3 Investment Tips for Millennials

 

 

Let’s be honest, investing isn’t always easy – at least it doesn’t always seem that way. With so many different options available on the market (from mutual funds to stocks), choosing the best strategy can be overwhelming. That’s where the assistance of a financial advisor comes into play.

 

It’s very easy to get caught up in hot tips, news headlines and guidance from family and friends. It seems like everywhere we look someone is giving millennials investment tips. The truth is finance is personal, and that’s why it’s so important to get tailored advice from a professional. With that being said, there are some pieces of advice that all young investors should know.

 

Here are three investment tips for millennials who want to start investing:

 

Start as early as possible

 

Yes, that’s right, young people should have started investing way before they were coined as millennials. As soon as you have an income (no matter how big or small) a portion of your paycheque should go into savings.

 

Thanks to a little thing called compound interest there are big benefits for millennials who start investing early. Compound interest helps your investments grow faster because your monthly earned interest (or dividends or capital gains) is reinvested back into your account. Therefore, the next month you earn interest on the previous month’s interest and so on for years to come. It’s brilliant.

 

Think long term with your strategy

 

According to Forbes, investing for the long term helps millennials see the bigger picture when it comes to risk versus reward in your portfolio. “Risk is kind of like that friend who regularly cancels plans but always comes through in a pinch. There might be heartache in the day-to-day, but in the long run, you’ll be glad you stuck it out.

In investing, more risk means the potential for more reward. Could you lose money and never collect that premium? Sure, but that’s unlikely when you’re in it for the long-term.”

 

Be honest with your financial advisor

 

Professional advice can help find an investment strategy that fits your individual plan, financial capabilities and life goals. However, that can only happen if you are completely honest with your advisor.

 

Think of a financial advisor as your financial doctor, they can’t totally assess the situation and provide a recommendation until they have all the information. This includes your short term and long-term goals, tolerance for risk, time horizon and general knowledge of the investing world.

 

If you have questions about investing or want to start investing but don’t know where to begin, I’m happy to help. Let’s chat about your goals and investment options for millennials.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

Less than one month to go!

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Tick, tock.

It’s February and we’re in Canada, which means two things. One, it’s really, really cold. And two, you’ve got less than a month to make contributions to your RRSP that will count for tax year 2016.

This year, the actual deadline to contribute is Wednesday, March 1, 2017.

There are lots of good reasons to invest in an RRSP, some of which you may know already:

Enjoying the tax-free growth of your retirement savings (until you withdraw the funds).

If you have a spouse, contributing to a spousal RRSP in the name of the lower-income-earner can also offer tax advantages in retirement.

First-time home buyers can use a portion of their RRSP to help finance their purchase.

Generally speaking, you are able to contribute 18% of your 2015 earned income to your RRSP. But there’s a bit more to it than that; determining exactly how much you can contribute can sometimes get complicated. A lot depends on what’s happened already. For example, how much room you have saved up from previous years, or whether you contributed to a pension plan the year before.

To make things simple, refer to your most recent Notice of Assessment (received after you filed your last tax return). Or do a Google search for “CRA My Account For Individuals,” which is administered by the Canada Revenue Agency. Both of those tools will show you exactly how much you can contribute to your RRSP this year – right down to the dollar!

So if you’re ready to top up your contributions for 2016, feel free to give us a call. We will be happy to walk you through the investment options available, and to discuss which ones might make the most sense for you.