Long-term saving can seem like a daunting task, especially when the current economic climate prevents us from focusing on anything other than immediate investments. It may be helpful to speak with your bank regarding temporary borrowing options. If you don’t qualify for traditional lending options, there are payday loans from third-party companies that can provide temporary relief in hard times.
By reviewing all your options and making strategic investments, you can put your mind at ease knowing you are taking care of your financial future. If you ever need emergency, short-term funding you can always rely on payday loans at GoDay or similar lenders, but for the purposes of this article, we’re looking at longer-term investment options.
Always Think About Your Retirement
An RRSP – Registered Retirement Savings Plan – is a powerful savings tool. This account is there to help ensure you are taken care of when you’re ready to retire. You can open an account as soon as you are bringing in income and filing taxes. It’s recommended you begin your account as soon as possible, and contribute as often as you can. RRSP accounts are exempt from tax as long as there are no withdrawals made. It can be daunting to think about your finances in this future tense, but the Government of Canada can help you get started.
The Government of Canada created the TFSA – Tax Free Savings Account – for Canadians over the age of 18, to set aside tax-free money during their lifetime. This account is non-deductible for tax purposes; however, any amount committed and earned are exempt from taxes. While it is considered a savings account, it can hold a host of investments such as savings bonds, mutual funds, and stocks. To learn more about this process, and additional benefits, Sunlife has compiled a comprehensive list of tips and tricks so you can get the most out of your TFSA.
Mutual funds as a type of investment fund, which is a collection of investments such as stocks, or bonds. These investments are “open-ended” which means new shares are issued as more people invest. When you invest in a mutual fund, you’re merging your money with other investors; this allows you to diversify your investments at a low cost. These accounts are managed by a professional financial manager, alleviating pressure from the individual investor.
Like all investments, mutual funds come with associated risks. As the market fluctuates, so could your funds. If the market rises and you are able to sell the fund for more than you paid for it, you will make a profit. If you sell it for less, you’ll receive what is called a capital loss.
Play the Stock Market – But Play It Smart
Investing in the stock market isn’t as intimidating as it may seem. According to Wealth Simple all you need to begin are three things: a stockbroker or financial planner to facilitate the trade, money to purchase the stocks, and an idea of where you want to invest. The most effective way to reduce your risk is to diversify your portfolio.
This ensures if one stock takes a dive in the market, your entire investment isn’t in jeopardy. The simplest way to make money on your stocks is to hold your investments for a long period of time and follow the market closely. If you can afford a few risks with your money, the stock market may be the right option for your financial future.