Common Investment Myths – And How to Break Them

 

 

Let’s talk about investment myths. Have you started investing yet? If the answer is yes, think about the last time you sat down with a financial advisor and reviewed your portfolio to ensure your investment strategy is still aligned with your goals. If the answer is no, ask yourself why not? Maybe it’s because you don’t think you can afford it,  maybe it’s because you’re afraid of the risk versus reward or maybe it’s because you don’t see the value in paying fees.

 

Here’s the good news, today I’m debunking common investment myths. Actually, I’m going to shatter them. Whatever the reason may be that’s holding you back from reaching your full investment potential, it all ends now. If you’re hesitant about seeking financial advice, investing in the market and exploring different investment options, don’t worry because other people are too – that’s why there are so many common investment myths.

 

The key is to tell the truth about the current state of investing and help Canadians implement an investment strategy that you’re comfortable with.

Here are the real answers to three common investment myths:

 

I can’t afford to invest

 

Yes, you can. Everyone, whether you’re 16 or 56 can afford to put a portion of your after-tax income towards investing. The percentage varies depending on your monthly household expenses and individual disposable income, but yes everyone can afford to invest. So often people feel that saving investing are just for the wealthy – and that’s just not true.

 

I don’t need professional advice

 

Oh yes you do, everyone does. Why? Because there is so much more to creating an investment strategy than choosing the right stock at the right time – and I don’t do that because that’s not what smart investing is about.

 

The truth is investing is about finding solutions that align with your short term and long-term goals as well as your risk tolerance and time horizon. The Manulife investment philosophy is “There’s a difference between access to investments and investing successfully. Managing money wisely is a full-time job which takes experts with significant experience and skill.”

 

On a side note, timing the market to buy in on the absolute lowest day of the year and selling on the absolute highest day of the year to gain the maximum profit is another common investment myth. That doesn’t happen.

 

I shouldn’t have to pay fees

 

Well yes you should. In life we all have to pay for a professional service. I can’t think of a scenario where you get a service for free – except for the library. If you want the best dentist then you have to pay for it. The exact same principal is true when it comes to investing.

 

Of course, you can open a self-directed online brokerage account and manage your own money, but do you have the years of experience and professional expertise of a financial advisor? This is the real reason why paying for a professional service is worth the cost. It’s about access to investments (because you could do that yourself online) it’s about the experience and the expertise.

 

I hope this helps overcome some of your hesitations when it comes to building a relationship with a financial advisor and creating an investment strategy that fits your individual needs. If you want to discuss other common investment myths then let’s chat.

 

*This content was originally created by Manulife Securities for information purposes only. It has been distributed for advisor publication.*

How to Live Happily Ever After With Your Money

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According to a recent study by Ameriprise, nearly 70 per cent of couples say they’re living happily ever after because of good communication with their spouse when it comes to money. However, many couples still confess they disagree over day to day money management such as personal spending limits and making major purchases.

 

General personal spending such as eating out and entertainment as well as the purchase of big ticket items such as vacations and home renovations are some of the most common disagreements that couples have about money. Does that sound like you?

 

Here are three ways to live happily ever after when it comes to your spouse and your money.

 

How to balance saving vs. spending

 

One of the easiest ways to avoid disagreements about money is to maintain individual spending accounts. This is especially true if one you is a saver and the other is a spender. A lot of couples merge their finances upon marriage, but that’s not always necessary.

 

Maintaining separate accounts allows each spouse to spend based on their net income – which most likely varies within the couple. Tracking spending with a budgeting tool such as Mint, the Spending Tracker app or a tool offered by your financial institution, will help couples get an idea of where their money is going and make adjustments where necessary.

 

Discuss major spending – prior to the purchase

 

It’s a good idea for couples to agree on purchases before buying big ticket items such as appliances, vacations and electronics. Once you both agree, create a savings plan so you can start putting money aside together.

 

Talking regularly with your loved one about financial priorities is a key to living happily ever after with your money. Being open and honest about where you spend money and what you want to buy allows couples to work together to create a financial plan to make your dreams a reality.

 

Micro-manage your money together

 

To eliminate miscommunications and surprises with your bottom line, both spouses should be equally involved in managing your family finances. Many couples delegate one spouse to handle the day-to-day money management and that’s OK, but even if you don’t want to be the household CFO, it’s important to be involved in and aware of how the money is managed.

 

Create a family budget so both spouses are aware of your fixed household costs (these are the expenses that don’t fluctuate from month to month like insurance, utilities and mortgage payments) as well as your monthly variable costs (such as groceries, clothes and entertainment). Together, you can decide where you can cut costs and start saving towards your goals.

 

If you want to start the money conversation with your loved one or want to start a family budget, please contact me today to learn how I can help achieve your goals and live happily ever after with your money – and your spouse. 

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