Artificial intelligence: What to consider before using it for investing

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Artificial intelligence (AI) has gained significant traction across various industries, including financial markets, promising increased efficiency and data analyzation. AI has also found a prominent role in our day-to-day lives, being used to enhance search engines capabilities and in AI-enhanced chat bots that deliver answers to questions or requests based on data sets that they are trained on.

With the growing interest in AI, some investors are looking to AI’s evolving technology for investing guidance. Before you use AI tools for investing, it’s important to understand its limitations.

Here are some things every investor should consider before investing with the help of AI:

AI is not a replacement for researching investments

While AI is a ground breaking technology, it does not replace the critical step of researching and qualifying an investment. AI chatbots like ChatGPT, OpenAI and Chatsonic are classified as large language models (LLM). This means they process vast amounts of select data sets from the internet and provide a response to your query based on probably word and phrase associations.

LLM AI relies heavily on historical data and may not provide real-time financial and investment analysis or guidance. Understanding past performance can be helpful information but it is never a guarantee of future performance.

Investors should take the time to thoroughly review the company they plan to invest in including the latest information and fundamentals like their business plan, operational information and milestones.

 

AI lacks human intelligence or the experience of registered investment professionals

Everyone has a unique investing journey. Constructing your investment portfolio comprises understanding your financial goals, time horizon and your risk tolerance. AI investing bots lack the emotional intelligence and human intuition to factor these important elements into their recommendations when asked.

Based on how the AI chatbot was coded and the types of data sets it was trained on to source answers, biases could also be present in its responses, favouring a particular approach or recommending only a limited number of investments to inquiring investors. Investors should look to registered financial advisors to receive a comprehensive and personalized assessment, and investment services when needed.

 

Be wary of AI chatbots that direct you to invest on a specific platform

With the growing excitement around the technology, fraudsters promote AI investing bots and apps they say can provide guaranteed or high returns with little to no risk to investors. Be mindful that these types of advertisements are a common red flag of fraud.

One of the best ways to avoid fraud is to confirm that the trading platform you plan to use is registered with the securities regulator in the province or territory you reside. Registration confirms that the individual or firm is properly qualified and comply with investor protection laws.

You can check the registration of any individual, firm or trading platform on our Check registration page.

Advancements in AI has undoubtedly transformed how we obtain, analyze and use information. While AI can provide helpful investment ideas, when it comes to making investment decisions, there is no replacement for the qualified services of registered investment professionals and your thorough research of investments to ensure they align to your goals and risk tolerance.

Treat using AI for investing as a helpful tool but not a substitute for due diligence.

Know your limit and invest within it: Understanding your risk tolerance when investing

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Understanding the level of risk you are willing and able to take with your investments is critical to your success as an investor. All investments come with some degree of risk; the higher the potential return of the investment, the higher the risk that you may lose some or all of your money. Understanding your personal risk tolerance and factoring it into your investment decisions can help you make suitable investments.

How can I determine my risk tolerance?

Risk tolerance is a measure of your ability and willingness to take risks with your money, with the understanding that the performance of your investments may not achieve the expected results. Whether you started investing in your 20s or nearing retirement, everyone has a different risk tolerance that gradually changes over time as they enter new life stages. Your personal preferences also change as you approach your financial goals.

When working with a registered financial advisor or a robo-advisor, a Know Your Client (KYC) form must be filled out before you begin investing. KYC forms play an important part in your investing journey by aiding financial advisors and robo-advisor services to better understand your risk appetite and the suitability of recommended investments. If you are planning to do self-directed investing, it is essential to personally assess your risk tolerance before starting. One tool that is available to help you is the Check Your Risk Tolerance quiz.

Tips to keep your investment portfolio in check with your risk tolerance

Whether you are a new or experienced investor, continually paying attention to and considering your risk tolerance is essential for long-term investing success.

1) Reassess your risk tolerance annually: Your life changes over time and so does the level of risk you want to be exposed to. Consider filling out a new KYC form with your advisor, retaking the CheckFirst quiz every year, or if you reach a new life stage, like getting married or nearing retirement.

2) Be honest with yourself: Investing is a personal journey and requires you to be open and honest with yourself and the investment professionals you work with on the level of risk you are willing to take. For instance, consider if you were to see a hypothetical 50% drop in your investment portfolio value. Reflect on your emotional and financial state if that were to happen and from this place, you will be able to more accurately answer KYC forms and thoughtfully consider high risk investments.

3) Think about your goals: The length of time you expect to hold your investments before withdrawing funds can be an important factor in determining the level of risk you take. Generally, the longer your time horizon, the more risk you can take, as you will have more time to recover if your investment underperforms for a period. The shorter the timeframe, the less risk you may want to take to preserve what you have invested.

4) Adjust your portfolio if it no longer falls within your risk tolerance: As your risk tolerance changes over time, your investments should re-align with it. If you are working with an advisor they can help adjust your portfolio to better represent your risk level. If you are investing on your own, consider how you can slowly adjust the level of risk within your portfolio by using appropriate risk-aligned investments.

Investing without considering your risk tolerance can lead to poor performance and ill-suited investments for your financial goals. By assessing your risk appetite throughout your investing journey, you can confidently build a portfolio to best meet your financial goals and comfort level.

Thinking ahead: Understanding the benefits of using a certified financial planner

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For new and experienced investors, your financial plan is one of the most important elements of your investing journey. A financial plan is a document that outlines your current financial circumstances, your short, medium and long-term goals and the steps you will take to accomplish them. A financial plan can also help you plan for and manage risks, including health or disability needs, job loss, and debt repayment.

Thoroughly evaluating your income, expenditures, savings, and debts and mapping out your expectations for the future is essential to constructing a comprehensive and realistic financial plan. While creating a financial plan can be done on your own, many seek out the expertise of a certified financial planner.

A certified financial planner has a thorough knowledge of personal finances and can help clients of all ages develop a plan to reach their goals and maximize the efficiency of their assets.

Let’s explore common scenarios where using the services of a certified financial planner might be right for you.

Not knowing where to start

Drafting your financial plan can feel daunting, and relying on a trusted fiduciary (someone obligated to work in your best interest), like a financial planner, can help you get started. Financial planners are trained to develop a diversified and suitable investment portfolio; provide retirement, estate and tax planning services, and insurance and debt management recommendations. Financial planners can get you started on the right foot by helping you better understand where you are currently and the optimal way to get to your financial goals while outlining additional factors in your planning you may not have considered.

Dealing with significant life events

Earning a promotion at work, getting married or divorced, and receiving an unexpected inheritance from a loved one are significant life events which can impact your finances and future goals. A financial planner can help you assess the changes in your life and begin charting out a plan of action that allows you to best meet your financial goals under your new personal and financial circumstances.

Preparing for retirement

Saving for retirement is an important goal for many Canadians. Knowing approximately how much you and your spouse will need in 10-20-30 years can be challenging to determine and even more so if you plan to retire early or with a desired retirement income. Financial planners can take a detailed account of your assets, including real estate, investments, debts, savings, work pensions and access to government benefits like the Canadian Pension Plan, Old Age Security, and the Guaranteed Income Supplement to formulate a comprehensive financial plan which includes recommended withdrawal limits during retirement to ensure your nest egg lasts through your golden years.

Having a sound financial plan can play a big part in helping you reach your goals. Whether you want to focus on a specific area of your life, like investment planning or simply want a new perspective from someone with the knowledge, skills, expertise and ethical obligations, a financial planner can be a valuable partner in your financial planning journey.

To learn more about certified financial planners and how to find a financial planner for your needs, visit FP Canada.

Elder Financial Abuse – Recognize it and prevent it

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June 15 is World Elder Abuse Awareness Day and the Alberta Securities Commission (ASC) is encouraging Albertans to be aware of the signs of elder financial abuse.

Elder abuse can manifest in various forms, including physical, emotional, neglect, and financial mistreatment. In Canada, financial abuse is the most prevalent type, often occurring following a crisis, the loss of a loved one, or a decline in physical or mental health, when individuals may be feeling vulnerable and isolated. Unfortunately, identifying financial abuse can be challenging. Financial abuse is often a pattern, rather than a single event, and may happen over a long period of time. It involves the illegal or unauthorized use of someone else’s money or property, which can range from forceful acts like theft or fraud to more subtle forms of pressure or deception. Victims of financial abuse, particularly when it involves friends or family members, may be reluctant to acknowledge or report the abuse, resulting in the abuse going unidentified.

Recognizing Warning Signs of Elder Financial Abuse

Being aware of the warning signs can help loved ones identify potential cases of elder financial abuse. Some signs that a senior may be experiencing financial exploitation include:

  • Unusual financial activity that does not align with their capabilities, such as online banking despite being unfamiliar with computers or making frequent ATM withdrawals despite mobility limitations.
  • Sudden liquidation of investments without a reasonable explanation.
  • Difficulty in contacting the person responsible for managing their finances.
  • Abrupt changes in living arrangements without apparent cause.
  • Emergence of a new close relationship, including romantic involvement, or a sudden shift in emotions towards a person or group.
  • Overly keen interest or involvement in the senior’s financial matters by a friend, family member, or caregiver.
  • Unwillingness to discuss financial matters or an unusual preoccupation with winning lotteries or sweepstakes.

Ways Seniors can Safeguard Their Finances:

Seniors can take proactive steps to protect themselves from financial abuse and support their well-being:

  • Foster social connections: Develop a network of trusted friends and relatives with whom you can openly discuss relationships and financial matters. If you feel someone is intruding excessively, pressuring you, or seeking unwarranted access to your finances, seek support from your trusted network.
  • Stay informed: Thoroughly research investment opportunities or sales pitches before entrusting your money to anyone. Consider consulting a registered financial advisor if you require assistance in managing your finances.
  • Monitor investments: Review financial statements or reports regularly. In case of any unfamiliar account activity, don’t hesitate to ask questions and seek clarification.
  • Appoint a Trusted Contact Person: Consider appointing a Trusted Contact Person. A Trusted Contact Person is someone you’ve given your financial advisor or firm permission to contact should the advisor suspect financial abuse or detect signs of cognitive decline.
  • Be cautious about sharing personal information: Exercise caution when asked to provide copies of sensitive information like driver’s licenses, social insurance numbers, or credit card details. Understand why the information is necessary and how it will be used.
  • Don’t allow anyone to remotely access/control your computer or phone: Be vigilant about protecting your computer or mobile phone from remote access. Be wary of any person trying to persuade you to download a program for your computer or install an app on your phone.
  • Educate yourself about investment scams: visit our Types of investment scams page or reach out to the ASC for information on common investment scams and strategies to avoid them.
  • Understand affinity fraud risks: Even if a close friend or family member recommends an investment opportunity, conduct independent research and don’t succumb to pressure to make immediate decisions.

 

For help or more information on elder financial abuse visit albertaelderabuse.ca

Naming a Trusted Contact Person: Why it Matters

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As we age, we may experience a decline in health or cognitive capacity that could result in difficulty making financial decisions independently. Unfortunately, relying on the help of family members, caregivers and friends can increase the risk of financial exploitation and fraud. One way to safeguard against potential future financial harm is by naming a Trusted Contact Person (TCP).

Who is a Trusted Contact Person?

If you invest with a financial institution or investment firm, your advisor is required to ask you about providing a Trusted Contact Person (TCP). The decision to name a TCP is optional and it’s your choice if you would like to name someone. Providing your advisor with consent to contact your TCP is similar to providing them with an emergency contact. Depending on the consent you provide, your advisor could contact your TCP in the following circumstances:

  • You cannot be reached after repeated attempts and where failure to contact you would be unusual
  • The advisor has concerns you are being financially exploited
  • The advisor has concerns about mental capacity as it relates to your ability to make financial decisions
  • Your advisor needs confirmation of your legal representative (e.g. power of attorney, executor, trustee)

For example, your advisor may contact your TCP when they cannot reach you because you have taken an extended vacation and forgot to inform them. Or, in more sensitive situations, your advisor may contact your TCP to ensure the validity of a request that they believe is out of character.

What can and can’t my Trusted Contact Person do?

A TCP’s sole purpose is to help safeguard your financial assets by being an additional resource to help your advisor make decisions that best protect your account. Your advisor might contact your TCP to discuss:

  • Concerns about your mental capacity and ability to make financial decisions
  • Signs of financial mistreatment or abuse they’ve observed
  • Concerns that you are being scammed

Your TCP is different than a power of attorney. A TCP is not permitted to manage your finances or make financial decisions on your behalf.

Who should be your Trusted Contact Person?

A TCP should be a mature family member or friend who you trust, and you should feel comfortable that they can handle difficult conversations about your personal situation if they arise. Consider choosing someone you know will protect your interests, is familiar with your support network, and is not typically involved in your financial decisions. You should also ensure the person you select agrees to take on the role and is comfortable talking to your advisor.

While naming a TCP on your account is optional and not a legal process, it can provide you valuable peace of mind knowing that your advisor has someone you trust to help safeguard your financial assets now and in the future.

To learn more about assigning a TCP to your accounts, please visit our Investing as you age page or speak to your registered advisor.

Saving and investing towards your first home with the new Tax-free first home savings account (FHSA)

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In a January 2023 poll conducted by The Harris Poll on behalf of NerdWallet, nearly two-thirds of Canadians (67%) listed owning a home as a priority. For those with the financial goal of buying their first home, the Canadian government introduced the Tax-free first home savings account (FHSA) on April 1, 2023, to help Canadians over 18 save and invest towards home ownership.

The FHSA is a registered plan that allows you to save and invest up to $40,000 tax-free toward your first home purchase. Learn what you should consider before opening an FHSA account.

1) The FHSA offers the best perks of the RRSP and TFSA

The FHSA takes the best benefits of a Registered retirement savings plan (RRSP) and a Tax-free savings account (TFSA). Your contributions to your FHSA within a particular calendar year will also reduce your taxable income when you file your tax return. Unlike RRSPs, where your withdrawals are taxed as income, withdrawals from your FHSA to purchase your first home are tax-free, including all the investment income you may have generated in the account, like a TFSA. This allows you to maximize your savings towards your first home purchase while minimizing income tax.

2) The FHSA has annual contribution limits and qualifying withdrawals

For those wanting to use this newly registered account, the Government of Canada imposed limitations on how much you can save and invest in your FHSA before incurring penalties. Starting in 2023, Canadians can contribute up to $8000 in their FHSA yearly, with any unused contribution amounts carried forward to a max of $8000. Over-contributing to your FHSA will incur a 1% tax on the over-contributed amount each month unless brought below contribution limits.

To make a qualified tax-free withdrawal or series of withdrawals, you must be a first-time home buyer when you make the withdrawal(s). To qualify as a first-time home buyer, you must not have lived in a home you owned at any time during the part of the calendar year before the withdrawal is made or at any time in the preceding four calendar years. Any non-home related purchases may result in withdrawals being treated as taxable income.

3) You can combine your FHSA savings with the Home buyer’s plan

Before the FHSA was introduced, Canadians could use the Home buyers plan (HBP) to pay for a down payment. The HBP allows you to take up to $35,000 from your RRSP without taxation for your first home purchase. Any amount withdrawn through an HBP must be paid back to the RRSP within fifteen years or you lose the contribution amount from your RRSP and it is treated as taxable income. Combining the use of both accounts, potentially gives you access up to $75,000 in savings and investments towards your home purchase.

Saving and investing toward your first home purchase can be challenging, but leveraging the unique benefits offered by the newly introduced FHSA can help you reach your goal quicker and more efficiently than any other registered plan or account currently available.

Staying ahead of investment scams in 2023

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March is Fraud Prevention Month, a time when Albertans are reminded to brush up on their knowledge of investment scams and fraud to better safeguard themselves and those they care for. One of the most prevalent types of fraud is investment scams, which impacts experienced and new investors alike. In a recent study conducted by the ASC, 48% of Albertans believed they had been approached with a potentially fraudulent investment opportunity.

By understanding the tell-tale signs of fraud and remembering the fundamental principles of making suitable investment decisions, Albertans can recognize, avoid and report investment fraud and financial abuse. Remember the following red flags to safeguard your savings or those of someone you care about from an insidious investment scam.

Leveraging fears or anxieties

A go-to tactic for scam artists is tapping into the financial stressors you (their target) may have. This could include the anxiety of not having enough for retirement, leaving a legacy for loved ones or the fear of missing out on great investments. Regardless, be mindful of anyone trying to tap into your fears or anxieties when offering an investment. It is important to pause and do your research before making any investment decisions. Do an online search to see if there are any news articles, social media posts or disciplinary actions taken against the individual or company. Even if the offer isn’t fraudulent, it may not be right for you so it’s important to understand it and its risks.

New friends or love interests taking an interest in your financial wellbeing

As we connect with friends and family and make new friendships, be wary of any new person in your life who takes an immediate interest in your finances. Fraudsters often work hard to establish trust, learn the fears or anxieties you may have, understand how much they can steal and how to manipulate you. Be sure to create boundaries and do not share your personal financial information or anything about your private matters. Also, be mindful of the personal information you share about yourself online – adjust your Facebook, or other social media account settings to “private”, and carefully consider any friend requests. Don’t share personal or financial information with anyone you’ve just met online or in-person unless you can verify their identity and have thoroughly researched any financial offers they’ve given you.

Investment offers from unregistered individuals

By law, anyone selling investments in Alberta should generally be registered with the ASC. Check to see if the firm or individual pitching the investment opportunity is registered by checking the Canadian Securities Administrators’ (CSA) National Registration Search. If the investment offer comes to you from a friend, ask where it originated from and ensure the individual or firm that offered it to your friend is registered. Contact the ASC if you suspect it may be a fraudulent investment or need assistance in confirming registration.

Exclusive offers

Investments promoted as exclusive offers just to you is a clear red flag of fraud. Scam artists often try to take advantage of those interested in investing by promoting opportunities to “get in early,” or claiming that unless you move fast, you are going to miss out on the latest trend or great “opportunity” to make money. Exclusive or time-sensitive offers drive false urgency and prevent you from researching and talking to others about the investment. Investments will always be available, and no credible financial advisor should ever rush you into a decision.

Growing your investor knowledge can help you recognize, avoid and report investment fraud. If you are interested in learning more about how to stay safe and protect yourself from fraud, consider attending a virtual or in-person Fraud Prevention Month event. If you are interested in attending a free event this month, please visit our events page.

If you feel you or someone you care for may be involved in an investment scam, do not let the embarrassment or fear keep you from speaking up. You can contact or file a complaint with the ASC or call us toll-free at 1-877-355-4488.

Keeping romance scams out of your online social and dating life

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For many in today’s increasingly connected online world, using apps and social platforms to connect with others has become convenient and common. As of 2021, eHarmony, a popular online dating platform, reported that 36% of Canadians use online dating platforms. Unfortunately, with the popularity of dating apps and social media, fraudsters are increasingly using them to scam Canadians. According to data from the Canadian Anti-Fraud Centre, romance and investment scams were among the country’s top forms of fraud. Last year alone, Albertans lost $4.5 million dollars to romance-related scams. Fortunately, there are steps you can take to safeguard your personal information and recognize, avoid and report these types of scams.

What are online investment and romance scams?

One of the go-to tactics of fraudsters is to tailor their scams to potential victims. Social media platforms can offer a wealth of valuable information – public profiles or posts can share insights into your location, interests, friends, and family members, all of which can help the fraudster craft a convincing and tangible story around their scam. Fraudsters can even impersonate someone the victim trusts, such as a friend or family member, to offer investment opportunities. In a 2020 Investor Index conducted by the Canadian Securities Administrators, 1 in 4 Canadians stated that they were more likely to trust an investment opportunity if it was recommended by someone they knew. In addition to social media, scammers patrol online groups and dating sites, seeking to establish trusting friendships or romantic relationships with potential victims to manipulate them into investing in a scam. They may pressure individuals to invest, guarantee high returns with little risk, and even convince the victim to continue investing over time, leading to substantial losses.

Protecting your social media profiles from investment fraud and romance scams

There are steps you can take today to protect yourself from investment and romance scams on social media and dating apps.

  1. Limit the amount of publicly available information about yourself online. This can be done by adjusting your privacy settings on these platforms.
  2. Be highly skeptical of unsolicited investment offers, especially from those you have just met.
  3. If an offer comes from a friend, family member or someone you trust, consider checking the offer’s legitimacy by contacting the individual by phone or in-person.
  4. Watch for the most common red flags of fraud, including pressure to invest, guarantees of high returns, and investment offers in cryptocurrencies.
  5. Do not take up investment offers from someone not registered with the Alberta Securities Commission.

While social media and dating apps have made it easier for individuals to connect, they also provide opportunities for scammers to target unsuspecting victims. By being aware of the tactics used by scammers and taking steps to keep your personal information private, you can better protect yourself from falling victim to online investment and romance scams.

ASC highlights top investment risks for 2023

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The Alberta Securities Commission (ASC) has compiled a list of the top investment risks and potential scams to watch out for in 2023, based on investor complaints, ongoing investigations, and current enforcement trends.

1. Advice from fraudulent “finfluencers”

Many people look to social media for “how-to” information, and that includes when it comes to finding information about investing. There is an increasing trend of “finfluencers” on social media. These financial influencers use their large social media followings to discuss trends and share advice on topics related to finance and investing.

Some fraudsters act as finfluencers to purposefully promote deceitful investment information through schemes like:

  • Touting: promoting an investment without disclosing compensation
  • Scalping: promoting a stock to quickly drive up the price and then selling at the inflated price

Investors should exercise caution when considering investments promoted as a sure thing. And do thorough research on the company, offer and all parties involved before investing in anything promoted on social media.

Where can you go for information? Start with a Google search about the company and offer. Even if the offer isn’t fraudulent, it may not be right for you. It’s important to fully understand anything you’re investing in.

2. New (fake) friend alert

Any investor should be cautious of new friends offering investment opportunities, particularly related to cryptocurrency or forex trading. Fraudsters often use apps and social networking sites to build relationships and establish trust with strangers, before tailoring an investment scam to their needs and encouraging them to invest increasing amounts of money through professional-looking websites. Victims some times see early returns, but these are designed to create a false sense of credibility. Eventually, the victim can no longer access the website or withdraw their money and the fraudster gives excuses or stops communication altogether.

Always be cautious about sharing any personal information online or in person. Always take time to consider the source of the information and research the opportunity on your own or in consultation with a registered investment advisor.

3. Impersonating a regulatory agent

Investors should be aware of fraudsters impersonating regulatory agents. These fraudsters may pretend to be staff from the ASC or another regulatory agency, using the agency’s logo, name, picture, credentials and social media accounts. When impersonating a legitimate staff member they pressure investors into providing personal information or transferring money. It’s important to always verify the identity of the source and remember that the ASC will never request that an individual transfer money to the organization or to any staff member. To verify the legitimacy of a request, investors can check verified ASC social media accounts on our website and contact the ASC’s public inquiries office to confirm the legitimacy of any request they receive allegedly from the ASC.

4. Spoofed Websites

There is a growing trend of spoofed websites that imitate legitimate investment firms. Often these sites offer unrealistic rates of return. These sites can appear in internet searches alongside legitimate firms and often claim to be “registered with the CSA” or authorized to sell investments in Canada. To protect yourself, always check the registration of any advisor or organization. To learn how to spot the red flags of fake websites, visit the interactive SpotTheSpoof.ca website brought to you by the ASC.

5. Celebrity endorsements

Be cautious of celebrity endorsements for investment opportunities. While it’s common for legitimate businesses to use celebrities to endorse their products, fraudsters do as well. When you see a celebrity promoting an investment, it’s important to remember that they may be being paid to do so with little to no understanding of the investment they are promoting or their image might be being used without their knowledge or consent. Fraudsters will often mimic celebrity personas, adopt similar social media handles, create cloned websites, and manipulate quotes and images to make the endorsement appear genuine. Investors should be cautious of any investment opportunity that is promoted by a celebrity.

As the new year gets underway, it’s a good time to review your investing goals and brush up on your knowledge to protect yourself from scams. Always be vigilant for red flags of fraud and thoroughly research any investment before making a decision. If you suspect any suspicious investment offers, report them immediately to the ASC’s public inquiries office. To keep up to date throughout the year, consider signing up for the ASC’s Investor Newsletter.

Kicking off the new year with resolutions to strengthen your financial fitness

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For many, the new year is a time for personal reflection and goal setting. These goals or resolutions could be to hit the gym more frequently or even read a new book every month. While these are admirable activities, the new year is also a great time for considering your wealth-building journey and setting mid and long-term financial goals. Learn four actions you can take to become more financially fit in 2023:

1) Pay down your debt

Consumer debt is a challenging burden that limits not only the money you can put towards investing for future goals but also limits your ability to afford the day-to-day cost of living. One of the best steps you can take is to develop a repayment plan for your credit card or other kinds of debt. Credit cards have an average interest rate of 19.99% (the annual percentage calculated daily and charged on any balances carried from month to month) meaning debt can quickly grow out of control if you let it. Paying down your debt every month allows more of your future earnings to be used elsewhere.

2) Create a rainy day fund

If the pandemic has reminded us of anything, it’s that the unexpected can happen and the better prepared we are, the better we can weather the storm. From your vehicle needing an unforeseen fix to an emergency home repair, creating a savings account or high-interest savings account to cover the curveballs life throws at you can be a game changer for your wealth-building journey. Slowly building up an emergency fund, equivalent to 3-6 months of income, can allow you to dedicate a larger portion of your money to investing while giving you the confidence that you won’t have to sell your investments early to cover an unexpected cost. Starting with just $25 a paycheck can net you $600 in emergency savings in a year.

3)Take advantage of your employer’s group RRSP plan

Thinking about something far off – like retirement – can feel daunting, but the earlier you start saving and investing for your golden years, the bigger the nest egg you will create for yourself. If your employer offers a voluntary group registered retirement savings plan, you can start investing for your retirement every month, and also take advantage of group plan benefits like investments with lower-cost fees. You may even be able to benefit from a match savings program in which your employer will also contribute to your plan. Once you enroll in your company’s program, you can sign up for automatic payroll deduction and take the guesswork out of routinely saving for your retirement years.

4) Invest in yourself before you invest your money

Much like physical exercise, the more you train yourself to be financially fit, the better success you will have in developing positive habits with your money and investing toward your long-term goals. Look for opportunities to strengthen your knowledge of money management and investing with credible and unbiased resources. The Financial Consumer Agency of Canada has excellent information on debt and borrowing, managing your money and even mortgage calculators. Want to learn more about investing? Visit CheckFirst.ca, brought to you by the Alberta Securities Commission to access unbiased information, tools and resources to help you learn to invest and avoid scams. You can even attend one of the many free programs on investing held throughout the province all year long, both online and in person.

The new year always brings excitement and the push to learn and advance. As you build out your areas for growth in 2023, consider including a few financial resolutions to help you spend consciously, invest wisely, and reach your financial goals today and for many years to come.