In a similar way that we take the time to exercise or eat healthy to take care of ourselves physically, staying on top of your finances through education and investment opportunities is also a small commitment you can make today for a brighter tomorrow. So why is it that only a fraction of Canadians are actively investing for their retirement? While the circumstances of our finances may differ greatly from person to person, financial illiteracy has impacted the way many Canadians approach investing—especially young adults.
It’s time we debunk some of the myths around investing, and support one another in making more calculated and confident decisions toward our financial futures. Knowledge is power people! Backed by Head of RBC InvestEase®, Rajan Bansi, here are seven myths to unlearn about investing:
- You Need A Lot of Money
Whether you’re a new grad or new parent, it can be challenging to invest your savings—it can be challenging to save at all. It’s important to understand first and foremost that you can begin investing with as little or as much money as you’d like. RBC InvestEase, for example, is an online investing platform that allows you to develop a portfolio with as little as $100. Something Bansi, in his experience as a portfolio manager, says most people are “pleasantly surprised by.” Not ready to commit $100? That’s okay, too! Starting with a small savings account can be a great source of motivation to work toward your base investment goals.
- It’s Practically Gambling
When it comes to investing, people love to talk about risk. Once you’ve established some savings, the last thing anyone wants is to lose their money—don’t fret. Though investing poses no guarantees, your portfolio can be more conservative or more aggressive to meet your risk tolerance. Research investments with an established market history to start, build your knowledge and make informed decisions. Most importantly, use the support available to you.
- It’s All About Finding the ‘Next Amazon’
If you do enough research online, it’s common to come across the “get rich quick” mentality, for example If you would have invested this amount of dollars in Amazon during the 90’s, you’d be this rich today. It’s an approach that not only perpetuates the gambling-like stigma of investing, but ultimately intimidates us from investing altogether. This adds unnecessary pressure to first-time investors, something Bansi considers “one of the reasons people never get started.” If you’ve opened a Registered Retirement Saving Plan (RRSP), it’s important to approach your investments with longevity in mind. The stock market will fluctuate, but your goals should remain farsighted.
- Investing is Ethically Compromising
It’s instinctive for many people to assume investing as a rejection of your beliefs. Some say there’s no room for “doing good” in the stock market–but these people are wrong.“Responsible Investing is a way to make a difference in the world with your money,” says Bansi. Opting into Responsible Investing with RBC InvestEase allows your portfolio to develop using a strategy that incorporates company screening based on environmental, social, and governance (ESG) criteria. “ESG companies that may have a diverse board and healthy labour relations with their workers, for example, tend to make more secure investments,” Bansi adds. Needless to say, you should feel confident investing in companies you believe in.
- You Shouldn’t Invest During A Crisis
It cannot go without saying that in the midst of a global pandemic saving for retirement may seem less feasible. Financially, Canadians have suffered and in many cases have faced an unprecedented financial reset. When it comes to investing during a crisis, avoid eliminating or giving up on your investment plan, consider reevaluating it instead. “Throughout your time investing,” says Bansi, “it’s important to take a look in the mirror and reflect on your finances.” There are opportunities to invest in a pandemic economy, if your income has changed, adjust accordingly.
- You’re Too Old To Start Now
We really need to stop telling ourselves that we’re too old to do anything. Yes, generally it may be true that the earlier you begin investing, the better. The only thing worse than starting too late however, is not starting at all. Regardless of when you begin your financial investment plan, you’re always sacrificing a little today in order to better tomorrow—by definition, there is no time that’s too late.
- You Don’t Know Enough About Investing
Market value, dividends, portfolio diversification: the terminology alone can be intimidating enough to scare people away. “It’s a point of insecurity for people who maybe don’t have a financial mentor,” notes Bansi. For a safe and secure introduction, RBC InvestEase is an example of how acquainting yourself with the basics of investing has become, well, easier than ever. It’s a flexible option that allows a reliable professional to help get you started, with room to ask questions and make changes along the way.
Motivated to learn more? Opportunities to further develop your financial literacy are more available than you might think. On January 25, Toronto Life will be hosting a Virtual Fireside Chat with Rajan Bansi and Rhiannon Rosalind, CEO of The Economic Club of Canada. The event will lead a discussion on building financial resilience for youth in Canada. The most important part is getting started! Register for the event here.
Open an RBC InvestEase account and pay no management fee for 1 year*. Offer ends Mar 31, 2021. Click here to sign up!
*Accounts opened from January 1, 2021 to March 31, 2021 using promo code AA821 will not be charged the regular 0.5% management fee by RBC InvestEase for 12 months from the date of account opening. RBC InvestEase will notify clients 60 days in advance of any changes to the fees associated with their account as set out in the investment management agreement. A weighted average management expense ratio between 0.11-0.30% will still apply to the ETFs held in our portfolios. This offer cannot be combined with any other offers.RBC InvestEase Inc. reserves the right to amend or withdraw this offer at any time without notice.
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RBC InvestEase Inc. provides online discretionary investment management services. Other products and services may be offered by one or more separate corporate entities that are affiliated to RBC InvestEase Inc., including without limitation: Royal Bank of Canada, RBC Direct Investing Inc., RBC Dominion Securities Inc., RBC Global Asset Management Inc., Royal Trust Corporation of Canada and The Royal Trust Company. RBC InvestEase Inc. is a wholly-owned subsidiary of Royal Bank of Canada and uses the business name RBC InvestEase. In addition, the RBC iShares ETFs in which RBC InvestEase Inc. clients invest are managed by BlackRock Asset Management Canada Limited. RBC Global Asset Management Inc. and BlackRock Asset Management Canada Limited have entered into a strategic alliance to bring together their respective ETF products under the RBC iShares ETF brand, and to offer a unified distribution support and service model for RBC iShares ETFs.