Money matters.

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Unless you are Kermit…you may not be swimming in money.

Kindly note that the purpose of this blog is to give you a very simplified view of some investments available to you to save money. It is not intended to be financial advice rather financial education.  Everyone’s circumstance is different – the use of a personal advisor is best…but at least you will be familiar with some basic terms!

TFSA – Tax Free savings account

If you are over 18 and have a valid SIN (social insurance number), you can open a TFSA. This investment will allow you to contribute up to an annual max (currently at $5,500) for 2016 and earn income (interest or capital gain) tax free. The reality is that this money has already been taxed so your contributions are tax free but your income also tax free unlike other investments. TFSA can be an investment in GIC (similar to a fixed deposit), mutual funds and bonds.

Always ask about risk and cost. When your personal banker or advisor suggests an investment – do not be afraid to ask, how are they being paid and how frequently. It is your money. Risk – you need to determine how much risk you can take. Think about your needs in the near or distant future. In 2008, our investments lost half their value. We did not need the money for our kids education or for retirement. We left it – it took four years to recover the losses but that was better than selling and realizing the loss. Discuss your money needs with your advisor and the level of risk you are prepared to take. As with any investment, take the time to understand the rules.

You would not give your house keys to a stranger while on vacation and expect the house to be standing when you return.  The same for your investment – make an appointment twice a year to assess your changing needs.

Part II – coming soon (RESP and RRSP).