Investing Tips for Canadians Wanting to Retire With Income.
This site is for you who are 20 to 65 of age and you have started to think about how retirement will look like. Because, as you know – most of us will live well into our 80s.
If you don’t care what retirement will look like – this might not be information you want to hear. All I wish to do is to share some knowledge gathered during the past 25 years or so. Perhaps sharing what I should have done when I was younger. If you are already retired, your goal should be to preserve capital and generate an income.
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They are, in my mind two different things. After working hard to acquire a certain standard of living, do you want to live at a lower standard when you retire? Surely, your answer would be no. If that’s the case, you need to think seriously about putting money away for your golden years in retirement. Read more: Retirement Income Investment Options
Investing for retirement
In the traditional sense of the term implies long-term growth of capital preferably in a tax free account. So it can compound. For example, a RSSP. If, as a young person you set one up, pick a mutual fund or something and it grows by say 5%/year and the profits are re-invested you will be amazed at how fast it will grow. And you don’t have to do much except contribute hopefully the maximum allowed each year. If you do nothing else, you might have a healthy retirement fund pending on when you start and how much you contribute.
Investing can also mean you hire an investment advisor to guide you. This applies if you have a fairly substantial capital to invest, and also consider the fees. Outside of a self-directed RSSP you can open an account with a broker and buy/sell stocks yourself. You pay a fee for each trade. Done right, it can beat the mutual fund rates and produce a steady growth. Done with knowledge, and conservatively it is still considered investing if the goal is to grow capital for retirement.
Trading your own portfolio
Implies taking a very active role in the market. You can, for example have a self-directed RSSP and make the trades yourself. Two things: You have to be interested enough to do the research and learn what to do and what NOT to do. And you have to learn money and risk management. How to Learn About Investing in Canada. Then there is DAY TRADING. The totally opposite of “investing”. Day traders are totally fascinated by the game, and secondary the long-term accumulation of capital. 75% of all day or week traders lose money. This fact alone should tell you it is not for most people. The attraction is that using leverage you can trade larger amounts as opposed to having to pay full price for something. But I can tell you it is fun and very, very challenging. And yes – done right it can be very profitable. But there is a LOT to it. Should You Borrow to Invest?
This site will have information on both.
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