Welcome! We're glad you're here to learn about growing your money through investing.
Building wealth isn't just about watching your investment account grow. It's also about thinking about what you really want in life. Sure, social media might make you want to keep up with everyone else. But stop and ask yourself, "What does being good with money mean for me? How does it fit into my life?" This approach can help you take control.
Investments aren't one-size-fits-all. We're all different. You might be just starting to build wealth, or you might already feel financially secure. Your personal situation matters – whether you're single, married, or going through a breakup. Having kids or not, starting your career or close to retirement – all these factors shape your financial needs.
Think about where you are now and where you want to be. These are the key things to guide your financial priorities and help you set your goals.
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Where are you now?
Where do you want to be?
How will you get there?
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Think about a goal like remodeling your house. You wouldn't start knocking down walls without a clear plan, right? The same goes for building wealth.
The goal can’t just be: "I want to retire early." It’s important to get specific.
Ask yourself:
- “What do I really want to achieve financially?” And “What kind of life do I want to lead?”
Once you have clear answers, you can:
- Align your investments with these goals
- Create a plan that supports your vision, and
- Decide how best to use your money and resources.
Today, we'll focus on learning the basics of investing.
<On the slide:> TITLE: Take control.
- Identify and prioritize your goals
- Start with a budget and develop a plan
- Learn the fundamentals of investing
- Talk to a trusted financial professional
- Review, reassess, and rebalance
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Understanding three key factors will help you make investment choices. These factors are time, taxes, and diversification. Let's explore each of these in more detail. By learning how they affect your investing strategy, you'll be better equipped to make informed decisions with your money.
Investing as early as you can is one of the best ways to make your money grow. The earlier you begin, the more time your investments have to increase in value.
Let's review an example:
If you begin at age 25 and invest $100 every month, you'll save $48,000 over 40 years. With a 6% net annual return, that money will grow to nearly $197,000 by the time you're 65.
Waiting to start means you'll have much less saved or you'll need to contribute more each month.
It's usually easier to start early and let time work for you than to find large amounts to save later.
<On the slide:> A chart
Assumptions: $100 per-month contribution, 6% annual return on investment, Returns before tax
- Age 25: Total amount contributed, to age 65: $48,000, Value $196,857
- Age 35: Total amount contributed, to age 65: $36,000, Value $100,562
- Age 45: Total amount contributed, to age 65: $24,000, Value $46,791
- Age 55: Total amount contributed, to age 65: $12,000, Value $16,766
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Different account types can help you save and reach your goals.
Registered accounts shelter your investments from taxes. You can contribute to a Registered Retirement Savings Plan, or RRSP, if you:
- Are under 71 years old,
- Are a Canadian resident for tax purposes, and
- have earned income.
If you're new to Canada, you'll get RRSP room after you have earned income and filed your first tax return.
Your eligible contributions are tax-deductible. This means you pay less income tax now.
You can invest your RRSP money in many ways, and any investment growth is tax-deferred until you take it out.
You must start turning your RRSP savings into income by December 31 of the year you turn 71. When you withdraw money, you'll pay tax on it that year. Since most Canadians have less income in retirement, RRSPs help us save on taxes.
We'll talk about other account types in the next few slides.
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- Investments grow tax-deferred (RRSP: Yes)
- Contributions are tax-deductible (RRSP: Yes, FHSA: Yes)
- Investments grow tax-free (TFSA: Yes, FHSA: Yes)
Non-registered: Investment earnings are taxed.
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Thinking about buying your first home? Let's talk about two ways to save for that down payment.
First is the First Home Savings Account, or FHSA. It's a special account that helps you save money for your first home. Qualified contributions reduce your taxable income, so you’ll pay less in taxes. Your savings grow tax-free in the account. And when you take money out to buy your home, you don't pay any taxes on it, so long as it’s a qualified withdrawal.
Next, there's the Home Buyers' Plan, or HBP. This plan lets those who meet the plan criteria use money from their RRSP accounts, without paying taxes, to buy or build a qualifying home.
The good news is you can use both of these options together for the same qualifying home purchase.
These programs have specific details that are outside the scope of this recording. You may wish to consult a professional advisor if you want to know more about how they might work for you.
<On the slide:> A chart comparing FHSA and RRSP Home Buyers’ Plan
- Annual contribution limit: FHSA: $8,000/yr, $40,000 lifetime; RRSP $33,810 for 2026, subject to personal limit.
- Contributions: Both are tax-deductible.
- Growth & Withdrawals: FHSA: Tax-Free growth & qualifying withdrawals; RRSP: Tax-deferred growth, HBP withdrawals tax-free up to $60k if criteria met, otherwise taxable.
- Pay back required?: FHSA: No; RRSP: Yes, payback period is 15 years if withdrawal was for qualified HBP.
You can use both!
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A Registered Education Savings Plan (RESP) is a special savings account for parents and grandparents that want to save for a child’s post high school education. It's a special account that helps your money grow faster.
Here's how it works:
- You put money into the RESP.
- The government adds a 20% grant on top, up to a yearly limit.
- Your savings grow tax-free while in the account.
When it's time for post secondary school, your original deposits are withdrawn tax-free. Any growth and government grant that is paid out of the RESP is taxed in the hands of the student. Since many students have little or no other income, they will usually have to pay very little, and sometimes even no tax, on withdrawals.
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- RESP: Contributions allowed until plan's 31st anniversary, max contribution $50,000/beneficiary, contributions are not a tax-deduction, interest/growth earned is not taxable until withdrawal
- CESG: 20% grant based on your yearly contribution, to a maximum. Maximum grant is $500 annually per eligible child. $1,000 if there is unused grant room from a previous year. Lifetime limit of $7,200. If money isn’t used, the 20% grant must be returned to the government
- Source: www.canlearn.ca.
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TFSAs and non-registered accounts are flexible tools for saving. You can use them to save for a home, education, vacations, emergencies, or even a new car.
Canadian residents 18 years and older can contribute to a TFSA. You can contribute to a TFSA only for the years you’re a resident of Canada and have a valid Social Insurance Number.
When you put money in a TFSA, you're using after-tax dollars. This means you've already paid tax on this money, so you can't deduct your contributions from your taxes. The good news? Your investments grow tax-free in a TFSA, and you generally won't pay tax when you take the money out.
Non-registered accounts also use after-tax dollars. Withdrawals aren’t considered taxable income, but they may result in a taxable capital gain or loss. You’ll also be taxed each year on any investment income and capital gains in an NREG. Capital losses can be used to offset capital gains.
Both of these accounts can boost your retirement savings. They can let you make big purchases in retirement without dipping into fully taxable accounts, which can help with tax planning. For advice tailored to your specific situation, we suggest working with a tax advisor.
<On the slide:> A table:
- Contribution limit: TFSA ($7,000 for 2026, subject to personal limit); NREG (N/A).
- Taxation: TFSA: Contributions made with after-tax dollars. Investment growth is tax free. No taxes upon withdrawal. NREG: Contributions made with after-tax dollars. Investment income and capital gains are taxable each year.
- Reporting: TFSA: No tax forms are issued but your contributions and withdrawals are reported to CRA each year; NREG: Investment income earned and capital gains or losses realized during the year, are taxable each year and reported to you via tax slips.
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Listed on the slide are some common types of investments that are available, such as stocks, bonds and guaranteed investment certificates. Don't worry if you're not familiar with all of them – that’s normal.
The key to successful investing is choosing options you understand and feel comfortable with, and that match your personal comfort level with risk.
Today we’ll look a little deeper at investment funds.
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- Stocks
- Bonds
- Investment funds
- Segregated fund contracts
- Guaranteed investment certificates
- Accumulation annuities
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An investment fund is a financial vehicle where the assets of many investors are pooled and collectively invested, generally in securities. A fund manager oversees the fund and decides which securities it should hold, in what quantities and when the securities should be bought and sold. You choose a fund based on its goals, risk, fees and other factors.
An investment fund can be broad based and invest in hundreds of stocks, bonds and other asset classes from countries around the world. It can also be focused on one asset class (eg. stocks), one country (e.g. Canada) or one sector (e.g. Financials).
When you invest in an investment fund, you buy a part of the fund called a “unit.” Depending on the performance of the underlying investments in the fund, the value of your units will go up and down over time.
Common types of investment funds in Canada are mutual funds and segregated funds. From an investment perspective, segregated funds and mutual funds are very similar. They both allow a group of investors to pool their money together, buy shares/units of the fund and become a shareholder/unitholder of the fund.
Most group plans don’t offer mutual funds. Instead, they offer segregated funds. Segregated funds are offered only by insurance companies. The assets in the segregated funds are held in a separate account and segregated from the insurance company’s other assets. Neither the value of the assets nor the return is guaranteed. But, since the segregated funds are provided through life insurance contracts, they provide certain features that are not available with mutual funds such as payment of proceeds on death directly to beneficiaries and protection against the bankruptcy of the insurance company.
Since the mutual and segregated funds are being professionally managed, we as investors pay management fees. The good news is that the fee structure within your group plan is competitive and may be lower compared to similarly managed investment funds at similar financial institutions.
This chart reflects the connection between risk and potential return with various types of investment funds. In general, when you take on more risk with your investments, you increase the possibility of losses, but you also open the door to potentially higher returns. On the flip side, safer investments usually offer lower risk of losses along with more modest growth.
<On the slide:> A bar chart showing fund types from lowest potential risk/return to highest:
- Guaranteed/Money market (lowest)
- Bond
- Balanced
- Asset allocation
- Canadian equities
- Global/international equities
- Specialty fund (highest)
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Investing always involves risk. It’s the chance that your investment's value will change over time, and you might not get the return you expect.
Market risk is the risk investors lose sleep over. It’s the chance that the price of an investment will drop after you buy it.
Interest rates affect most investments. The price of bonds generally moves in the opposite direction of interest rates. Rising interest rates dampen economic growth and may also affect stocks and real estate. Another way interest rate risk applies is locking in an investment such as a guaranteed investment certificate (GIC) or guaranteed investment account (GIA) at a rate that is too low to keep up with inflation. Most group plans don’t offer GICs. They offer GIAs.
Inflation can seriously hurt your ability to build wealth. If your money isn't growing at least as fast as inflation, you'll lose purchasing power over time.
Business risk means you could lose money if a specific company you've invested in performs poorly. This can happen even when the overall market is doing well. To reduce this risk, focus on high-quality investments.
We can't get rid of risk completely, but we can take steps to lower it. Let's look at three common ways to do that:
- Understanding your risk tolerance,
- Diversification, and
- Dollar cost averaging.
Spreading your money across different types of investments is called diversification. It helps balance risk and potential returns in your investment portfolio.
The main investment types are cash, fixed income, and equities, also known as stocks. Each of these behaves differently over time. By mixing them, you can reduce your overall risk. How much of each type you choose depends on how much risk you're comfortable with.
If you want to play it safe and protect your money, go for more cash and fixed income. If you're aiming for growth, put more into stocks.
As you get older and closer to retirement, you'll probably want to take fewer risks. For example, you might shift from a growth-focused approach in your 30s to a more balanced one in your 50s.
Remember to check your risk comfort level regularly. Adjust your investments as needed to match your changing goals and life stage.
Dollar-cost averaging is a simple investment strategy. You invest small amounts of money regularly over time, instead of all at once. When markets are low, your money buys more units of an investment. Later, if markets go up, your whole portfolio could be worth more. This approach can help smooth out the ups and downs of investing.
Let's talk about market volatility. You hear about it a lot when planning your investments, but don't worry – it's not your enemy. You can beat it! Sure, it's scary to watch the markets drop. But remember, markets have a history of bouncing back over time. If you're not retiring tomorrow, stick to your plan. Wise investors see market swings as a chance to grab great investments at lower prices. It's like a sale at your favourite store! One way to take advantage of these ups and downs is through dollar-cost averaging.
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A chart that shows the market cycle of emotions. There is maximum financial risk at the top of the cycle when emotions are highly positive about market conditions. There is maximum financial opportunity at the bottom of the cycle, when emotions are highly negative about market conditions.
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Building wealth through investing is an ongoing process. Your investments will change over time, and you'll likely need different types of investments as your situation evolves. To create a successful portfolio, you need to understand your goals, what resources you have, and how much risk you're comfortable taking.
Take a look at your financial goals. Which ones are you on track to achieve? Keep up the good work on those. For goals you're falling behind on, think about your options. Ask yourself: “Is this goal still important to me?” If it is, you can either save more money, give yourself more time to reach the goal, or change your investment strategy.
Remember, your goals will shift as your life changes. Relationship changes, having a child, or experiencing health issues can all affect your financial plans.
Many people find it hard to get started with investing. That's where a financial professional can help. They'll guide you through the process step-by-step. Once you have a plan, you can watch it grow and change along with your needs over time.
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- Determining your priorities
- Constructing your portfolio
- Assessing regularly
- Modifying as needed
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<On the slide:> Thank you! The information provided is of a general nature and can not be construed as personal financial or legal advice. Neither Sun Life or its affiliates guarantees the accuracy or completeness of any such information. This information should not be acted on without obtaining counsel from your professional advisors, including a lawyer, notary, tax professional, or financial advisor (registered as Financial Security Advisors in Quebec) as may be applicable to your individual situation.
Group Retirement Services are provided by Sun Life Assurance Company of Canada, a member of the Sun Life group of companies. <End slide>