…. if you’re doing it right.
Investing can be an integral part of household financial strategy in Canada. Afterall, investing can bring expedient growth to our savings like little else.
We’re not talking about the shout-y, stressful, high stakes investing that we see on TV.
We’re actually talking about the opposite. If you ask us, investing should actually be kind of… boring.
Let us explain.
Investing is Boring
We want to see Canadians empowered to make smart, informed financial decisions for themselves. But there are so many finance topics that are shrouded in mystery, and made opaque by confusing or misleading language.
Investing is one of those topics.
In fact, investing doesn’t need to be as scary, intense, or high risk as it seems on TV (it can be, though, if you’re into that kind of thing).
Playing the Long Game
Watching the stock ticker scroll by on the bottom of a cable news show makes it seem like investors must be glued to their stock performance every second of every day. Some people are. But not everyone needs to be.
Insofar as investing fits into the financial strategy of average Canadians, it’s not about the second-by-second, or the minute-by-minute, or even the year-by-year, necessarily. For a lot of us, our investment time frame spans over decades.
We’re playing the long game.
Why? Because global financial markets fluctuate—sometimes a lot—but over the course of decades, the markets have consistently trended upward.
Some years are bad years—think of the fallout that came with the 2008 recession. But generally, with enough time, losses can be earned back and then some.
When investing smaller amounts of your income every month for decades, it’s more likely you would see a slow, steady growth in your returns.
Diversifying Your Portfolio
The stock market can be a stressful place when you’re only buying one stock, or when you’re trying some sneaky maneuvers, like trying to short a stock (remember GameStop?). Yeah. That stuff? Not boring. Very stressful.
But if you’re instead investing in a diverse portfolio of financial instruments, including fractional shares in baskets like exchange-traded funds (ETFs), you’re way less likely to see such crazy fluctuations.
If you invest all of your money in Stock A, and it goes bust, you go bust, too.
But if you’re invested in Stock A all the way through Stock Z, and Stock A goes bust but the other 25 stocks in your portfolio stay about the same, you’ll be hit with proportionally fewer losses.
Diversifying is all about balancing your risk. Balanced, more predictable, boring? Sign us up.
The other crucial consideration in investing (the boring way) is compound interest. Playing the long game not only makes it more likely your investments will rebound from any temporary setbacks over the years, you’re also taking advantage of compound interest.
It’s said that Albert Einstein actually called compound interest the “eighth wonder of the world.” Not easy to fact check that, but in any case, we agree with the sentiment.
Compound interest occurs when you are assessed interest payments on your principal contributions in addition to all of the interest you’ve earned from previous periods.
This might not seem like much, but over time, compound interest can literally make average Canadians into millionaires.
The secret to capitalizing on your compound interest? Starting to invest early. The longer you invest over the course of your life, the greater advantage you’ll be able to take from this financial “wonder”.
Spice It Up with Crypto
With any luck, your foray into investment may only be as exciting as it is to watch your savings grow over the course of decades, always creeping closer to your retirement goal.
But if you want a little excitement, you might consider investing a little bit into a speculative asset like cryptocurrency.
Crypto is extremely volatile, so we’d never recommend putting all of your eggs in that single basket. But if you’ve got a spare $5 here or there, and you want to follow the market more closely with a bit of skin in the game, it could be a worthy financial instrument.
We built our Bitcoin & Rewards program for exactly this purpose. Canadians can dabble in crypto a lot or a little in-app, and earn 2% bitcoin cashback for every purchase they make using the Mogo Visa* Platinum Prepaid Card.1
That actually means you can invest in bitcoin without spending any of your own cash on bitcoin. (Or you can just withdraw your bitcoin cashback rewards as cold, hard cash!) Pretty cool, eh?
|GET MY FREE MOGOCARD|
Investing is a super powerful way for Canadians to build up their wealth and financial knowledge. Starting early, being consistent, and ensuring diversity within your investment portfolio are key to having a boring—but satisfying—run as an investor in our global financial markets.
Read our post on how to invest if you want more info. Remember to always do your research and choose wisely. Time to start doing money like you mean it, friends.
This blog is provided for informational purposes only, is not intended as investment advice, and is not meant to suggest that a particular investment or strategy is suitable for any particular investor. If you’re unsure about an investment, you may wish to obtain advice from a qualified professional. Nothing herein should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Buying and selling bitcoin is risky and you may suffer losses. The price of bitcoin is highly volatile and speculative and so you should never invest more in bitcoin than you can afford to lose. It’s also important to remember that past performance is no guarantee of future results.
*Trademark of Visa International Service Association and used under licence by Peoples Trust Company. Mogo Visa Platinum Prepaid Card is issued by Peoples Trust Company pursuant to licence by Visa Int. and is subject to Terms and Conditions, visit mogo.ca for full details. Your MogoCard balance is not insured by the Canada Deposit Insurance Corporation (CDIC). MogoCard means the Mogo Visa Platinum Prepaid Card.
1-Bitcoin Cashback is a component of Mogo’s Rewards program. To be eligible you must have: (i) a Bitcoin & Rewards or MogoCrypto account; and (ii) the Mogo Visa Platinum Prepaid Card (“MogoCard”). Eligible MogoMembers will earn 1% Bitcoin Cashback on Canadian currency purchases (or 2% on any domestic purchases made on or after June 1, 2021) and 2% Bitcoin Cashback on foreign currency purchases. Bitcoin Cashback is earned monthly and based on all eligible purchases made in the preceding month. Mogo will determine the eligible 1% or 2% in fiat and will convert that fiat to satoshis according to the Satoshi Conversion set out in detail in the MogoAccount. All decisions regarding the conversion to satoshis by Mogo are final and binding. Additional eligibility requirements, transaction exclusions, and other terms are set out in full in the MogoAccount Terms and Conditions, which may be changed or terminated at any time without notice, see: https://www.mogo.ca/terms-and-conditions. Mogo cannot guarantee that the value of your Bitcoin Cashback will increase. If the price of bitcoin decreases then you may lose some or all of the value of your Bitcoin Rewards.