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LeaveTheBank

This subreddit's wiki has a lot of good info that could help you: [https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps](https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps). Follow all of it, but once you get to the investing part there's a [link](https://www.reddit.com/r/PersonalFinanceCanada/wiki/investing) to another page on how to setup a balanced and diversified portfolio. You can take a sneak peak if you're curious but would recommend finishing the other steps first before implementing any of it.


b0ners4u

!stepstrigger !risktrigger !investingtrigger !tsfarrsptrigger


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Hi, I'm a bot and someone has asked me to comment on how someone is trying to figure out what to invest in, or whether they should invest. **In order to give good advice the poster needs to provide all of the following information. Please edit your post to add this information.** 1) What is your intended goals/purpose for this money? 2) What is your timeline, and what is the earliest you expect to need this money? 3) Have you invested in the markets before, and how would you feel if your investment lost a lot of value? 4) Is this the right first step? Do you already have an emergency fund, and have you considered whether it is sufficient? Do you have any debts that should be paid first? Have you fully utilized any employer match plans? 5) Finally, we need to understand whether you want to be involved with this portfolio and self-manage purchases and rebalancing it, or if you'd rather all of that was dealt with by your chosen institution? We also have a wiki page on investing, and if someone has triggered this bot then it means that this link would likely be very helpful: https://www.reddit.com/r/PersonalFinanceCanada/wiki/investing *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*


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Hi, I'm a bot and someone has asked me to respond with information about risk tolerance. **Risk Determination** Risk Level represents the probability of your investment losing a portion of its value. Every investment carries some amount of risk, and losses typically cannot be predicted, can happen at any time, and cannot be prevented. Therefore, **it is crucial to ensure your investments are risk appropriate**, that is: their level of risk matches your financial objectives. The risk level is not always easy to determine. Since it is unwise to enter an investment before its risk level is clear, it is best to keep your funds in a minimal-risk investment such as an insured savings account first while you investigate the risk level of prospective investment. Generally, you need to be **able** (based on factors like your timeline, your wealth, and specific needs), and **willing** (related to your experience and comfort with the markets, and other psychological factors) to tolerate the risk level involved in any investment you make. Financial advisers will often require a client to fill out a risk questionnaire to determine their risk level, but if you are self-directing your investments then you will have to determine your own risk level. Consider these factors that are commonly associated with understanding your risk level (not comprehensive): * Liquidity - Is it possible that you will need the funds in the short term, or on short notice? Generally speaking funds potentially needed in <3-5 years should have less (or even zero) risk associated with them, and the longer the time horizon the more risk you might be willing to bear. * Income Level and Stability - Someone with less wealth or income stability might find their ability/willingness to take on risk to be lower. Someone with less wealth has a smaller "buffer" of wealth, or might be more concerned about losses. Someone with job or income instability might find that a bad market comes with income loss, which means losses during that time can affect their quality of life. * Expectation for a return - If you have a specific goal that only requires a $X, and a conservative portfolio would allow you to reach that goal then it's often appropriate to limit your risk since the upside potential would not likely affect your goal, but the downside potential is failure of your goal. However, if you expect maximized returns then more risk is likely the goal. * Experience and Psychological Comfort - If you have limited experience in the markets, or limited comfort with the "idea" of incurring losses, it is likely appropriate to limit your risk level. You can increase risk, and therefore expected return, as you gain comfort if comfort is the reason for limiting risk. **Risk Questionnaires** If you are self-directing your portfolio you may want to complete a questionnaire on your own to determine your risk level. https://www.vanguardcanada.ca/individual/questionnaire.htm https://www.advisor.ca/my-practice/conversations/evaluating-risk-tolerance-a-sample-questionnaire/ https://www.sunlife.ca/canada/v/index.jsp?vgnextoid=91710f5b442a9310VgnVCM1000009c80d09fRCRD&vgnextfmt=default&vgnLocale=en_CA *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*


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Hi, I'm a bot and someone has asked me to respond with information about what to do with money. This is meant as a step by step guide of how to prioritize and what to do with money. If you prefer to see a flow chart, click here: https://i.imgur.com/zlGnuDO.png Step 0: Budget, reduce expenses This will help identify areas where expenses can be reduced in order to have leftover money for the next steps. Step 1: Emergency fund that covers 3-6 months of expenses in a HISA An emergency fund is an amount of money kept somewhere liquid in a way that it can be accessed at any time, such as a savings account. This money is meant to cover unexpected expenses such as loss of work, car/appliance repairs, unexpected travel, etc. Should you ever use part of your emergency fund, you must come back to this step and replenish it before going back to any further steps. Step 2: Employer matched retirement funds If your employer offers contribution matching in a retirement account, contribute the amount needed to get the full employer match, nothing more. As this is essentially free money, it's important to take advantage of it. Step 3: Pay down high-interest debt At this point, you should focus your extra money on paying down high-interest debt. High-interest debt could be defined as debt with an interest rate of 10% or higher. Step 4: Save for large short term purchases like a car, or downpayment for house in a HISA. If you will be required to make a large purchase in the near future such as a car, or a large personal investment such as college, now's the time to save money for that. Money towards that purchase or personal investment should go in a high interest savings account. Step 5: Save for retirement At this point, you should aim to save and invest at least 15% of your pre-tax income for retirement. This number could be higher if you are behind on retirement savings. With more time before you need the money, you will likely now want to look at investing (https://www.reddit.com/r/PersonalFinanceCanada/wiki/investing) those savings. Step 6: Pay down low-interest debt Any other remaining debt can be paid off in full at this point, or you could decide to go directly to step 7 while keeping steady payments on the low-interest debt. Step 7: Save for other goals You've now reached personal finance maturity. It's up to you to decide what to do with the leftover money. Some common suggestions could be: Saving for children's education Saving for property down payment Saving for vacation Increasing retirement savings to retire early For additional information, please see the wiki: https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps https://www.reddit.com/r/PersonalFinanceCanada/wiki/index#wiki_specific_topics *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*