Tired of just dreaming about your big dream? We are here to help you make it come true!
- Describe your dream on paper.
- Determine the initial capital you need.
- Establish the steps to make it happen.
- Set a reasonable deadline for making your project happen.
There are two main ways to fulfil your dream.
- The marathon approach (savings) for future projects, as explained on this page. Examples: Someday, you'd like to travel to China, take a trip around the world, start your own business, or take a year off.
- The sprint approach (financing) for current needs.
Examples: You just started a family, your apartment is too small, and you'd like to buy a house.
How to Save to Build My Capital
- Make your mortgage payments on a weekly rather than monthly basis. The amortization will be shorter and you will pay less interest.
- Put all your coins in a jar at the end of each day, and then put this money in your savings account at the end of each month.
- Don't touch your bonus! Put it directly into your savings account.
- Any other ideas you may have are good too, like bringing your lunch to work instead of eating out, etc.
Small Savings Go a Long Way
Do you know how much you can save in the long term just by putting away a small amount every day? Suppose you cut out one $5 daily expense and you put that amount in a long-term investment at a rate of 6% for 20 years. Check out the chart to see how much you would pocket in the end.
Weekly contribution of $25*
* Contributions made at the start of the period, calculated at an annual compound interest rate of 6%.
$50,000! You would never have guessed, right? Think about it, if you start saving when you're 25 or 30 years old, you'll have $50,000 to put into the project of your choice by the time you're 45 or 50!
Of course, it isn't always easy to save in the long term. You need discipline and endurance, just like in a marathon. Here are two tools that can help.
Investment Excellence Savings Account
Why Excellence? Because there is no monthly account maintenance fee and the interest rate increases progressively with each savings tier1 you reach. And although it is paid monthly, the interest is calculated on the minimum daily balance. The more money you put into it, the more you make.
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Periodic Savings and Investment Plan
With this plan, saving is easy. You decide how much you want to save each month or each payday. The amount will immediately be transferred to the investment of your choice2. It's automatic! And you can change the amount and frequency of the withdrawals whenever you like.
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Tax-free Savings Account (TFSA)
Are you saving up for a project in the near future? The Tax-Free Savings Account (TFSA) is made for you. “What is it?” you ask? The TFSA is an account registered with the Canada Revenue Agency. While there are no tax benefits with your actual contributions, the account does allow you to grow your savings and investments in a tax-sheltered way. In this sense, the TFSA is like your RRSP and can complement it – to help you plan for the short term, for example, or save for your retirement. Contrary to an RRSP, it allows you to make withdrawals whenever you please with no tax penalty while recovering your contribution room in subsequent years. Not bad, eh?3
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Your dreams can't wait any longer?
1. For information on the rates in effect, contact your advisor or call 1-800-252-1846 (toll free).
2. Administrative fees may apply to registered accounts; however, no fee will be charged for portfolios of $25,000 or more, or portfolios comprised of guaranteed investment certificates only.
3. No annual or withdrawal fees are applicable to a Tactical TFSA. A $125 fee will apply to any fund transfer (in whole or in part) to another institution. Certain fees may be subject to the GST and QST. Fees are subject to change.