Fixed, Open or Variable Mortgage: What is the Difference?

Whether you’re buying your first home, refinancing, or renewing your mortgage, choosing between an open, fixed, or variable mortgage can feel overwhelming. In this blog, we’ll walk you through the key differences between each mortgage type to help you understand which option best suits you, your financial needs, and goals. 

To begin, we need to understand the differences between fixed, open, and variable mortgage rates.

 What Is a Fixed Rate Mortgage? 

A fixed-rate mortgage is locked into a set interest rate for the length of the term chosen. At Mainstreet, terms typically range from one to five years. The biggest advantage of a fixed mortgage rate is that your payments remain the same throughout your term. Once the rate is locked in at the beginning of the term, it does not fluctuate, even if interest rates or market conditions do.  

This means that when your payments are applied to the mortgage, the amount that goes to the interest and the principal in each payment remains the same throughout the term. However, at Mainstreet, if you’ve locked in your rate and the rates decrease in the first 90 days, you automatically get the new rate. 

Benefits of Choosing a Fixed Rate Mortgage

Fixed-rate mortgages come with several advantages that can make homeownership more manageable, especially if you prefer predictability and long-term planning. 

The biggest benefit? Stability. Since your monthly payments are consistent, you can rest easy knowing your rate won’t change if interest rates rise. This allows you to budget more confidently, as your mortgage payments will remain the same throughout your term. 

You’re also protected from interest rate increases. If market rates go up, you’re locked in at your lower rate, which can lead to long-term savings and peace of mind, especially in a fluctuating economy. 

Long-term financial planning becomes easier. With a fixed-rate mortgage, it’s simpler to plan for other goals, like saving for education, investing, or managing household expenses, because your payment is predictable month to month. 

Prepayment flexibility is also available. At Mainstreet, you can typically put anywhere from 5%–20% down on the original principal per year with no penalty. You can also make lump sum payments or increase your regular mortgage payment (up to double) at any time. This is an effective way to pay off your mortgage sooner and reduce interest. 

A fixed mortgage rate is great for someone who is planning on staying in the home long-term and wants consistent payments and protection against rising interest rates. If you think this is the right fit for you, book an appointment with a Mainstreet advisor to get started today.

 What Is a Variable Rate Mortgage?

A variable mortgage has a fluctuating interest rate, typically set at a 5-year term. Since variable rates are not locked in, they fluctuate based on the current prime rate, which is influenced by the Bank of Canada. When the prime rate changes, your mortgage rate and most likely your payments will change too, and if it goes down, your rate will likely decrease as well. 

With a variable mortgage, your payment amount can either increase or decrease over time. While the flexibility can be beneficial, it also comes with some risks.

Benefits of Choosing a Variable Rate Mortgage

Let’s take a closer look at variable-rate mortgages and see how they could benefit you. If interest rates stay the same or even decrease, you could pay less over the term of the loan than you would to a locked-in fixed rate. When rates are lower, a larger portion of your payment can go towards the principal, helping you pay off your mortgage quicker and save on interest costs. 

A variable mortgage is great for someone with a little bit more risk tolerance, with some wiggle room in their budget to absorb any potential changes. If you plan on being in your home short term or refinancing in a couple of years, a variable rate could be good for you and offer short-term savings. Lastly, if you are predicting that rates will go down, taking advantage of a variable mortgage can help you save money in the long run. 

At Mainstreet, we are here to help you understand how changes in interest rates could impact your mortgage, and together we will work with you to ensure you have the right solution that fits your financial goals and comfort level.

What is an Open Mortgage?

An open mortgage offers more short-term freedom than a fixed or variable option. It isn’t tied to a long-term commitment, which means you can make changes or repay your mortgage early without facing penalties. 

Open mortgages are typically offered for shorter terms — usually between six months and one year — and generally have higher interest rates. But for some homeowners, the added flexibility can outweigh the higher cost. 

This type of mortgage is often a good fit if you’re planning to make changes soon, such as selling your home, refinancing, or adjusting your mortgage strategy. If you value control over timing and want to keep your options open in the near term, an open mortgage might be the right solution.

Benefits of Choosing an Open Mortgage

Open mortgages are best suited for homeowners who need short-term flexibility or expect changes to their financial situation in the near future. 

One of the biggest advantages is the ability to make large pre-payments or pay off your mortgage in full at any time without penalties. This makes open mortgages ideal if you’re planning to sell your home, refinance, or simply want the freedom to pay down your loan quickly. 

They can also work well if you’re anticipating a lump sum of money, such as an inheritance, work bonus, or proceeds from the sale of another property. With an open mortgage, you can apply those funds directly to your mortgage without any fees or restrictions. 

If you’re relocating for work, in between homes, or unsure about your long-term goals, an open mortgage gives you some breathing room without locking you into a longer term. Since the term is usually short — often six to twelve months — it provides the flexibility to adjust your mortgage as your plans evolve.

Comparing Fixed, Variable, or Open Mortgages

To help you understand how each mortgage type could impact your monthly payments and total interest costs, let’s compare how a fixed, variable, or open mortgage might affect your monthly payments. We’ll use the same scenario for each: a $500,000 mortgage with a 5-year term, or 1 year for an open mortgage and a 25-year amortization. 

First, let’s look at the fixed-rate mortgage. At an interest rate of 4.29%, your monthly payment would be $2,709.29. After five years, your remaining balance would be $437,442.11, and you would have paid $99,999.51 in interest over the term. 

With a variable mortgage at 4.45%, your monthly payment would be slightly higher at $2,764.99. After five years, your remaining balance would be $438,919.95, and the interest paid over the term would be $104,819.35. Don’t forget that these payments could fluctuate up or down over the 5 years based on the prime rate. 

Lastly, for an open mortgage with a 1-year open variable rate of 9.75%, your monthly mortgage payments would be $4,455.69. Over the one-year term, you’d pay $48,533.33 in interest, leaving a remaining balance of $495,065.05. But remember, if you make additional payments to your mortgage during that time, you can reduce your interest costs and pay down the principal faster. 

For a side-by-side comparison, view the chart below. Want to try your own scenario? Try our mortgage calculator on our website to compare payments and mortgage rates.

There’s more to a mortgage than a great mortgage rate

When you’re thinking about getting a mortgage, one of the first things that likely comes to mind is “what will my mortgage rate be?” While the mortgage rate can be important, there’s much more to a great mortgage than just the number on the paper. The right mortgage should include flexibility and expert advice that fits your unique needs. 

In today’s world, where financial plans and life goals can shift quickly, having flexibility, support, and personalized advice built into your mortgage can save you stress, money, and even your long-term financial goals. 

Let’s look beyond the mortgage rate and see what makes a great mortgage.

  1. Flexibility when Life Changes 
  1. A Personalized Mortgage That Works for You 
  1. Various Payment Options 
  1. Advice That Makes a Long-Term Difference 
  1. Renewing or Refinancing? 
  1. Buying Your First Home

1. Flexibility when Life Changes  

After buying your home, many homeowners assume they’ll stay put and keep the same mortgage for the full five-year term. However, life events can happen and cause you to change your thinking. Maybe you get a job offer in another city, decide to upgrade to a larger home, or come into an inheritance and want to pay off your mortgage earlier.  

With Mainstreet, you have several options available to you to make sure your mortgage fits your needs. You can choose to blend and extend your mortgage without a penalty, or port your current mortgage over to your new home. Blend and extend’ allows you to update your mortgage term and rate without fully refinancing, while ‘porting’ means you can transfer your existing mortgage, including your rate and terms, to a new property. These options allow you to update your mortgage without starting from scratch. 

A great mortgage deal isn’t just about the rate; it’s about having the choices available when life changes. 

2. A Personalized Mortgage That Works for You

Every Mainstreet member is unique; that’s why our mortgage advisors take the time to get to know you and understand your needs and priorities. Whether you’re buying your first home or renewing your mortgage, we know that a “one size fits all” doesn’t fit everyone.  

At Mainstreet, we offer various customized terms, such as:  

  • Open vs. closed mortgages 
  • Amortization periods that fit your budget 
  • Prepayment privileges 
  • Portable mortgages (take it with you when you move!) 

A fixed-rate mortgage can be ideal for budgeting peace of mind, while a variable rate may suit those who expect interest rates to decline. Choosing an open mortgage may help if you plan to pay off your loan early, while a closed mortgage often comes with a lower rate. Each mortgage is unique to fit you; we take the time to understand you and the needs you have. We want to ensure you’re getting the right mortgage rate with the right terms for your life today and in the future. Your life isn’t one-size-fits-all—your mortgage shouldn’t be either. 

3. Various Payment Options

Your mortgage should adapt to your life, not the other way around. That’s why Mainstreet offers flexible payment options to help you stay in control of your finances. Whether you prefer to pay weekly, bi-weekly, or monthly, you can choose a schedule that aligns with your income and budgeting habits.  

Mainstreet mortgages also allow you to ‘bank’ extra payments if you’d prefer, so if life throws you a curveball, you can skip a payment using the funds you’ve already built up. And if you get a raise at work or come into extra funds, our flexible prepayment options let you pay down your mortgage faster and reduce your overall interest. It’s all about giving you more ways to manage your mortgage on your terms.

4. Advice That Makes a Long-Term Difference

The best mortgage rates are easy to compare, but it’s advice and guidance that truly shape your financial future. That’s why it’s important to work with a good mortgage advisor you can trust with one of the biggest purchases of your life. 

At Mainstreet, you’ll be connected with a dedicated mortgage advisor who will walk you through every step of the mortgage process—from pre-approval to closing. They’ll take time to get to know your goals, lifestyle, and full financial picture, not just your rate needs.  

Whether you’re buying your first home, upsizing, or renewing, our mortgage advisors are here to ensure your mortgage fits where you are now and where you want to go. It’s not about selling you a product. It’s about building a plan that works for you today and your future.

5. Renewing or Refinancing? Don’t Just Sign and Go

Many people renew their mortgage with the same lender simply out of convenience; in fact, many Canadians renew without reviewing their options, often missing out on better mortgage rates or more flexible terms. But your financial needs may have changed, and your mortgage should reflect that. 

If you’re coming up for renewal, now is the perfect time to 

  • Review your mortgage rate and term 
  • Restructure for future plans, such as renovations or debt consolidation 

In your appointment, our Mainstreet mortgage advisors will walk you through all the options available to you, so you get more than a great mortgage rate; you get a mortgage that works for you.

Buying Your First Home? Start Here

First-time homebuyers can often feel overwhelmed by the homebuying process, but just know you don’t have to do it alone. From getting pre-approved, understanding the fine print, and getting the right mortgage, we make the whole process simple and supportive.  

With a pre-approval, you’ll know exactly what you can afford, making your search easier and less stressful. If you are a first-time homebuyer, read all our tips and tools to help guide you every step of the way.

The Bottom Line

A low mortgage rate is great, but at Mainstreet, you get so much more. Along with expert advice, flexible features, and a smooth mortgage process, you’ll enjoy added perks like a free chequing account and bonus rates on investment products!  Being a credit union, we share our profits with you. The more business you do with us, the more we give back to you! Mainstreet is invested in you, we’re here to help you build a strong, flexible financial future that fits your unique needs. Book an appointment today with a Mainstreet Mortgage advisor or visit your local branch to get more than just a great mortgage rate.

Investing During Economic Uncertainty: Why Financial Advice Matters More Than Ever

Economic uncertainty and market volatility can feel overwhelming, especially when it comes to your savings, investments, and long-term financial goals. With headlines constantly shifting—rising inflation, fluctuating interest rates, and unpredictable markets—it’s natural to feel uncertain about the future. 

The good news? You don’t have to navigate it alone. Working with a Mainstreet Credit Union and Aviso Wealth Wealth Management Advisor ensures you can stay on track, make informed decisions, and feel confident about your financial future. In fact, we’ve anticipated events like this may happen. The plan we set up for you is agile, and our investment recommendations are resilient and aligned with your financial goals–both short-term and long-term. 

Understanding Market Volatility & Investing During Economic Uncertainty

Markets rise and fall—it’s part of the natural economic cycle. However, when we experience periods of increased volatility it can be tempting to react emotionally by pulling out of investments or making sudden changes to financial plans. While these reactions are understandable, they can sometimes do more harm than good. 

As illustrated below, Bull Markets (positive returns) have consistently exceeded Bear Markets (negative returns). Regularly discussing your personal risk tolerance and risk capacity with your advisor is essential to ensuring our investment recommendations are the right fit for you.

Bull vs bear market graph since 1942. Bull markets have been outrunning bear markets since 1942.
For illustrative purposes only. 

But economic uncertainty isn’t just about the stock market. It also affects: 

  • Inflation: Higher prices can reduce purchasing power and affect your ability to save. 
  • Interest rates: Rising or falling rates can impact mortgages, loans, and investment returns. 
  • Job security & income stability: Uncertain economic conditions may influence employment and career planning. 

Understanding how these factors affect your financial plan is crucial, and working with an advisor helps you stay proactive rather than reactive.

Why Financial Planning Is More Important Than Ever

During times of uncertainty, a well-structured financial plan provides stability. It allows you to focus on your long-term goals rather than reacting to short-term market movements. A Mainstreet Credit Union and Aviso Wealth Wealth Management Advisor will help you:

Assess your financial situation: Understanding your income, expenses, and assets is key to making informed decisions. Using a cash flow management software, such as this free one from the Government of Canada, can help you stay on track, understand your required expenditures, and be prepared for any unexpected situations.
Manage risk effectively: Diversification and asset allocation strategies can help protect your wealth. By diversifying your portfolio across different asset classes (Canadian Equity, Global Equity, and Fixed Income for example), you can achieve greater consistency in returns and protect yourself against market volatility. 

The Quilt Map below, showcases the annual performance of various asset classes over time, highlighting that no single asset class consistently outperforms others every year. By diversifying investments across various asset classes, you can better manage risk and aim for more stable long-term returns.

A quilt map highlighting different assets since 2012.
For illustrative purposes only.

Stay disciplined with your investment approach: Avoiding any emotional decisions by reacting to the financial market today helps keep your long-term financial goals on track. Historically, stock markets have rebounded from selloffs, with some of the best days coming on the heels of the worst; so, it typically pays to remain invested through volatile times.

A graph of $10,000 invested in the S&P 500 over 20 years, showing if you were to miss no weeks, 1 week, 5 weeks, and 10 weeks.
For illustrative purposes only.

Plan for different economic scenarios: Your advisor can help you prepare for inflation, interest rate changes, and unexpected life events. Historically, despite many periods of increased volatility, markets have remained resilient. 

In the illustrations below, there is an example of investing $10,000 in 1989 and staying fully invested in the S&P 500 index until 2024. Listed to the right are various economic events that created uncertainty, the resulting market decline, and returns 1 and 2 years later. The annualized return over the 35-year period of 11.48% resulted in portfolio growth to just over $448,000, reinforcing the need for a long-term focus. Investing during economic uncertainty requires sticking to your financial plan and ensuring it is up to date.

A graph showing a $10,000 investment and a chart showing moments of economic uncertainty since 1950.
For illustrative purposes only.

Now Is the Time to Take Action

Rather than letting uncertainty create stress, take a proactive approach to your financial future. Schedule a financial review with one of our advisors today to: 

  • Gain clarity on your current financial position. 
  • Explore strategies to protect your wealth and maximize opportunities. 
  • Ensure you’re prepared for whatever the economy may bring. 

Let us help you build confidence in your financial future. Book an appointment with a Wealth Management Advisor today. Your financial well-being is too important to leave to chance. 

Let us help you build confidence in your financial future—no matter what the market does. 

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

Credit Card Basics: Understanding How Credit Cards Work

Credit cards are more than just a convenient payment method, they can be powerful financial tools that can help you build your financial future and offer rewards like points or cash back. However, without a clear understanding of how credit cards work, they may also lead to unexpected financial challenges. 

In this guide, we’ll break down exactly how credit cards work, how to use them responsibly and share tips to help improve your credit score and financial future. Let’s get started!

What is a Credit Card?

A credit card lets you pay for goods and services in stores, online, by mail, or over the phone up to a preset limit. Unlike a debit card, which pulls money directly from your bank account, a credit card lets you make purchases on credit—meaning you’re borrowing money. You then pay back the amount you’ve spent, in full or in installments, before your balance is due. 

Think of it as a short-term loan that you can use repeatedly, as long as you pay off what you owe. By understanding how credit cards work, you can avoid common pitfalls and take full advantage of their benefits—whether that’s building your credit or earning rewards.

Understanding Credit Limits

Now that you understand what a credit card is, let’s explore how credit card limits work. When you’re approved for a credit card, the issuer assigns you a credit limit. This is the maximum amount you can borrow on your credit card. Your limit is based on factors like your income, credit history, and credit score. 

For example, if your credit limit is $3,000, you can make purchases up to that amount. To continue using your credit card as a payment method, you will need to pay down the balance to create some room for future expenses.  A good rule of thumb is to use no more than 30% of your available credit. Paying down your balance regularly not only frees up credit but also helps maintain a healthy credit score.

How Credit Card Payments Work

Each month, your credit card issuer will either mail you a statement or make it available online. Your statement will show you the following: 

  • Your transaction history: A detailed list of purchases, including the amounts, and dates. 
  • Your total balance: This is the total amount you owe at the end of the statement period. 
  • Your minimum payment: The smallest amount of money you must pay by the due date. 
  • Your due date: The deadline to make your payment to avoid late fees and a negative impact on your credit score. 

To keep a healthy credit score, you can either pay the full balance, which is always the best option or make at least the minimum payment. Just remember, carrying a balance means you’ll be charged interest and can indirectly impact your credit score by increasing your credit utilization ratio. 

To make a payment on your Mainstreet Credit Card, you can log into your online banking or your CardWise Account. To avoid missing payments, you can set up autopay or create an alert for when your payment is due. 

If you are struggling to meet your payments, book an appointment with one of our advisors—we’re here to get you back on track.

Credit Card Interest & APR Explained

When you apply for a credit card, you might notice the interest rate or the Annual Percentage Rate (APR) listed. APRs can vary between cards and the applicants. Most credit cards issue a standard APR, but your rate might depend on factors like your credit score. Generally, a lower credit score can result in a higher interest rate. 

Beyond individual qualifications, different types of APRs apply depending on how the credit card is used. For example, regular purchases, balance transfers, and cash advances often have different rates. Check out all our offers to see if there are any that you can take advantage of! 

If you’re looking to secure a lower credit rate, you can take steps to improve your credit score, pay off outstanding debt, or actively find a credit card with a low interest rate. If you need help finding the card that’s right for you, you can try our interactive card selector to see what card might be the best option for you. 

Note: Most credit cards offer a grace period (usually 21 days), during which you can pay off your balance without incurring interest. The best way to avoid paying extra? Always pay your balance in full before the due date. 

Mainstreet Credit Union offers different personal credit cards with a range of interest rates to fit your needs.

Common Credit Card Fees

Every credit card has unique fees based on the type of card. Some fees can catch you off guard if you’re not fully informed. It is important to understand all the fees before you get a credit card. Here are some common fees to know about: 

  • Annual fees: Some cards charge a yearly fee for premium benefits. 
  • Late payment fees: If you miss your due date, you could be charged a penalty. 
  • Cash advance fees: Withdrawing cash from an ATM with your credit card often comes with higher interest rates. When selecting your credit card, look for the “cash withdrawals” specific interest rate if you plan to use your credit card to withdraw cash. 
  • Foreign transaction fees: Some cards charge a higher transaction fee for transactions outside of Canada. 

Choosing the right credit card (and reading the fine print) can help you avoid any unnecessary fees.

How to Build Your Credit Score with your Credit Card

Using a credit card wisely can increase your credit score, which helps when you’re applying for loans, mortgages, or even renting an apartment. Here’s how: 

  • Making your payments on time boosts your payment history, which is the biggest factor in your credit score. Pro tip: you can set up autopay, so you know you’ll always pay your credit card on time! 
  • Keeping your balance owing low compared to your credit limit improves your credit utilization ratio. This is the percentage that you are using of the total credit available to you and it pays a large role in how your credit score is calculated. 
  • Establishing a long history of responsible credit use demonstrates to lenders that you’re financially reliable. This is why it is important to start building credit as soon as you are old enough. 
  • Monitor Your Credit: Regularly check your credit score to track your progress and identify any discrepancies early. 

Increasing your credit score won’t happen overnight, but by consistently following the steps listed above you can gradually increase it over time. If you’d like to discuss other ways to improve your credit score, you can reach out to a Mainstreet Advisor online or in branch.

Different Types of Credit Cards 

Mainstreet Credit Union offers a range of personal and business credit cards with features like low interest rates1 or annual fees, travel perks, or cash back2. Depending on the card, you may receive perks such as purchase protection3, mobile device insurance3, and fraud protection3.  

If you’re a frequent traveler, the World Elite® Mastercard might be right for you. It offers reward points4 that can be redeemed on flights or hotels**, perks like travel insurance5 and baggage coverage5, and 24/7 travel assistance5. 

Choosing a card that matches your lifestyle can help you get the most out of your spending. If you’re interested in earning points, use our points calculator tool to understand how many points you could earn in annually4. 

Ready to take the next step? Whether you’re thinking about getting a new credit card, want to upgrade, or simply want to ensure you’re using yours effectively, you can book an appointment with a Mainstreet advisor, apply online, or visit one of our branches to start the process.  

Remember: Understanding how credit cards work can empower you to make smart financial decisions and set yourself up for success!

*Terms & conditions 

**For full details on the Flex Rewards program, visit Home | Flex Rewards. 

1 The interest rates are in effect from the date the credit card is approved. For more information, please reference your cardholder agreement or visit online www.collabriacreditcards.ca/cardholder-agreement. 

2 The base value of one reward point is equal to one cent (a penny per point). The cash equivalent shown for illustration purposes only is based upon the redemption of these points as a statement credit. The valuation is for cash equivalent only; the value of redeeming for merchandise and travel may vary. 

3 Insurance coverage is underwritten by American Bankers Insurance Company of Florida (ABIC). ABIC, its subsidiaries, and affiliates carry on business in Canada under the name of Assurant®. ®Assurant is a registered trademark of Assurant, Inc. Details of insurance coverage, including definitions, benefits, limitations and exclusions, are in the Certificate of Insurance. The Certificate of Insurance is available online at collabriacreditcards.ca/insurance. Insurance coverage is subject to change. 

4 Reward points are earned on net purchases only. Any Cash-like Transactions including Cash Advances, Balance Transfers, and interest charges, fees, payments, credit or debit adjustments and any amount other than Purchases that may be charged to your Account with your Card or Convenience Cheques, do not qualify for Points. For more information visit collabriacreditcards.ca/rewards 

5 Insurance coverage is underwritten by Desjardins Financial Security Life Assurance Company. Details of insurance coverage, including number of days of coverage, definitions, benefits, limitations and exclusions are in the Travel Insurance Contract. Please visit collabriacreditcards.ca/insurance for complete details. Insurance coverage is subject to change

Why Time in the Market Beats Timing the Market

One of the biggest investing mistakes is trying to predict market ups and downs. Many people hesitate to invest because they worry about buying at the wrong time, but in reality, long-term investing consistently delivers better results than short-term market timing. 

Stock markets naturally experience ups and downs, but history shows that they trend upward over time. Instead of stressing about when to buy or sell, the key is to stay invested and allow your savings to grow over time. 

So, what does history tell us about this approach? Let’s take a closer look.

A History of Resilience

History proves that patience is key when it comes to investing. Even during major downturns, markets have rebounded—and rewarded those who stayed invested.  

A prime example is the S&P 500 Index, which tracks 500 of the largest publicly traded companies in the U.S. It has weathered recessions, financial crises, and even global events like the COVID-19 crash. On February 19, 2020, it hit a record 3,386 points, only to drop sharply weeks later. But by August 18, 2020, it had not only recovered but reached a new high of 3,389 points. 

Looking further back, the S&P 500 has delivered an average annual return of 9.4%, growing to nearly 12% with dividends reinvested. The same pattern holds for other major markets, including Canada’s S&P/TSX Composite Index. The lesson? Short-term drops happen, but staying invested allows you to benefit from long-term market growth.

Graph showing S&P 500 from January 2020 to Aug 2020
For illustrative purposes only

The Cost of Trying to Time the Market

Market ups and downs can feel nerve-wracking, but trying to time the market—buying at the lowest point and selling at the peak—is nearly impossible. Even the most experienced investors can’t predict short-term movements with certainty. 

The cost of mistiming the market can be huge. Over the past 20 years, an investor who remained fully invested in the S&P 500 saw significant growth. But missing just the 10 best-performing days could have cut those returns in half. This is why staying invested, being patient, and letting compound interest work its magic is the smarter strategy.

The Best Time to Start is Now

Think you need perfect timing to succeed? Think again. Even if an investor had entered the market just before the 1929 stock market crash, they would have still seen more than 100-fold growth over time—without dividends. With dividends reinvested, that figure climbs beyond 200 times the original investment. 

The takeaway is simple: the best time to start investing is when you have the funds. The second-best time is today. By starting now, you allow compound interest to grow your wealth effortlessly over time.

Build Your Wealth with Confidence

Investing can feel overwhelming, especially with so much market noise, but you don’t have to navigate it alone. At Mainstreet Credit Union, our Mainstreet and Aviso wealth advisors are here to help. Whether you’re saving for retirement, building wealth, or just starting your investing journey, our team will guide you every step of the way. 

With access to diversified investment options and expert advice, you can feel confident about your financial future. The key is to start—and stay invested.  

Ready to take the next step? Visit a branch or Book an appointment with one of our Mainstreet and Aviso Wealth Advisors today, or explore Q-trade Direct Investing® for a self-directed approach.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

How RESPs Work: Building a Strong Financial Future for Your Child

Welcoming a new child is an exciting and joyful time. While adjusting to the joys and challenges of parenting, one of the things you don’t want to forget about is planning for their future – and more specifically their education. One of the easiest and most effective ways to prepare for your child’s future is by opening a Registered Education Savings Plan (RESP) to help you save for your child’s tuition, school supplies, housing, and more. Withdrawals can be made when they begin their post-secondary journey. Let’s explore how an RESP can be a game-changer for your child’s future. 

  1. What is an RESP 
  1. Power of Compound Interest 
  1. Tips to Consider Before opening an RESP 
  1. Why Open an RESP? 
  1. Who Can Open an RESP? 
  1. What About Saving for my Child’s First Home or Car?

What is a Registered Education Savings Plan (RESP)?

A Registered Education Savings Plan (RESP) is a specialized investment account designed to help parents, family, and friends save for a child’s future post-secondary education. Contributions grow tax-free within the plan, which means the earnings are not taxed until they are withdrawn. This tax deferral allows your savings to grow faster over time. 

You can contribute up to a lifetime maximum of $50,000 per child. With the addition of government grants, like the Canada Education Savings Grant (CESG), and tax-deferred growth, your savings can stretch even further. When your child withdraws from the RESP, the income is taxed in their name. Since students usually have lower taxable income, this often results in minimal, or no taxes owed. 

How to Make the Most of Your RESP

  1. Start Early 
    Opening your RESP the younger your child is, the more time your investments have to grow and take advantage of the power of compound interest. Starting an RESP while your child is young gives you more time to save for their future. 
  1. Save What You Can Afford 
    Contributions don’t have to be large. Every bit counts and even small amounts add up over time! 
  1. Be Consistent 
    Consistency is key. Set up automatic contributions to stay on track with your savings goals. This ensures regular savings without needing to think about it, which is especially helpful when you have a busy schedule as a new parent. 
  1. Take Advantage of Government Grants 
    The Canadian government provides the Canada Education Savings Grant (CESG) which contributes 20% annually to the first $2,500 you deposit into an RESP. That could add up to $500 yearly to boost your child’s RESP! 
  1. Know the Limits 
    The lifetime contribution limit for each RESP beneficiary is $50,000. 
  1. Look into investment Options 

RESPs can hold a range of investments such as Mutual Funds, GICs, or stocks. Meeting with a Mainstreet and Aviso Wealth Advisor can help you choose the right investment based on your goals and risk tolerance. 

By following these 6 easy tips you can make the most out of your RESP and set your child up for a bright financial future.

Why Should You Open an RESP for Your Child?

Opening an RESP is one of the best ways to give your child a financial head start for their education. With the rising costs of tuition, housing, and school supplies, having dedicated savings can make a significant difference in covering expenses.  

RESPs offer a few key benefits: 

  • Reduce Student Debt: By saving early, you can help your child avoid or minimize student loans, easing their financial stress after graduation. 
  • Encourage Higher Education: With financial support in place, your child can focus on their studies rather than worrying about tuition costs 
  • Tax-Deferred Growth: All earnings and government grants grow tax-free within the RESP, maximizing the impact of your savings 

You can also involve your child in the process by encouraging them to contribute small amounts, such as birthday money or cash gifts. This not only builds their savings but also teaches valuable financial habits early on. 

Want to learn more? Speak with a Mainstreet and Aviso Wealth Advisor to explore how an RESP fits into your family’s financial goals.

Who Can Open an RESP?

Many people assume that only parents can open an RESP, but that’s not the case. Anyone—including grandparents, aunts, uncles, or even family friends—can open an RESP to help a child save for their post-secondary education. 

Additionally, multiple people can contribute to the same RESP account. This makes it an excellent gift option for special occasions, such as birthdays or holidays, where family members can contribute toward a child’s future rather than giving traditional presents. 

Not sure which RESP option is right for your family? Speak with a Mainstreet and Aviso Wealth Advisor to explore your options and start planning today.

The Power of Compound Interest: Why Starting Early Matters

One of the biggest advantages of opening an RESP early is the power of compound interest. Because RESPs combine government-matching grants with your contributions, they grow a little differently than regular savings accounts – maximizing returns over time.  

Here’s how starting early can make a big difference: 

  • If you contribute $200 per month from birth until age 18, assuming a 5% annual return, your child could have $95,494.45 ready for post-secondary education. 
  • If you wait until your child is 10 years old to start saving with the same monthly contributions and return rate, your investment will grow to only $31,097.25 by age 18—less than a third of the amount you’d have by starting early. 

This is the power of compound interest: the earlier you start, the more time your money has to grow. Even small contributions can add up significantly over the years.  

Curious as to how much you could save? Try our Education Savings Calculator to explore scenarios tailored to your family’s goals.

What About Saving for My Child’s First Car or Home?

An RESP is an excellent way to save for your child’s education, but what about other important milestones, like their first car or home? While RESPs are designed specifically for education savings, a Tax-Free Savings Account (TFSA) can help with broader financial goals. 

A TFSA is a flexible savings tool that allows money to grow tax-free and be withdrawn at any time without penalties. This makes it ideal for funding major expenses outside of education. 

Key Benefits of a TFSA: 

  • Tax-Free Growth: Unlike an RESP, which is taxed when funds are withdrawn, a TFSA allows your investments to grow and be withdrawn tax-free. 
  • No Restrictions: TFSA funds can be used for anything—education, a first car, a down payment on a home, or even travel. 

Although your child cannot open a TFSA until they turn 18, you can start saving early by contributing to your own TFSA and later transferring the funds when they become eligible. This strategy helps build a financial cushion for future expenses. 

By pairing an RESP with a TFSA, you can set your child up for success in both their education and other key life events. 

Want to explore your savings options? Speak to a Mainstreet and Aviso Wealth Advisor to learn how to make the most of both accounts.

Ready to start Investing?

An RESP is one of the most effective ways to set your child up for future success—helping them afford post-secondary education while reducing financial stress. The sooner you start, the more you can benefit from government grants, compound interest, and tax-free growth.  

Take the first step in saving for your child’s future by visiting a branch or booking an appointment with a Mainstreet and Aviso Wealth Advisor today.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

What is Socially Responsible Investing?

Over the past 25 years, more Canadians have shown a greater interest in incorporating socially responsible investments into their financial plans. Socially responsible investing is becoming a priority for many people as they look to combine their financial growth with a positive social and environmental impact. 

Yet, when you hear the term ‘Socially Responsible Investing’, the meaning and impact might remain unclear, or you might wonder, ‘Why does it matter?’. In this blog, we’ll break down what socially responsible investing is, how it works, and highlight its benefits, to help you align your values with your financial goals. Ready to learn how your investments could make a difference? Let’s dive in!

  1. What is Socially Responsible Investing? 
  1. How Socially Responsible Investing Works and The Benefits. 
  1. The Benefits of Socially Responsible Investing as a Mainstreet Member

What is Socially Responsible Investing?

Socially Responsible Investing (SRI) is more than just growing your money – it’s about making a difference. SRI is an investment approach that balances financial returns with ethical considerations. This investment approach balances financial returns with ethical considerations by focusing on Environmental, Social, and Governance (ESG) factors. 

Key ESG factors that drive socially responsible investing include: 

Women in Leadership: Companies with more women on their boards or executive teams tend to perform better on several financial measures; including Return on Equity (ROE), Return on sales (ROS), and stock price growth. 

Community Relations: Including Indigenous communities in project planning can lead to more sustainable and ethical business practices. 

Executive Compensation: Addressing the wage gap between executive members and their employees fosters equality and builds trust. 

Climate Change and Water Scarcity: Companies transitioning to a low-carbon economy and addressing water scarcity are often better poised for the future. 

Supply Chain Management: Monitoring workplace conditions in their supply chains helps avoid reputational, legal, and financial risks.

Graph comparing index returns of a company with no ESG leadership and with ESG leadership.
For illustrative purposes only.1

The chart above highlights the performance of return on investments with and without ESG leadership. Take a closer look at the separation from 2014 and on. This highlights investors’ confidence and returns with ESG leadership in recent years.

How does Socially Responsible Investing work and What are the Benefits?

Now that we have covered what socially responsible investing (SRI) is, let’s explore how to identify socially responsible investments that align with your values. Here are a few popular strategies to determine which investments meet the ethical and sustainable criteria:  

Impact Investing: Investments made in companies or organizations that generate measurable social or environmental benefits alongside financial return. Examples include sectors like healthcare and renewable energy initiatives. 

Positive and Negative Screening: This involves selecting or excluding certain industries based on a positive or negative ESG performance. For example, you might include companies focused on clean energy while avoiding industries like tobacco or weapons manufacturing. 

Shareholder Engagement: Investors use their influence as shareholders to encourage better corporate behaviour. This could mean voting on key privileges and engaging in discussions with other companies to improve overall ESG performance. 

These strategies empower investors to align their values with a more sustainable and ethical future. Want to explore how these strategies could work for you? Speak to a Mainstreet and Aviso Wealth Advisor today.

The Benefits of Socially Responsible Investing as a Mainstreet Member

Incorporating sustainable investing into your financial plan can offer you three distinct advantages: 

  1. Improved Risk Management: Companies with strong ESG practices are often better prepared for regulatory changes and market shifts. 
  1. Contribute to positive societal change: Your investments can drive real change by supporting organizations committed to issues such as climate change or social inequality. 
  1. Enhancing long-term financial performance: Research shows that businesses prioritizing ESG factors often deliver stronger, more resilient financial results over time. 

At Mainstreet Credit Union, responsible investing aligns with our core values. We prioritize our members, actively support our local communities, and engage with local businesses. Many of our Mainstreet and Aviso Wealth Advisors hold their Responsible Investment Specialist (RIS) designation from the Responsible Investment Association (RIA). This designation ensures our wealth advisors are well-versed in ESGs and can help tailor your investment portfolio to reflect your values. 

When we create your personalized portfolio, we compare options with and without socially responsible investments. This approach allows you to understand the ethical impact of your investments and gives you confidence that your investments are making a difference.

Take the Next Steps

Ready to align your values with your financial goals? Visit your local branch or book an appointment with one of our Advisors. 

Whether you’re new to investing, refining your financial plan, or planning for retirement, we’re here to guide you toward a sustainable and ethical investing strategy that meets your needs.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

Building a Strong Financial Plan for Your Future

Planning your financial future can feel overwhelming with so many decisions to make and unfamiliar terms to navigate, it can be hard to know where to start. A well-crafted financial plan simplifies this process, providing clarity and direction to help you achieve your life goals—whether that’s buying a home, saving for retirement, or growing your wealth. Think of a financial plan as your personalized roadmap—crafted to fit your unique goals and dreams.

What is a financial plan?

A well-structured financial plan provides a clear strategy to help you manage your money, prioritize your goals, and build long-term financial security. A personalized plan enables you to stay organized and make the most of your income to ensure you meet your financial goals. 

A financial plan isn’t one-size-fits-all. It should be customized to fit your life stage, income level, and personal goals. At its core, a comprehensive plan includes key elements such as budgeting, saving, investing, risk management, and planning for future milestones like retirement or buying a home. 

Beyond providing clarity, a financial plan can help you avoid common financial pitfalls, such as overspending or under-saving for retirement. It can also answer essential questions, like: 

  • What’s the best way to invest in my financial goals? 
  • How much home can I afford? 

Working with a professional can help you make the most of your financial plan. A Mainstreet and Aviso Wealth Advisor can guide you through the process, helping you set specific, measurable goals while ensuring your plan evolves with life changes like career growth, family milestones, or shifts in the market. 

With a personalized financial plan in place, you’ll feel more confident making informed decisions and staying on track toward your goals. In the next section, we’ll explore the financial tools available to support your plan and how to choose the right ones for your needs. 

What Financial Tools Are Right for Me?

Choosing the right financial tools is essential for building a strong financial plan. The right tools can help you save, invest, and grow your wealth in alignment with your goals. 

Some commonly used tools include: 

  • Mutual Funds: Professionally managed pooled investments that offer diversification and exposure to various markets, ranging from conservative to higher-risk strategies. 

For those comfortable managing their own investments, Qtrade Direct Investing® provides a self-directed platform where you can trade independently and explore various investment options. 

Our Mainstreet and Aviso Wealth Advisors can help you explore these tools and determine how they fit into your financial plan.

Understanding Your Risk Tolerance in Financial Planning

Risk tolerance refers to how comfortable you are with the ups and downs of market fluctuations in your investments. Identifying your personal risk level is key to building a financial plan that fits your lifestyle and long-term goals. 

Several factors can influence your risk tolerance, including: 

  • Time Horizon: How long you plan to invest before needing access to your funds. 
  • Financial Situation: Your current income, assets, and financial responsibilities. 
  • Investment Experience: Your familiarity with financial markets and products. 
  • Emotional Comfort: How much market volatility you can handle without stress. 

A Mainstreet and Aviso Wealth Advisor can help you assess your personal risk tolerance and recommend investment options that match your preferences. Whether you prefer low-risk, stable returns or are open to higher-risk strategies for greater growth potential, your financial plan can be tailored to align with your comfort level and financial goals.

What Information Do You Need to Get Started?

To create a personalized financial plan that reflects your unique situation, it’s important to gather key financial details before meeting with a Mainstreet and Aviso Wealth Advisor. Having this information ready helps create a comprehensive strategy tailored to your financial goals. 

Here’s what to prepare: 

  • Income Sources: Include salary, bonuses, rental income, or other regular earnings. 
  • Expenses: List monthly living costs, recurring payments, and discretionary spending. 
  • Debts: Outline any loans, credit card balances, or other financial obligations. 
  • Assets: Document savings, investments, property, and other significant holdings. 
  • Financial Goals: Clarify both short- and long-term objectives, such as paying off debt, buying a home, saving for retirement, or funding education. 
  • Insurance and Pension Information: Include details about life insurance coverage, pension plans, and employer-sponsored benefits. 

By preparing this information in advance, your Mainstreet and Aviso Wealth Advisor can provide personalized insights and strategies, helping you stay on track with your financial aspirations.

How Often Should You Review Your Financial Plan?

A financial plan isn’t something you create once and forget. It’s a living document that should evolve as your life changes. Regular reviews help ensure your financial strategy stays aligned with your current circumstances, income, and long-term goals. 

When to Review Your Financial Plan: 

  • Annually: Check if your income, expenses, or savings goals have shifted. 
  • After Major Life Events: Life milestones like getting married, having a child, buying a home, or changing careers may require adjustments to your plan. 
  • When Your Financial Situation Changes: Salary increases, debt reduction, or receiving an inheritance could impact your saving and investing strategies. 

Why Regular Reviews Matter: 

  • Stay Aligned with Your Goals: Ensure your plan reflects your current financial priorities. 
  • Optimize Savings and Investments: Adjust contributions to retirement accounts or investment portfolios based on changing income. 
  • Adapt to Life Changes: Key milestones like paying off a mortgage or starting an RESP may open new financial opportunities. 

By reviewing your plan regularly with a Mainstreet and Aviso Wealth Advisor, you can stay proactive, prepared, and confident in your financial future.

Navigating Complex Financial Conversations

Discussing challenging financial topics with family can feel overwhelming, but open communication is essential for a well-rounded financial plan. Addressing these topics early can help ensure everyone is prepared and aligned with your long-term goals. 

Key conversations to consider include: 

  • Estate Planning: Clarifying how your assets will be distributed and ensuring your wishes are legally documented. 
  • Unexpected Life Events: Planning for situations like job loss, illness, or the loss of a loved one with proper insurance coverage and emergency savings. 
  • Financial Roles and Responsibilities: Defining who will manage finances in case of incapacity or shared financial decision-making within families. 

A Mainstreet and Aviso Wealth Advisor can guide you through these conversations with care and expertise, helping you create a plan that reflects your wishes while protecting your loved ones’ financial well-being.

Take the First Step Towards Your Financial Future

Creating a financial plan is the foundation for long-term success. With a personalized strategy in place, you can move forward with confidence knowing you’re prepared to achieve your financial goals—whether that means saving for retirement, buying a home, or securing your family’s future. 

Take control of your financial future today by scheduling a meeting with a Mainstreet and Aviso Wealth Advisor. Our experts will help you create a plan tailored to your unique needs and guide you through every step of your financial journey. 

Ready to get started? 

Call your nearest branch or Book an appointment online today.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. Online brokerage services are offered through Qtrade Direct Investing, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

Am I Retirement Ready?  Key Steps to Plan Your Future

Many people wonder, “Am I ready to retire?” While there’s no one-size-fits-all answer that automatically makes you “retirement ready”, assessing your financial health is a critical first step. Let’s explore how to plan for the retirement you envision.

How Much Should You Save for Retirement?

Everyone’s retirement lifestyle looks a little different—your vision for the future is the foundation of your retirement plan. To start planning with confidence, ask yourself: Do I want to travel often? Will I downsize or stay in my current home? How much will I spend on hobbies, dining out, or supporting loved ones? Understanding these goals helps you shape a financial strategy that fits the retirement lifestyle you imagine. 

The choices you make for your retirement years will directly influence how much you’ll need to save. Being retirement ready means aligning your financial strategy with your personal goals. Once you have a clear picture of what you want, you can turn those dreams into actionable savings targets. 

A common rule of thumb for retirement planning is to aim for 70-80% of your pre-retirement annual income. For example, if you earned $70,000 a year before retiring, you’d need around $49,000 to $56,000 annually to maintain a similar lifestyle. 

Start by estimating your yearly expenses, including housing, food, travel, healthcare, and leisure activities. Don’t forget to factor in inflation—at an average rate of around 2% per year in Canada, the cost of living tends to rise over time, meaning your savings need to keep pace.

Next, consider where your retirement income will come from. Government programs like the Canada Pension Plan (CPP) and Old Age Security (OAS) provide a base level of income, but they may not cover all your expenses. If you have a workplace pension, it can offer additional financial support. Your personal savings—such as RRSPs, TFSAs, and non-registered investments—will often need to fill the gap to ensure a comfortable retirement. 

A smart savings strategy is to start early and aim for 10 to 15 times your final working-year income saved by the time you retire. Need help setting your personalized savings target? Try the Mainstreet Credit Union Retirement Planner to map out a plan tailored to your retirement goals.

How Does a Registered Retirement Income Fund Work?

Once you retire, your Registered Retirement Savings Plan (RRSP) must convert into a Registered Retirement Income Fund (RRIF) by the end of the year you turn 71. Here is how it works. 

RRIFs require minimum annual withdrawals starting the year after they’re set up. The withdrawal percentage increases with age (5.28% at 71, 6.82% at 80). For instance, if you have $200,000 in an RRIF at age 71, you’ll need to withdraw at least $10,560 annually (5.28%). Because RRIF withdrawals are fully taxable, it’s important to carefully plan how much you take out each year to help reduce taxes during your retirement. Balancing your RRIF withdrawals with other income sources minimizes taxes and stretches your savings. Try out our RRIF Calculator to estimate your annual withdrawal. 

If you’re married consider a Spousal RRSP if your partner earns less. This enables income splitting in retirement, reducing your combined tax burden.

The Role of an Emergency Fund in Retirement

An emergency fund is a safety net, it is necessary even after you stop working and key component of your retirement plan. Unexpected expenses such as medical bills, home repairs, or family emergencies can arise, and you’ll want quick access to funds without dipping into long-term investments.  

How much should be in your emergency fund? Saving 3-6 months of essential living expenses is a great base for your emergency fund. Keeping the funds liquid and accessible in a high-interest savings account is great for any unexpected expenses that could arise. 

An emergency fund is important when unexpected expenses arise, without an emergency fund, you may need to withdraw extra funds from your RRIF or sell investments during market downturns, which can jeopardize your long-term financial security.

Are You Truly Retirement Ready?

Here are some key questions to ask yourself to assess if you are ready to retire. 

  1. Do I know my expenses? Have you accounted for all potential costs, including inflation and healthcare? 
  1. Do I have enough savings? Have you calculated how long your savings will last based on your desired lifestyle? 
  1. Have I balanced my income streams? Are you maximizing CPP, OAS, workplace pensions, RRSPs, TFSAs, and other personal savings? 
  1. Am I tax-efficient? Have you optimized RRIF withdrawals, TFSAs, and income splitting to minimize taxes? 
  1. Do I have a contingency plan? Is an emergency fund in place for unexpected costs that may arise? 

Retirement readiness isn’t just about reaching a savings goal—it’s about understanding your needs, leveraging income sources, and preparing for the unexpected.  

If you’re unsure if you are retirement ready book an appointment with one of our wealth advisors to create a tailored plan that ensures peace of mind in your retirement years.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

The Importance of Investing Early

Investing when you are young can be hard to get excited about. Experiencing the super-fast speeds of the latest tech gadget or buying the wish list items in your cart could arguably provide more satisfaction than putting money away for retirement – a possible 30-plus years down the road. 

The fact is, the earlier you start investing, the more time your money has to grow. When time is on your side, it’s a huge ally. You benefit from the power of compounding interest, which is when the returns on your investments begin to pay off. Investment accounts such as Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSPs) allow for unhindered growth because investment earnings are not taxed as long as the funds remain in the account. 

Let’s dig into some of the benefits to consider when you start investing early.

How Compounding Interest Boosts your Investments

Investing early and compounding interest work hand-in-hand. Compounding returns on your investment work like building a snowman – the longer you compound your interest or reinvested dividend payments (or roll your snowball through the snow), the larger your initial investment (or snowball) will get.  

Let’s look at an example. Imagine you invest $1,000 and it earns 5% interest annually. After the first year, you will earn $50 of interest on your $1,000 investment, bringing your total to $1,050. Now, in the second year, your new balance of $1,050 will continue to earn 5% interest and at the end of the second year, you will earn $52.50 in interest, bringing your balance to $1,102.50. This process continues and after 10 years, your $1000 investment has become $1,628.89! As you can see, the longer your investment is compounded, or the earlier you start investing, the greater your snowball/wealth will grow. 

You don’t have to wait until you have a lump sum to invest. The power of compounding is amplified when you periodically and consistently add to your funds to grow your investments. Let’s assume you continued to add $100 a month or $1,200 a year to your initial $1,000 investment above and it earns the same 5% interest annually, after 10 years you would now have $16,722! The graph below demonstrates the year-over-year balance, how much interest you cold be earning due to compound interest. Use our TFSA calculator to understand how much your TFSA could compound.

For Illustrative purposes only.

Now, this is just a simple example of how you can make your money work for you through compounding interest. How and where you place your funds for investment factor into that. To help make that decision, you must consider your risk tolerance. Let’s discuss that next. 

Find your Perfect Investment Balance: Understanding Risk Tolerance

Risk tolerance is how comfortable you are with the ups and downs of your investments. If you have a high-risk tolerance, you’re okay with changes in your investment value because you’re focused on the longer term and the higher potential returns of the investment. As an early investor, you tend to have time on your side – especially if you are building your wealth to save for retirement, this may allow you to invest in more growth-focused investments that have fluctuations in value but grow at a higher rate than low-risk investments in the long term.  

If you have a low-risk tolerance, you will prefer safer investments that do not fluctuate in value and provide modest returns. This is especially helpful if you need the funds in the short term, for an upcoming purchase that you’ve been saving for. As you near retirement, you will also transition your investments to a lower-risk profile to ensure you have those funds available as you retire.  

If you’re unsure of your risk tolerance, our Aviso Wealth and Mainstreet advisors can work with you to find investment options to match your risk level and still allow you to capitalize on compounding, having your money work for you.

Time in the Market vs Timing the Market

As an early investor, it’s tempting to look for instant results., However, staying invested for the long term often outperforms trying to time the market. It can be tough to predict short-term market changes, even for the experts, and trying to do so can lead to costly mistakes. When you stay invested for the long term, your money has the opportunity to grow through compound interest. Historically, markets tend to rise over time, meaning consistent investments are more likely to see bigger returns than jumping in and out based on short-term trends.

The Value of Experience

It can seem overwhelming when you want to start your investing journey, but having a wealth advisor who understands your goals can significantly impact your investment journey when building wealth. An experienced advisor has the skills and knowledge to ensure your investments are placed within the right investment vehicles at the correct risk tolerance, working with you as a trusted partner to help you meet your financial goals. 

In times of uncertainty, it can be tempting to sell your investment and hide it under your pillow, especially if you’re not confident in your plan. Similarly, as you mature and encounter new milestones in your life, your needs and goals might change and opportunities might arise. An advisor can put things into perspective talk through scenarios and help you make the most of your investments to keep you on track.

Better Financial Habits

Creating new savings habits may take time, but investing early can make it easier to develop this habit. Paying yourself first by designating a portion of your income into your savings or investment account keeps the money “out of sight and out of mind” and can be made easier with automatic contributions, allowing your savings and investments to grow automatically. This habit lets you steadily work towards your financial goals and build wealth over time. 

Good financial habits allow you to find balance while achieving your goals. Starting young, taking advantage of time in the market, and leveraging compounding interest for building a strong financial future will pay off in the long term.  

Ready to start building your financial future? Whether you have questions or need guidance, our Mainstreet Wealth Advisors are here to help. Book an appointment online or in person today and take the first step toward growing your wealth with confidence!

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc. The information contained in this article was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete. This material is for informational and educational purposes and it is not intended to provide specific advice including, without limitation, investment, financial, tax, or similar matters.

The Importance of a Business Advisory Team

Starting a business is a big milestone and while it is rewarding, it can come with significant challenges. From personal commitment and emotional toll to time investment and financial pressures, it can be hard to navigate balancing the roles that are required to successfully start a business. That’s why delegating tasks and surrounding yourself with a trusted business advisory team is an important first step as a new entrepreneur. This allows you to focus on the foundational workload of developing your offering, marketing, improving the customer experience, and managing administrative tasks, while benefitting from the expertise and experience of the subject matter experts to provide valuable insights in their respective fields.

Having a business advisory team when starting a small business can be crucial to its success. Business advisors can provide expertise, guidance, and support that can help you navigate the challenges and risks of a new venture, seize opportunities that you may not recognize, and ultimately achieve both short- and long-term goals. Let’s jump into some key professionals you should want on your business advice team and how they can help. 

Business Advisory Team:

  • Lawyer
  • Accountant
  • Financial Account Manager

Lawyer

As a business advisor, a lawyer helps you with all the legalities surrounding your business. Not only does a lawyer protect you from any potential risks, but they can also help you lay a strong legal foundation to support sustainable growth. 

More specifically, a lawyer can help you with the legal structure around starting your business based on your goals, liability concerns, and tax implications. A good lawyer can offer support with paperwork, registrations, and compliance, ensuring your business starts on a solid legal foundation. After conception, lawyers can draft, review, and negotiate contracts with suppliers, clients, employees, and partners to reduce the risk of disputes. Should disputes arise, they can help with professional and efficient conflict resolution through negotiation, mediation, or litigation. 

It’s also important to protect the core of your business – your offerings. Lawyers can help you safeguard any of your intellectual property like trademarks, patents, and copyrights. By securing the rights to your intellectual property, your business ensures the protection of both the brand and products or services which is critical for competitive advantage. 

Businesses must adhere to various federal, provincial, local, and industry-specific regulations. Lawyers can ensure that you follow these laws, rules, policies, and obligations to help avoid fines and penalties. 

Having a lawyer as part of your advisory team can help you be proactive, rather than reactive, with legal matters. This strategic advice and support can help you confidently manage and grow your business. 

Accountant

Accountants help your small business by managing the financial aspects of your business. While both accountants and financial account managers provide critical financial guidance, their roles on your advisory team differ. An accountant’s core responsibilities are managing and reporting on the past and present financial status of a business – this includes things like bookkeeping, payroll management, tax support & preparation and financial statement creation. Their guidance is primarily focused on the operational and compliance side of the business with shorter-term outlooks. Think of an accountant as a financial compass -without one it is easy to lose track of your financial health. 

Without the support of an accountant on your business advisory team, it can create challenges around making data-driven decisions based on the profitability of your business and where to invest, cut back, or optimize for higher returns. This sort of financial analysis is critical for many types of business ventures including securing lending for growth opportunities, business valuation with hopes to sell, merge, or attract investors, and succession planning – as each of these steps will require clear financial statements, profitability analyses, and risk assessments before proceeding. 

Together, accountants help keep finances organized, compliant, and optimized in the present, while financial account managers focus on growing wealth, managing risk, lending opportunities, and achieving future financial goals. Both are essential, but their contributions are complementary, with accountants managing financial health day-to-day and financial account managers helping shape a business’s financial future. 

Financial Account Manager

When you begin a small business, a financial account manager is another crucial piece to your advisory team as they are your partner in growth and stability. A knowledgeable account manager is someone who understands your business, the industry in which you operate and can act quickly to recognize and seize an opportunity to accelerate growth. Their efforts are future-focused, with an emphasis on lending, wealth management, strategic financial goals, and risk management. 

While being future-focused, financial account managers also offer essential needs for day-to-day banking. Whether it be services like chequing and savings accounts, payment processors, payroll services, cash management tools and credit cards. Account managers want to make your daily operations as smooth as possible so you can focus on running your business. 

When it comes to lending, your financial account manager can assist with securing financing whether you need a loan or line of credit, to give you the capital to launch, sustain, or expand your business. Another important part of an account manager’s job as a lender is to assist in the commercial mortgage process – when you’re ready for the step of taking your business out of the home or are looking to expand to a larger space, they can help you make it happen! 

Sit down with one of our Commercial, Agriculture or Business Account Managers here at Mainstreet Credit Union to understand how they can play a key role on your business advisory team. We’re here to help you with setting up your operations, providing tailored advice, and lending support. Book an appointment today with our commercial, agricultural & small business team to get started. 

In summary, a lawyer, accountant, and financial account manager are essential to have by your side when running a business advisory team. They offer you all the resources and business advice needed so you can focus on running your business. Together, these business advisors work to ensure your business not only survives but flourishes in a competitive landscape.  

You Have a Business Plan, Now What?

You’ve spent countless hours drafting, researching, and refining your business plan. Congratulations, you’re one step closer to your entrepreneurial dream! Now, how do you start a business, what do you do with your business plan? Having a business plan is just the beginning. Now, it’s time to put it into action.  

A business plan is like a blueprint; it’s only effective if it is followed, executed, and adjusted as you move forward. So, after creating your business plan, what is the next step? 

Here are the steps next to turn your business plan from paper into profit. 

  1. Test The Business 
  2. Conduct Surveys & Focus Groups 
  3. Secure Funding 
  4. Develop & Execute Your Marketing Plan 
  5. Track Progress and Adjust 

Test the Business

Even the best-crafted business plans can hit bumps when they are put into action. A great idea can sometimes have challenges translating in the market. So once your business plan is complete, it is important to test your plan in the real world with real customers. This step allows you to fine-tune your approach early before committing more time and resources. 
 

Offering limited runs or trials to early adopters helps you refine your product and business approach and is an important step when you start your business. It is important to evaluate the pilot tests and understand what worked, what didn’t work, and what can be changed to work better. Early testers and adopters are also crucial for creating buzz and word-of-mouth marketing, so it is important to leave a good first impression during this period. 

Conduct Surveys and Focus Groups

Getting feedback on your idea directly from your target audience is vital. Surveys, interviews, or focus groups can reveal opportunities or pain points you might have missed in your initial feedback. Determining what you want to get feedback on is a great first step in creating a survey or focus group. You can ask a series of targeted questions to get the answers you need to create actionable insights on specific areas. Gathering and incorporating your feedback can also help you realize what you are doing well, what needs adjusting, and what the market needs. Collecting feedback will give you confidence as you move forward knowing that your small business resonates with people.

Secure Funding

If your business requires capital, securing the right funding is essential. There are a number of ways to gain additional funds, and knowing which one is right for you can sometimes feel a little overwhelming. At Mainstreet, our Commercial and Agricultural Account Manager‘s are available to help you with a range of lending options tailored to your specific needs. They will be able to work with you to review your financial situation and recommend the best funding solutions  to meet your goals. Book an appointment today to learn more about the options available to you. . 

In addition, there are also a range of grants or community resources that may be available to you. We encourage you to connect with your local Small Business Enterprise Centre and Community Futures location, or visit the province of Ontario website. Grants can be a great resource that you could utilize to kickstart your business!  

Remember, maintaining ongoing financial health is key to sustaining your business long-term and beyond the initial funding.

Develop Your Brand and Execute Your Marketing Plan

A brand is more than just a logo, it is the story behind your business and how you connect with customers. Having a plan on how to share that story and separate yourself from the competition is crucial. To create an effective marketing plan, it is important to understand where your customers are and the best way to reach them. Developing a website and digital footprint is usually a great low cost first step to help make your business easily found and have conversations with customers. Mapping out a plan that is based on research and aligned to your brand can go a long way in establishing your business, especially if you are just starting out.

Track Progress and Adjust

Being a successful business owner means staying flexible and adapting quickly when necessary. Even with a solid business plan, it’s essential to monitor your progress and be ready to pivot when needed. Market conditions and customer preferences can shift, and if your business isn’t performing as expected, it doesn’t mean your idea isn’t viable—it might just need some fine-tuning or better timing. Whether you’re seeking financing or just want a strategic check-in, our team is here to support you. 

Starting and growing a business demands ongoing learning, flexibility, and persistence. Each step you take after creating your business plan moves you closer to achieving your small business goals. Don’t hesitate to seek advice, reassess your strategy, and celebrate each milestone along the way. 

At Mainstreet, we’re committed to being your partner on this journey. Book an appointment today with one of our Commercial and Agricultural Account Managers to explore how we can help you meet your goals and grow your business with confidence. We’re here to provide the support and solutions you need—let’s take the next step together.