How to Save for Your Financial Goals
Your financial goals are unique to you. Some will be short-term – like buying a home or putting savings aside that allows you to have peace of mind. Other goals may be long-term, and stretch into your concept of a great retirement. If you’ve already taken time to identify your financial goals, the next step is to create an investment plan or strategy to reach them.
In this blog post, we outline several tools that can make your savings work for you, as well as address the common misconceptions that investing is ‘too hard’ or ‘only for the wealthy’.
Identifying as an Investor is Important
In 2019, the BCSC released survey results which revealed that Canadians have trouble seeing themselves as investors. Less than one third of those surveyed thought the term ‘investor’ described them well, and surprisingly only 40% who held investments identified as investors. On the surface, this may seem unimportant, but it actually 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 fees and charges associated with their investments. The reality is the majority of British Columbians are already investors – the survey results showed that over 80% of British Columbians hold investment products.
The idea that investing is ‘too hard’ or ‘only for the rich’ is a myth we all need to dismiss. You don’t need to be an experienced day trader or wealthy to begin investing. You can invest in the same way that you save… by contributing consistently over time. With minor alterations, a savings habit can be turned into an investment strategy.
You May Already Be Familiar with These Types of Investment Accounts
Many Canadians put money into investment accounts every year.
Two common accounts that Canadians invest their money in are Registered Retirement Savings Plans (RRSPs) and Tax Free Savings Accounts (TFSAs). RRSPs are accounts registered with the Canada Revenue Agency (CRA), that help you save for retirement. TFSAs are accounts which allow you to save your earnings for long or short-term financial goals.
If you have either of these accounts, you may already be an investor.
You can find out more about the types of investments that can be held in an RRSP, TFSA, or other investment accounts in our Types of Accounts section.
How to Make Informed Investing Decisions
The good news is that you don’t have to go through your investing journey alone. Registered investment advisors can help you identify and reach your financial goals through informed decisions and strategies.
Your registered investment advisor will be able to answer your questions related to different investment types, and determine what kinds of investments suit your financial needs. They can also help you understand the costs associated with your investments, how these costs can affect your returns, and what level of risk is appropriate for you.
Here are some great resources to help you become an informed investor:
- A Simple Guide to Understanding RRSPs | InvestRight.org
- Opening Your Retail Account Guide | Investment Industry Regulatory Organization of Canada
- Registered Retirement Savings Plan | CRA
- Tax-Free Savings Account Guide for Individuals | CRA
- The Tax-Free Savings Account | CRA
- Getting Started With a Registered Investment Advisor | InvestRight.org
- Know Your Advisor | InvestRight.org
Report a Concern
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393, or through e-mail at [email protected]. You can also file a complaint or submit a tip anonymously using BCSC’s online complaint form.