As a young professional or business owner living in Orillia, Barrie or Cottage Country, you may be worried about the basics of your financial life, like budgeting and saving. While four in five millennials have started saving for the future, only one in two millennials are investing.1
Whatever your age, investing can be an intimidating endeavour. Because of this, it’s possible you’ve put off investing or haven’t given it much consideration. Regardless of where you currently stand with investing, here are five tips to help you get started and make sure that you are on the right track.
Tip #1: Start Early
You don’t need to be earning six figures in order to start investing. If you’re able to, start small with what you have. A modest amount of money can grow exponentially over time thanks to the power of compound interest. Starting a small investment now can create a big payout later down the road.
Tip #2: Invest Regularly
While it may be tempting, it isn’t productive to wait around deciding when the perfect time to invest is. This is called trying to time the market, and it has a reputation for not always being a favourable move for the investor. Instead, try investing small amounts of money on a scheduled basis, like clockwork. It’s also important to invest regardless of your recent returns, as past performance does not guarantee or indicate future performance. Instead, create a plan and stick to it.
Tip #3: Diversify
If you only invest in one company or sector, you could lose a lot of money if something causes those stocks to drop. Avoid putting all your eggs in one basket by keeping your portfolio diversified.
Tip #4: Enroll in Your Company's RRSP
If you’re a full-time employee, you may have the option to enroll in your company's group Registered Retirement Savings Plan (RRSP) or other company pension plan. After enrollment, you’ll likely have the option to automatically divert a fixed amount from every paycheck into the plan. Also, any income you earn in the RRSP is typically exempt from tax until you make a withdrawal.2 Not only does this option have tax-saving advantages, but you also won’t even have to think twice about when or how much to invest.
Tip #5: Work With a Financial Planner
One of the most impactful things you can do for your future retirement is work with a financial planner who is familiar with your situation. They can provide you with realistic expectations, savings goals and investment advice based on your tolerance for risk. Be open and honest in your discussions, and don’t hesitate to express your fears or anxieties regarding your future retirement.
When it comes to your retirement, you must be knowledgeable, confident and diligent in your planning efforts. If you’re used to living a particular lifestyle and want to continue doing it once you are no longer working, planning ahead is critical. And if you are unsure where to start, speak with a trusted financial professional to find what works best for you and your unique situation.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.