Investing Made Simple: Grow Your Money with Confidence

Investing Made Simple: Grow Your Money with Confidence introduces the fundamentals of investing in a clear and approachable way. This episode explores how investing works, the different options available, and how to get started based on your goals and comfort level. Whether you’re new to investing or looking to build more confidence, you’ll gain practical insights to help you make informed decisions and take the next step toward growing your wealth.

Transcript

Coast Capital Savings, a proud supporter of the Thrive Program since 2020, is a member-owned financial cooperative with an 80-year-old legacy of unlocking financial opportunities that positively impact people and communities. Driven by their social purpose of building better futures together, they look at everything they do through the lens of how they can help their 600,000 members, employees, and communities. Ranked in the platinum category of the 2022 Corporate Knights Social Purpose Ranking and a proud Certified B Corporation Registered, they're part of a global movement building a more inclusive, equitable, and regenerative economic system. Each year, they invest 10% of their bottom line into local communities, which over the past two decades totals $100 million. To learn more, visit them online at coastcapitalsavings.com.

Welcome to the Thrive Podcast, an open space to celebrate diversity, share our perspectives, and promote the abilities of youth with disabilities. Thrive is a program at the BC Centre for Ability and is generously sponsored by Coast Capital Savings.

This podcast is produced on the traditional lands of the Coast Salish peoples. I'm your host and producer, Anu Pala. Welcome back to our Financial Literacy Series. Today, we're talking all about investments, a word that can feel intimidating or not for me. At its core, investing is simply putting your money to work in ways that support your goals, values, and future security. In this episode, we'll cover what investing looks like, how it differs from saving, and why it's about building over time, not getting rich quickly. We'll break down common investing types, talk about risk realistically, and explore ways to invest that feel accessible, sustainable, and aligned with your life. Whether you're curious, cautious, or ready to take the first step, this episode is about clarity, not pressure. Once again, we have Coast Capital Savings Regional Manager of Wealth Management Services, Shauna Lind, to help break this all down for us. Thanks so much for coming back, Shauna. 

Shauna: No problem. Thanks for having me. 

Anu: Today, we're going to be talking about investments. 

Shauna: Excellent. 

Anu: So first and foremost, how would you describe investments to the average person? 

Shauna: I think to simplify, investing is putting your money into something like a savings vehicle, like stocks or funds with the goal of growing it over time. Okay, that's pretty much it.

Anu: Okay, that's great. Why is it important to start investing even with small amounts? Because I think that's one thing, you know, people think I can't invest, I don't have any money. I hear that a lot, you know, from young people, especially, but I think investing can start really early on. So talk about that a little bit. 

Shauna: It's so important to start investing early, even with small amounts, because money grows over time. So the longer you're invested, the more it's going to grow. Even small amounts can grow big thanks to compounding interest. So that means earning money on your money over time. Really, you don't need a huge lump sum to start investing. A lot of investment options come with a monthly contribution option as low as $50 a month. 

Anu: That's great. That feels very doable. 

Shauna: It's very doable even for a student, for example, with a part-time job. It's really important to start saving, whether it's short-term, long-term, everybody has individual goals. And the sooner we start, the sooner we're going to start to attain those goals. 

Anu: What are the most common types of investments that people should know about? So stocks, bonds, mutual funds, TFSAs, etc. 

Shauna: Sure. The most common types of investments that people should know about, there's stocks, ownership in a company, a small portion of it. In most cases, bonds, which is lending money to governments or companies in exchange for a return. Mutual funds, which is a group of investments that are professionally managed for you. ETFs, very similar to a mutual fund, but traded like stocks. For example, one ETF can give you access to hundreds of companies at once. GICs or term deposits, it's the same thing, just different ways of saying it. Money locked in for a set amount of time with a set interest rate. Those are guaranteed safe, but typically lower growth. Savings accounts, so that's the safest place for cash. Typically, that's where you'd want to keep something like a rainy day fund, an emergency fund that you can access at a moment's notice. Typically, the interest on those is very low, but best for short-term emergency goals. 

Anu: So what I'm hearing is that it might be a good idea to have a couple of different buckets. 

Shauna: Absolutely. I think diversification is key. So having different types of investments for your different goals is important because a lot of times your goals are very different time frames. For example, retirement may be 25 years out, but yet you want to purchase a new car within the next five years. So those types of investments may be quite different. 

Anu: That makes sense. So what are the different types of registered investments? 

Shauna: Great question. So there are several different types of registered investments, TFSAs, tax-free savings accounts, RRSPs, registered retirement savings accounts, which convert to a registered RRIF, a registered retirement income fund, at age 71, and RDSP, registered disability savings plans, and so on. These types of investments aren't actually the vehicle, they're just sort of the umbrella, and you can hold multiple different types of investment types under that. For example, you may have a tax-free savings that's invested in a mutual fund. And then your registered retirement savings plan may be in ETFs and a combination of ETFs and GICs and mutual funds. And RDSPs may be just mutual funds. So it really is just the umbrella and the type and depending on if you qualify for and there are pros and cons to each. So it's important to talk to your financial advisor to determine which one is the best fit for you. 

Anu: That's great. How do risk and reward work?

Shauna: So higher risk usually means higher possible reward or return but also a higher chance of loss. It's really important to find your comfort zone, which means balancing growth with how much risk you can handle. 

Anu: Okay, so can you break that down a little bit for us? 

Shauna: Absolutely. So for example, if you are investing for the long term, so if I'm in my 20s and I'm investing for my retirement, I may choose an option that is a little bit higher risk because I have a longer time frame for that particular goal. So I'm able to withstand dips in the market over time. For example, if I'm saving for a car in the next couple of years, I'm going to want to choose something relatively low risk because it's really important that I save and that my principle that I'm investing is secure.

Anu: Okay. So when you talk about risk, I'm thinking about, you know, some of our youth who may be listening to this podcast. What does risk actually look like? 

Shauna: Sure. So risk, for example, can mean a lot of different things. So there is inflation risk, which means it's really important that whatever you're investing or saving in has a higher rate of return than what the rate of inflation is so that your purchasing power, meaning how much your money is worth when you go to use it, is worth more or at least the same as it is today. There's also market risk. For example, if you're invested in stocks or mutual funds or ETFs or something that's market linked, then there is the rate of fluctuations. So we all know that there's different factors that can impact the markets. There's economic factors, inflation, jobs, there is geopolitical, all sorts of things that can impact what the market is doing. So with that, we have to make sure that we're invested in something that is conducive to what our goal is and that we're able to withstand that type of risk as well as emotionally. So for example some people lose sleep if they fear that the market fluctuations are going to impact their money. So that's why it's so important for anyone who's investing to sit down with their advisor and go through a sort of a risk profile questionnaire type of thing, and make sure that what they're invested in is right for them, because everybody has a different ability to stomach what their level of risk tolerance is. 

Anu: That's actually really good advice. So how can someone start investing if they feel overwhelmed or don't have a lot of money? 

Shauna: Anybody can start investing, regardless of overwhelmed or don't have a lot of money? Anybody can start investing, regardless of how much money you have. I think the main thing is start small, manageable amount. You can start with as little as $10 a paycheck if that's just going into a savings account. But just learning the basics and adding money regularly is really important to start building those types of behaviors. And then when you're ready, it's really important you can go into your financial institution, sit down with an advisor. It's free education. Learn all about the different types of investments and what's right for you. And like I said before, you don't need a huge lump sum to start investing. You just need something typically as little as $50 a month to be market invested. So a mutual fund or something like that. But a savings account, you can start small $10 a paycheck. 

Anu: That is such good advice because I hear this a lot, you know, from people that I have no money at all. But I feel like if you really think about it, it's what a couple of cups of coffee these days? Coffee is pretty expensive these days, right? So a couple of cups of Starbucks, it really doesn't take a lot. But I think it's about formulating those habits. 

Shauna: Absolutely. And I know the coffee thing is sort of an old adage that we use all the time. But I think the first step in knowing how much you can invest is doing a budget, a reasonable budget. Most financial institutions, including Coast Capital's website, have a budgeting tool that's really user-friendly that you can use. And I always suggest when someone's doing a budget that they pull up their banking app on their phone and they look at their last month of spending so that it's realistic. Because a lot of times people input amounts, oh $50 on groceries, but that's not really realistic if they look back and maybe they've spent over $100. So doing a realistic budget will help give you an idea of how much you can actually afford to save and invest and that way it's comfortable, you're not going to be short for your bills and just making sure that those necessities are taken care of and that you're able to put money aside.

Anu: And that website is coastcapitalsavings.com. 

Shauna: Sure is. 

Anu: What are some common mistakes that investors make and how can we avoid them? 

Shauna: I think there are a couple of mistakes that some people can make chasing those get rich quick schemes. So it's really important and best to stick to long term goal based investing in plans. Some people panic when the market drops. So learning the difference between emotional investing and and really pragmatic investing. difference between emotional investing and really pragmatic investing. Remember, ups and downs are normal and they do happen. And when we pull our money out, when the market drops, often we're not going to be able to recover. So I know if you take, for example, the 2008 market crash, when people pulled out, rather than staying invested, a lot of people who stayed invested did significantly better than those that pulled out. So it's really important to remember that ups and downs are normal. And that's why it's so important to make sure that you're in something that you're comfortable with the risk profile with. Another common mistake is not diversifying. So especially when people are just starting out they may put all of their money in one thing some young people may put all of their money into crypto for example or into one specific fund or stock and that can maybe hurt them over the long run if they're not listening to professional advice and it's not in line with what their goals are. Some people also will listen to friends, family advice, social media influencer advice over professional advice. So while it's great to get, you know, tips and tricks from family or friends, always speak to a professional because what's right for your friend or for your family member may not be right for you. 

Anu: What is one simple action that someone can take today to begin their investment journey?

Shauna: I think meeting with an advisor at their financial institution to learn. It's free education. These are professional financial advisors that will give you really good advice and help you determine what the best strategy is for you. And then open a beginner-friendly investment account and set up automatic contributions. So even if it's just $50 a month or $25 bi-weekly every paycheck, it's a great start and over time that will grow to be something significant. 

Anu: Okay, that's great. Are there any tools that you can recommend for beginners? 

Shauna: Yeah, there's lots. I mean, with online tools, there's websites like Investopedia, which will help to kind of understand the financial jargon. A lot of YouTube things use a lot of complicated financial jargon. So Investopedia is a really good way to understand what they actually mean. Your financial institution as I've said before it's the best resource. It's free. You can go and you can talk to someone. They can give you real life advice on what's right for you. It's specialized. It's professional. They'll help you determine what the best scenario is for you. Coast Capital Savings Financial Education website has a lot of links to blogs, seminars, podcasts like this, links to more online learning as well as in-person seminars that you can attend as well. There's lots of free podcasts or YouTube finance channels that you can also listen to but make sure that you're validating that information with a professional advisor as well. 

Anu: So where can someone find that financial education page? Is it directly on the Coast Capital Savings website? 

Shauna: It is. It's a micro site, but it's built in. So if you go to www.coastcapitalsavings.com and under financial education, there's a whole plethora of information and links to online learning as well as seminars. 

Anu; Oh, amazing. I love to learn. So I will definitely be going there. So thanks for sharing that resource. 

Shauna: No problem. 

Anu: So Shauna, as we're wrapping up, I have one final question for you. If you could give one piece of advice to your younger self about investing, what would it be? 

Shauna: Start earlier. So even with the tiny amount, it's so important to start early. Time is the most powerful tool. 

Anu: Thank you. 

Shauna: Thank you. 

Anu: And that is the end of our episode today.

Thanks so much, everyone, for listening, and we'll see you in the next one. This brings us to the end of our episode today. Thanks so much, everyone, for listening, and we'll see you in the next one. This brings us to the end of our episode. I want to give out a huge shout out to Coast Capital Savings for their ongoing support of the Thrive program. Thank you so much. I hope that today's topic resonated with you. And if it did, remember to share it far and wide with your networks. You never know who it might help. And while you're doing that, remember to like, follow, and leave a review. Thanks for listening, and we'll see you next time.