1. Investing in Canada
U.W.I.G

2. What is an Investment?
A deploy of capital with the expectation to make a return on that capital

3. Canadian Marketplace Stocks Bonds/Fixed Income Real Estate
Money Market
Savings Deposits
Mutual Funds/Exchange Traded Funds

4. Stocks Ownership of a company Shareholders Voting Rights
Capital appreciation/depreciation
Dividends

5. Bonds/Fixed Income Fixed investment for a guaranteed/variable return
Low risk or high risk
Fixed Stream of cash payments

6. Real Estate
Owning a house or owning a stock that owns a house/property
Property ownership/management
Real estate income trust investing

7. Money Market Fund
Trade in short-term loans between banks and other financial institutions
Short term
Liquid
Virtually risk free

8. Savings Deposits Basic bank accounts
Bank pays interest on your capital in the bank

9. Mutual Fund Professionally managed Stocks owned in a single fund
Actively traded
Expensive
Service vs. DIY
Prices only update at the end of the day
Not as liquid

10. Exchange Traded Funds Professionally managed
Stocks owned in a single fund
Passively managed
Traded in real time, updated immediately
Cheap
Liquid as a stock

11. How to Get Started Sign up for an online brokerage/trading platform
through your bank,
usually cheaper through specialized online brokerage
Look into trading fees, before choosing a brokerage
minimum requirements, etc
Very similar to our investment simulator
Typically allows trading all Canadian and U.S. stocks on major exchanges, mutual funds, bonds, options, ETFs, forex.
Trading options, bonds and forex may require a special account.

12. The Canadian Market
TSX index is heavily weighted towards financial firms, energy and commodity producers
nearly 70% of the TSX
mostly larger, established firms
TSX Venture Exchange exists for small/emerging companies
(more risky)
Montreal Exchange - options trading
Less liquid
requires more knowledge
Keep in mind taxes on capital gains and dividends if investing outside of a registered account

13. Investment Vehicles RRSP’s - Registered Retirement Savings Plan
TFSA’s - Tax Free Savings Account
RRIF - Registered Retirement Income Fund

14. Registered Retirement Savings Plan - (RRSP)
Federally recognized savings vehicle
Any contribution is tax deductible
Can hold virtually any asset that can be traded/bought/sold
Investments grow tax free until withdrawn
Contribution limit is 18% of your income

15. Tax Free Savings Account - (TFSA)
Federally recognized trading vehicle
Investments/Contributions grown tax free
Can hold virtually any asset that can be traded/bought/sold
Contributions are always tax free, including withdrawals
Limit of $10,000 a year ($36,500) since inception

16. Registered Retirement Income Fund - (RRIF)
Similar to RRSP
Same rules
Can’t make contributions too
All RRSP’s have to be converted to RRIF at age 71

17. Pension Vehicles Defined Benefit Plan Defined Contribution Plan
Registered Pension Plan
Canada Pension Plan
Old Age Security
Guaranteed Income Supplement

18. Defined Benefit Pension Plan
Guaranteed income in retirement
Actuarial designed formula (Average career salary * benefit percentage * years in plan)
Ex: %50,000 * 2% * 35 = $35,000
Employer sponsored mainly
Low death benefit payment
Predictable, reliable, guaranteed
Not always transferable

19. Defined Contribution Pension Plan
Employer/employee sponsored
Usually percentage of earnings matched
Similar to a group RRSP
Can be invested in anything
Ownership is %100 yours
Main source of income comes from investment returns
Transferable

20. CPP/OAS/GIS
CPP - Guaranteed pension every Canadian pays into (1065 monthly maximum) - indexed to inflation
OAS - Guaranteed pension for citizens with low/median income ( monthly maximum) - indexed to inflation
GIS - A component of OAS, dependent on many factors

21. Tax, Fees, Efficiency and Compounding
Tax deferral
Fees/commissions
Time value of money
Compounding

22. How much should I Save or Invest?
Everyone is different
Highly variable and dependent on retirement income + investment returns
Rule of thumb is 10%-20% of gross income
Consider all sources (CPP, OAS, pension, savings)
Average - comfortable retirement is considered 70% of working years income