Mainstreet Blog

By: Jodi Ritzer | Member Experience Supervisor | Chatham

Get the most out of our online banking service with the following top 10 tips and tricks:

1. To be able to see the password you have entered, you can click on the ‘eyeball’ icon on the right side of the Personal Access Code field.

2. To set up a new debit card on your mobile banking app, open the app, click “log in” followed by “log into a different account” in the bottom left and fill in the account details. Be sure to check the remember me box for quicker access to this new log in. You can also delete any existing logins by selecting “manage login profiles” and clicking the trash can beside the account you wish to delete.

3. Did you know that you can deposit a cheque to your account by using our mobile banking app? Simply login to the app, touch Deposit on the home screen and follow the prompts. Note: Your cheque may be held for up to 5 business days after depositing. PRO TIP: write ‘deposited by phone’ and write the date on the back of the cheque so you don’t accidentally try to deposit it again.

4. If you have to pay business taxes (i.e.: current source deductions, corporate income tax, etc.), expand the ‘Payments’ menu and select Pay Business Taxes. You can remit and pay all in one spot!

5. Protect your account! Set-up Alerts so you can monitor your account access! In online banking desktop, click on Messages and Alerts, and select Manage Alerts, and on the Mobile Banking App, swipe left on the home screen and touch Alerts and then touch Manage. You can set alerts so you are notified immediately if someone tries to login to your account, sets up a new e-transfer recipient, sets up a new payee to your bill payments, and more!

6. You can add a new payee to your bill payments listing. Under the Payments heading, select Add/Delete Payees, then select Add Payee. You can search the company by name, or enter the type of business for a list of suggestions.

7. If you need to view account transactions older than 6 months, you can do this by clicking on My Accounts, then selecting View e-Statements. Select the year and month of the statement you wish to view. The information is available for 7 years!

8. Tax Receipts. Are you tired of waiting for your tax receipts to come in the mail? They are available online! Click on My Accounts, then select View e-Documents and select the receipt you want to view and/or print.

9. You can re-name your accounts! Are you saving for a car, a wedding or something else. You can label your accounts so you know which one is which! Click on My Accounts, then Rename Account, select the account you want to Rename, and label it!

10. Downloading your transactions to a bookkeeping program is easy! Go to My Accounts, View Account Activity, select the account you wish to download, then go to Export to… on the right side of your screen and select from the drop-down list of programs.

11. BONUS!!! You can get your account information for direct deposit or pre-authorized debit online! Click on the account for which you wish to get the information, it will then show on the top right side of your screen under the heading Account Details and will include your transit number, institution number and account number!

If you are looking for more helpful tips and tricks, visit a branch or speak with the team at Mainstreet Credit Union. We are here to help!

Written by: Lynda Edington | Financial Advisor | Sarnia (London Rd.) branch

You try to set aside money every paycheck for your savings but by the time you pay your bills, buy groceries, gas and go out for dinner a few times it feels like there is nothing left to save. Maybe it’s time to try a different approach.

First, know where your money goes.

Track your spending- whether it is using a spreadsheet, writing it down, or reviewing a few months of bank statements. This activity will help you understand where your money is going and may open your eyes to the real expenses of your day-to-day.

After reviewing your budget, the next step would be to set your financial goals…

Determine what you would like your money to provide for you. This could be the goal of early retirement, a family trip, building your emergency savings, the purchase of a new boat, or car, or other important life goals. Having a budget and measurable goals will help you know where you are going to allocate your paycheck.

Once these two steps are complete, we move into implementing your plan through a strategy we like to call “paying yourself first”.

Essentially, paying yourself first is a reverse budget. Which means you are treating your own savings like it’s a bi-weekly or monthly bill. Instead of saving what you have left, you are saving a specific amount first so that your financial goal can be reached in a set time frame.

For example, if you bring home $4,000.00 monthly, automatically save 15% ($600) towards savings. This will leave you $3,400.00 to pay your bills and make your goals a reality. The strategy of savings makes saving easy because you are no longer spending any time figuring out if you have any money left to save. Instead, you can be confident you are getting closer to your goal – as long as you stick to your budget.

We realize that paying yourself first or setting up a reverse budget may be tough, so we are here to help! The expertise of a Mainstreet Advisor can help get you on track and closer to where you need to be. We can meet with you to review your different goals, how to make them work best for you, and how investing may make them achievable sooner than you think. We can also help you set-up automatic withdrawals from your account every pay going to your savings so your pay yourself first savings happens automatically.

To get started reach out to a Financial Advisor at Mainstreet Credit Union today by calling us or book a meeting online.

Written by: Joan Battram & Linda Kew | Member Service Representatives | Parkhill Branch

When a child is born so many responsibilities come with raising this child. One thing that can easily be taken care of is their education. Opening an RESP (Registered Education Savings Plan) could be one of the smartest decisions that you will make, however, there are a few details that you’ll want to understand prior to doing so.

An Education Savings Plan or Registered Educations Savings Plan (RESP) can help parents, family and friends save towards a child’s future post-secondary education.  At Mainstreet Credit Union we can assist you in not only understanding what an RESP is, but more importantly, how to personalize it to suit your needs.

Here are a few important tips that you’ll want to consider before opening an RESP:

Invest Early

The earlier you start, the less you would need to contribute each month. Invest early and watch the RESP grow with interest over time along with your kids.

Save What You Can Afford

The amount you save will be unique to you. Remember every little bit is a step in the right direction!

Be consistent

Set-up a monthly automatic contribution, even if it is a small amount, this way the savings happens without thought given how busy we all are.

Make it Flexible

You have options for education savings. Perhaps you want to look at a TFSA (Tax Free Savings Account) which can be withdrawn tax free for any purpose and does not have to go towards education. Or perhaps an RESP family plan vs an individual plan to offer flexibility.

Gain More Than Just What You Put In

The government will add 20% annually to the first $2500 contributed, a $500 bonus every year!

Know Your Facts

The lifetime contribution limit for each beneficiary of a RESP plan is $50,000

Taking the first step of opening an RESP, or other savings plan for your child’s education, can help your child have more choices in life and set them up to achieve financial independence. It is never too late to start. Encourage children to save their earnings of cash gifts from family to add to the plan and start showing them how to get their money working to maximize opportunities for their future.

Note: Parents aren’t the only ones who can open an RESP for a child. If you have a grandchild, niece, or nephew, you can open an RESP for them. In fact, anyone can get an RESP for a child. You could even open an RESP for one of your friends’ children if you’re feeling generous!

Reach out to Mainstreet today to get started! Book a meeting with a Mainstreet advisor today.

Written by: Adele Mineau | Commercial and Agricultural Account Manager | Ailsa Craig & Parkhill branches

Side hustles have become a popular way of supplementing income from a full or part time job, and they’re only getting more common during the Covid-19 pandemic.

A good side hustle should be scalable, flexible, and well paying. Income can be used to pay-off debt, or put away more into savings, while doing something you love.

Some popular side hustle ideas are: tutoring or teaching a skill, renting out a property through Airbnb, selling arts or crafts, and podcasting or blogging.

When beginning your new business it’s best to think of it as its’ own entity:

Open a separate bank account that makes tracking the income and expenses easy for tax time.

Be sure to have a schedule. Are you going to devote an hour a day to your business, every Saturday, or is it seasonal?

Have a business plan with short-term and long-term goals with a timeline. How many students do you want to teach a day, how many crafts need to be for sale each month, how many days per week are you renting out the cottage?

Don’t spend money the buyer won’t see, only spend money where it improves the quality of your product or efficiency. Think about if you need supplies before you order them or can sell the extra items a new system would allow you to produce.

Keep administration and infrastructure simple. Can you get by with a spreadsheet and an invoice template?

Let Mainstreet know what kind of side hustle you are starting. We are interested in your ideas and can provide advice on how to begin, how to manage day to day, and how to grow.

Book a meeting with an advisor today to get started.

Written by: Andrea Zapf | Financial Advisor | Ailsa Craig Branch

Whether you are just finishing high school, deciding to finally go back to school after an extended break, or maybe you are looking for a much-needed career change, Mainstreet has you covered. We offer a wide range of student services to help- from daily banking, student line of credit, and low-fee credit cards.

Did you know that if you are under the age of 26, you qualify for a choice between two different entirely free Mainstreet personal chequing accounts. Whether you primarily bank online or prefer to come see us in-person, we have accounts that would work best for whatever type of banking you prefer. 

A student line of credit is a great way to be able to pay for tuition, books, or just regular living expenses. Mainstreet can loan up to $10,000 per year, up to a maximum of $40,000.  With this line of credit, you only need to pay the interest while you are enrolled in school.

Once you are finished your schooling, you get 12 months of interest only payments to allow for you to get out into the workforce and establish yourself. After a year, your line of credit is converted to a loan. You can take up to 10 years to pay it off, or pay it off early with no penalty.

Mainstreet also offers low interest, no annual fee, credit cards. It’s very important to understand credit, especially when you are first venturing out on your own. By establishing good credit, you can set yourself up for your future. Having good credit will help if you are ever looking to buy a car or purchase a home. An easy way to establish credit is to use a credit card to make everyday purchases, groceries, gas, etc. and then pay it off every month when it’s due, or before the monthly deadline. By having a low-interest credit card, should you be unable to pay off the card in full each month, you won’t be paying so much in interest charges.

Mainstreet is a huge believer in supporting communities and investing in higher education. Right now, Mainstreet is offering an opportunity to win a $3000 scholarship
(applications for 2021 are due by July 31, 2021), as well as additional giveaways. 

As you can see, Mainstreet has a lot to offer students! Going to school can be daunting, so let us help you make it easier. Visit our Student Resources page to learn more. If you are wanting to speak with an advisor about student banking, book a meeting today!

Tricia Bouterse | Financial Advisor | Sarnia

Most homeowners come to a point in their life when they may want to downsize their home maybe because of their stage of life or becoming empty-nesters, wanting to retire in a new place, wanting less up-keep and space to maintain, wanting more financial freedom, and more.

It’s often a long and stressful process to prepare to downsize as you aren’t just downsizing your home, but all the items in it so they’ll fit in a smaller space. It might leave you wondering “how did we accumulate this much stuff in the first place?” Don’t fear, there is a light at the end of the tunnel and Mainstreet is here to help make your downsizing experience a positive one.

Create the life you want

The first step we recommend is stopping before your start. Stop, close your eyes, and imagine where you want to go in life and what your priorities are. Do you want more leisure time? Do you want to travel across the country in an RV? Do you want to spend time in your yard and tend to gardens or maybe some animals? Are you ready to make a subtle or drastic change? Take control of your downsizing journey and decide how you want your life to become. It is much easier to move from vision to reality when you know what you want to do and what will make you happy in your next chapter.

Let time be on your side

Be sure to give yourself enough time to plan and execute your downsizing project. This is not a weekend project. Taking time will alleviate stress and empower you in your choices.

As you start to simplify your life, pay attention to what you use on a regular basis and what you don’t. Do you really need to keep that mixer you never use? Are you going to use that treadmill for something other than hanging laundry? If you put items to the front of the closet or cupboards as you use them, the items you don’t use will fall to the back and be easier to identify when you downsize.

Also consider only keeping items that bring you joy. Make it a goal that in your new space you will have less, and what you do have will serve a necessary function (like a fridge to keep your food cold, or a washing machine to clean your clothes) and the rest, whether it is furniture, clothes, or accessories, will be items that spark joy and happiness for you and your family.

Plan your space. Will everything fit in your new home?

Plan out what you will need and if it will fit. If it doesn’t, there are lots of options such as: donating, selling or leaving items as an early legacy gift to your family and friends (bonus–you can enjoy watching them appreciate it!).

Whatever your reason for downsizing and your lifestyle change, have patience and persistence and you will create the new life you want. You are not alone, we are here to help you with your next chapter with financial tools, advice and guidance. Book a meeting with an experienced Mainstreet Financial Advisor today.

Liz Oliver | Financial Advisor | Mount Brydges

Whether you are buying your first home, refinancing or renewing an existing mortgage, sometimes deciding whether to go with a fixed or variable rate mortgage can be confusing. I’d like to share some information that may be helpful when deciding if a fixed rate mortgage is right for you.

First off, what does a fixed rate mortgage even mean?

A fixed rate mortgage is a home loan product that has the same/consistent interest rate for entire length/term of the mortgage. Even if the markets and rates fluctuate your rate will remain the same as the day the mortgage began.

Locking into a fixed rate mortgage offers you the homeowner/borrower stability against any sudden or potential interest rate increases within that locked in term. You can budget accordingly and know that your weekly, bi-weekly or monthly mortgage payment that you set-up at the start will remain the same unless you decide to increase your payment amount.

The most popular fixed rate mortgage tends to be a 5 year fixed term where you lock in to that rate for 5 years, however Mainstreet and most financial providers and banks, offer terms from 6months to 5-10 years in length/duration. Rates offered are different depending on the length of term you pick.

On the flip side, there are a few things to keep in mind about a fixed-rate mortgage.

-They generally have a slightly higher interest rate, making the qualifying criteria a little more difficult.

-In case of an interest rate decrease in the markets, you the borrower will not be able to take advantage of that new lower rate as the mortgage would be locked-in for a certain length of time depending upon the term chosen. Breaking that contract will incur penalties, an unwanted extra cost to the borrower.

Regardless of your preference, it is important to understand and know all the details and fine print of your mortgage. Our goal is to offer our members knowledge and support in their home financing needs.  Book a meeting with a Mainstreet advisor today to learn more.

James Lounsbury | Branch Manager | Goderich

Are you having difficulty keeping up with multiple monthly credit card or loan payments?

Do you have multiple credit card bills or loans to keep track of and pay on different dates?

Does it feel like you’ll never be able to pay off what you owe?

Credit card debt can be expensive to pay down as most cards have high interest rates (10%-20%+) on any balance owing. If you only make the minimum monthly payment on a regular basis you will be paying a large amount of money in borrowing/interest costs and could take a long time to pay off the amount owed. If you have a smaller balance your minimum payment might be as low as $10.00 per month however if your balance is higher your payment is most likely a percentage of the outstanding balance which is generally 3%. Most credit card statements will detail out the number of years it will take you to pay the amount off using just the minimum payment and depending on the amount owed that could be over 20 years and thousands of dollars you’ll pay just in interest on top of what you owe.

Something that can help better manage the debt is a consolidation loan. Simply put, if you combine all your credit card debts into one low-rate loan, you can save a lot of interest and only have to worry about one loan payment vs. paying multiple credit card bills each month.

To demonstrate why a consolidation loan may be the ‘right’ choice for you here are two scenarios to think about:

As you can see in the example above with the consolidation option, you save money overall in interest costs + would be paying $50.00 less each month! Mainstreet also offers additional insurance options you can add to loans that provide peace of mind by covering the debt of the loan if you suffer a death, critical illness, or a disability.

Here are a couple of very helpful calculators that can be used to demonstrate how you can benefit:

Mainstreet Credit Union – Loan Calculator (mainstreetcu.ca)
Credit Card Payment Calculator – Canada.ca (fcac-acfc.gc.ca)

Of course our staff can always help by working with you to review your borrowing – whether loans, credit cards, mortgage or more, to ensure you have the best financial plan and lowest rates possible to save you money. Book a meeting with a Mainstreet Financial Advisor to get started today.

Written by: Marina Kraft | Financial Advisor | Strathroy Branch

If you have been searching and searching and haven’t yet found your dream home, building one from the ground up might be the right solution for you.

A few things to consider if you are thinking of undertaking a home build:

• You’ll need to secure a special construction/builder’s mortgage. Note: There can be additional financing costs for this mortgage type.
• Do you currently own land, or will you have to purchase a property? Vacant land may require separate financing, or if you currently own a home, you may be able to secure a Home Equity Line of Credit (HELOC) to purchase the lot.
• Be sure to do your research. Ensure you will be able to obtain permission to build from the municipality and/or conservation authority. Also research zoning, environmental, the availability of utilities, high-speed internet, etc. Should something need to be addressed, the cost of these items can be significant and will need to be addressed in the build budget.
• Ensure you have a home builder/ general contractor you trust. This will ease much of the work around the build and managing the sub-trades. As well by Ontario law, a build contractor is required to provide a warranty (typically through Tarion). Be sure to carefully review what is covered under the policy. There is also the option if you have the background, expertise, and disposable time to manage the build yourself (“self-build”). Note that some financial institutions may charge higher fees for a “self-build”, as it poses more risk, and requires you to obtain an “all risk builder’s” insurance rider on your home insurance policy.

How does a construction mortgage work?

Funding for the build project will be advanced by the financial institution in stages, based on the completion of the build. There are generally two methods used to calculate how much is given in each stage:

• Progress Draw Mortgage: A home inspector will be sent to the property to review the progress of the build to ensure it is going to plan. The inspector completes a report for the financial lender, and if all the components of the stage are completed, they will advance funds. Should the inspector indicate the project is not progressing on plan, the financial lender may hold back some of the scheduled funds until the construction is back on track. Each time the inspector visits the project, a fee is charged (typically to the borrower). Typical stages are: Foundation (excavation, foundation, backfill & framing); Shell (windows, doors, exterior finishes, and roof); Drywall (includes plumbing, electrical, HVAC, duct system and insulation); Finishing (drywall, painting, finished flooring, electrical fixtures, finished plumbing and carpentry).
• Percent Completed Draw Mortgage: This method is a little more fluid. The inspector completes a report for the lender and indicates the percent of the project completed and that percentage will reflect how much of the total mortgage is funded to the borrower.

For both types, as part of the Construction Liens Act there is a required 10% holdback amount that is kept aside from each draw and accumulates to the end of the project. Once the build has been completed and you’ve received the official occupancy certificate from the local building inspector, there is a 60-day waiting period before the lender releases the accumulated holdbacks.

Separate to this, it is recommended that you have 10% or more of your home’s build cost set aside for unexpected and extra costs that can arise throughout the project.

Building a new home and acquiring a builder’s mortgage may not be for everyone; however, a well thought out and thorough financial and build plan will help to ensure a smoother path to creating your dream home.

Mainstreet and our advisors are here to help you build your dream home and apply for a builder’s mortgage/financing. Book a meeting online or call your nearest branch location.

Written by: Aimee June | Assistant Branch Manager | Chatham Branch

Unless you have been hibernating all winter long, you’ve likely seen how hectic the real estate market has been already! The additional stress this is putting on home buyers has increased substantially but it is a particularly difficult situation for first time home buyers.

Competitive multiple offers (often with no conditions attached), restricted showings, rising prices, lack of inventory and COVID-19 restrictions have all made buying a home even more challenging. So, what is one thing you can do to make things easier and a little less stressful?

Get a pre-approval from your financial institution before you start house hunting.

Having a pre-approval in place does several things for a home buyer, especially a first-time home buyer:

1. It shows that you are a serious buyer

In this extremely competitive environment, having a pre-approval shows realtors and sellers that you are a serious buyer. Sellers are often reviewing multiple offers. While you may require an appraisal, or approval from Canada Mortgage and Housing Corporation (if you do not have 20% down), if you can show that you have a pre-approval in place for the mortgage from your Financial Institution the seller will likely be more apt to accept an offer they know is likely to stand. In today’s market, realtors prefer buyers to come to the market knowing they are pre-approved.

2. Eliminates possible disappointment

Getting pre-approved can eliminate possible disappointment. You don’t want to start house hunting, fall in love with a home, make an offer, only to find out you have been declined for the mortgage. Getting pre-approved will also correct any potential credit problems that may be hiding. First time home buyers often are not in-tune with their credit scores. They perhaps have not yet built a credit score or have a surprise late payment or collection item on their credit report they were not aware of. Starting the pre-approval process ahead of time will give you a chance to correct this before the house hunting gets serious.

3. See the true costs of buying a home

A pre-approval will help you to understand all the true costs of buying a home and home ownership before you make the commitment. It is great if you have a down-payment saved, but what about closing costs? Utility set-ups? Moving costs? Repairs that may need to be done? A financial advisor will be able to help you work through all these numbers and ensure that you have enough set aside for additional, sometimes unexpected, costs.

4. Plan your home payment

This is a great opportunity to discuss your budget and decide what type of mortgage payment is affordable for you when you consider additional monthly bills like property taxes, utility bills, and maintenance, with your financial advisor.

5. A pre-approval will guide you to your optimal purchase price.

The last thing you want is to be house poor. Buying a home, especially if you are a first-time home buyer can be complicated, especially in today’s market. Buying a home should be an exciting and joyous time in your life. Sitting down with a qualified financial advisor to review your personal situation and becoming pre-approved will help take some of the stress out of your buying journey.

If you are thinking of buying a home, connect with a Mainstreet Financial Advisor to start the conversation, you will be glad you did. Book a meeting today.

Written by: Doreen Welsh | Commercial and Agricultural Account Manager | Goderich Branch

COVID-19, and the onset of the pandemic, brought fear and panic to many.

Job layoffs, business interruptions, and closures, along with the hesitancy to leave your house for fear of contracting the virus, forced us into unknown territory and left many wondering how to cope in this changing world, and how to continue to meet financial obligations.

At Mainstreet, we are very committed to assisting our members through difficult times, and we continue to work with each member to manage the effects of this pandemic.

Life happens, and we understand there may be times when it is necessary to take a break from a regular financial obligation, such as your mortgage.

Before making the difficult decision to skip your mortgage payment, we recommend that you take a few minutes to discuss with your Mainstreet advisor, the various options that best meet your needs, now, and for the future.

Together with your advisor, you can weigh in on the short, and long term effects of skipping payments, things like:

• how much more interest will I need to pay
• what happens to the missed principal portion -when payments resume, depending on the amount, rate, and amortization of the mortgage, it can take 4-5 months to catch up just the interest portion of the payment
• if I need to add missed principle to the mortgage at maturity, how much time does this add to my mortgage
• how can I catch up to reduce costs over the long term

If you need help to determine what is right for you, we encourage you to reach out to your Mainstreet advisor to help you make an informed decision.  Book a meeting with an advisor today.

Written by: Shawn Gethke | Investment Advisor | Credential Asset Management Inc. | Goderich

Investing in the markets isn’t always the right fit for everyone when it comes to deciding how you will save and grow your money over your lifetime.

It’s important to do investment and financial planning with a trusted and qualified advisor. During your planning they will focus on ensuring you have the right product mix and diversification based on your financial goals, risk tolerance, and the amount of time you have to be invested. In the end you should have an investment plan and strategy unique to you.

When deciding whether to invest in the markets, it’s important to consider that the markets can fluctuate up and down. Your advisor will work with you to identify if there is enough time to leave the funds invested in the markets before you need to begin drawing on those savings. With time on your side, if the market takes a hit and investment values dip down, you won’t need to draw on those investments and can leave them there until the markets have recovered to the original amount you invested at or higher.

It is important to remember that a decline in market value is a temporary state, you haven’t “lost money” unless you sell your investments at a lower price than what you bought them for. If our market history has taught us anything, it’s that over time markets have always recovered.

For those with less time to save before needing the funds, or wanting savings with less potential associated risk, term deposits (including index-linked term deposits), and high-interest savings accounts are often a better fit as they guarantee a set interest rate and you won’t lose the amount you invested. These types of investments, although a lower risk, tend to offer lower growth potential because of lower interest rates, when compared to market-based investments.

For investments that are intended for the long-term, market-based funds provide a greater opportunity for growth. With time on your side, you can withstand market fluctuations. Taking more risk in the early stages of life and your investment journey, then slowly lowering risk as you approach the date of your retirement, or when you will want to begin drawing on your savings, is a wonderful strategy for investing. Also consider a drip approach for your contributions, which is the act of making regular and frequent, even if small amounts, of contributions to your investments. This ensures you are investing throughout market fluctuations, which will help to average out the risk and price you are buying into the markets.

Investment market fluctuations are inevitable and a normal part of the market cycle. The value of having an advisor you trust, whether at Mainstreet or another provider, is they can help you make strategic decisions for your investment plan, encourage you to stay the course during market dips and not sell low, help you navigate the market overall, and update your investment and financial plan as your goals, age, and risk tolerance changes.

You’re not alone in your investing endeavours, we’re here to help.  Book a meeting with an advisor today.

Shawn Gethke | Investment Advisor | Credential Asset Management Inc. | Goderich
Book a meeting with Shawn Gethke today.

Mutual funds are offered through Qtrade Asset Management (a tradename of Credential Asset Management Inc). Mutual funds and other securities are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc.

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.

Written by: Marc Pranger | Investment Advisor | Credential Asset Management Inc. | Sarnia Region – Exmouth St.

Investing when you are young is hard to get excited about. Experiencing the ‘lightning-fast loading with ultra-high-speed SSD, adaptive triggers and 3D audio’ with the new PS5 gaming console could arguably provide more satisfaction than putting money away for retirement – a possible 30+ years down the road.

The sooner you make it a priority to invest for retirement, the better. When time is on your side, it’s a huge ally. The earlier you start, the more you benefit from the power of compounding, which is when the returns that you earn begin to pay off. RSPs allow for unhindered growth because investment earnings are not taxed as long as the funds remain in the account.

Here are some important factors to consider when it comes to saving for retirement:

Compounding Returns

Have you ever built a snowman?

Compounding returns on your investment work in the same way as building a snowman – the longer you compound your interest or reinvest dividend payments (or roll your snowball through the snow) the larger your initial investment (or snowball) will get.

The longer the length of time your investment is compounded, or the earlier you start investing, the greater your snowball/wealth may be when you reach your goal.

Increased Risk Tolerance

As a young investor, you tend to have time on your side – especially if you are building your wealth to save for retirement. If the value of your investments goes down, you generally have enough time to recoup your losses. This also allows you to invest more aggressively into new, more speculative opportunities and offers the potential for larger returns by taking on larger risks.

The value of experience

Having exposure to market volatility and experiencing how your advisor works for you to protect your capital is invaluable but not gained overnight. Learning early to trust your advisor can make a significant difference in your journey to build wealth. Investors can sometimes get caught in misinformation or find themselves trying to time the market. Having the right relationship with a trusted advisor will instead point you in the right direction.

In times of uncertainty, it can be tempting to sell your investment and hide it under your pillow. An advisor can put things into perspective and could show you this chart – it shows the growth of investing $10,000.00 in January 1990 to December 2019 and the difference missing some of the best days in the market. These days often occur after a period of market concern.

Better financial habits

Creating the mindset of savings first, spending later is not as easy as it may seem – it can take years before it becomes natural. Starting young and designating a portion of your income into a savings or investment account keeps the money “out of sight and out of mind” and the sooner you get into the habit of saving before spending, the more time you have to reach your goals and build your wealth.

After reading this blog, it is my hope for you that when it comes to your investment journey, you remember the reasons to start as soon as you can. Book a meeting with a Mainstreet advisor today.

Marc Pranger | Investment Advisor | Credential Asset Management Inc. | Sarnia Region – Exmouth St.

Book a Meeting Today

® Qtrade is a registered trademark of Aviso Wealth Inc. Online brokerage services are offered through Qtrade Investor, a division of Credential Qtrade Securities Inc., a wholly owned subsidiary of Aviso Wealth Inc.

Mutual funds are offered through Qtrade Asset Management (a tradename of Credential Asset Management Inc). Mutual funds and other securities are offered through Qtrade Advisor, a division of Credential Qtrade Securities Inc.

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.

Written by Doug Price (Wealth Management Manager, Mainstreet CU, Senior Wealth Advisor, Credential Securities)

In 1982 Wayne Gretzky scored 92 goals in a single season. This single-season NHL goal-scoring record remains intact after 38 years. Impressive. My parents told me to pay attention. “This will never happen again”. So far they have been correct.

The S & P 500 Index set an all-time closing high February 19, 2020, with a closing value of 3386 points. Today , August 18, 2020, this all-time high was breached and the S & P 500 Index closed at 3389 points. The previous record lasted 181 days or 49.58% of one year. This means the S & P 500 Index has regained all of the losses from the low points in March. It also means the S & P 500 has recovered from every pullback, correction or bear market in its 90 plus year history. To this point, there has been nothing that has been able to stop this measurement of wealth from achieving new highs.

Here is an interesting tidbit. Gretzky scored his 92nd goal of the season on March 28, 1982. The S & P 500 index closed on March 26, 1982(a Friday) at 111.94 points. The average annual return on investment in the S & P 500 Index over this 38 year period has been approximately 9.40%. If dividends were reinvested the total return works out closer to an annual average of 12%. During these 38 years, the S & P 500 set more than one hundred new closing highs. All have been surpassed. All an investor had to do was invest and wait.

Even more interesting, the S & P 500 set a yearly high of 31.86 in 1929, the year of the most famous stock market correction in history. This tells us someone with the worst market timing in history still managed to increase investment more than 100 fold, excluding dividends, just by sitting and doing nothing. If dividends are included the total return is greater than a 200 fold increase in value. Important to know the many investment options available to us today were not available in 1929 so these numbers are theoretical in nature. They do illustrate the best time to invest for the long term is when you have the money available and free to be committed for an appropriate amount of time.

So what do a hockey goal scoring record and the S & P 500 Index have to do with each other? Nothing. Absolutely nothing. The only possible commonality is the fact 2020 has provided us the chance to see the Stanley Cup playoffs begin in August and the market index achieves another new high watermark in the same month. I feel it is fair to say this is a spurious correlation.

Other than the above, the only thing I can think of is the old cliche about records being made to be broken.

I wonder which record will last longer, the S & P 500 record closing high of 3,389 or Wayne’s goal total of 92?

Disclaimer: Mutual funds and other securities are offered through Credential Securities, a division of Credential Qtrade Securities Inc. The information contained in this email was obtained from sources believed to be reliable; however, we cannot guarantee that it is accurate or complete.