Guide: Investing 101

Investing can be a great way to grow your wealth and secure your financial future, but it's important to approach it with a plan in mind. Here are some steps that Canadians can follow when getting started with investing:

1. Create an emergency fund: Before you start investing, it's important to have a financial safety net in place. This means setting aside some money in a high interest savings account that you can use in case of emergencies, such as a sudden loss of income or unexpected expenses. Aim to save enough to cover at least three to six months' worth of living expenses.

2. Contribute to a Tax-Free Savings Account (TFSA): A TFSA is a type of savings account that allows you to earn investment income tax-free. You can contribute up to $6500 each year, and any investment income you earn, including capital gains and dividends, is not subject to taxes. TFSAs are a great way to save for short-term goals, such as a down payment on a home or a vacation, and can also be used to supplement your retirement savings.

3. Contribute to a Registered Retirement Savings Plan (RRSP): An RRSP is a type of savings plan that is designed to help you save for retirement. You can contribute up to a certain amount each year, and the contributions you make are tax-deductible. Any investment income you earn within the RRSP is also tax-deferred until you withdraw the money in retirement. It's important to start saving for retirement as early as possible, as the power of compound interest can help your money grow significantly over time.

Once you have these three steps in place, you can consider other types of investments such as opening a taxable account or investing in real estate / crypto. It's important to do your research and understand the risks and potential rewards of different investment options. You may also want to consider seeking the advice of a financial advisor or professional to help you create a diversified investment portfolio that aligns with your financial goals and risk tolerance.

By following these steps and being mindful of your financial goals and risk tolerance, you can set yourself up for success with your investing journey.