource. It’s a free, online resource that provides basic information on how to get started with investing.