How to prepare your finances for coming to Canada + MORE Oct 27th

Q. I’m 30 years old and have 30 years to go until retirement. I already have a good pension with my employer so I’d like to try a 100% equity portfolio. Is there a Couch Potato portfolio that would suit my needs? Any ideas on which ETFs to hold?–Jonathan

A. Conventional investing wisdom says that young people can afford to be aggressive, especially if they can look forward to a defined pension plan in retirement. I’ve heard from many investors in their 20s and 30s who, like you, are contemplating an all-equity portfolio, and it’s not surprising. Stocks have a significantly higher expected return than bonds, so if you have a long time horizon, why not strive for maximum growth?

The problem is that what makes sense on a spreadsheet doesn’t always hold up in real life. While long-term stock investing has mostly been rewarding, the short-term is often gut-wrenching. We have seen this in 2022. Market fluctuations will frequently trim your portfolio by 20% in a matter of a few months—this is called a bear market—and during your lifetime you should probably expect an all-stock portfolio to be cut in half at least once, as well…

If you’re moving to Canada (or you’ve recently arrived), you’re probably learning new things about this country—including how our banking system works, how we handle our personal finances and how to find a place to live. The more you know about money, savings and buying a home in Canada, the better prepared you’ll be for your new life here.

How and why you’re moving to Canada

Your financial needs, priorities and choices in Canada will be determined, first and foremost, by the reason you’re moving here. Are you moving here to study or to work?

International students: If you’re arriving as a student, you can open a savings account at a Canadian bank and, if you are of legal age—18 or 19, depending on the province or territory—get a credit card and start building your credit history. A healthy credit score is helpful if you want to borrow money in the future, such as a car loan or a mortgage. Potential employers and landlords may also consider your credit score…