We spoke to an expert to find out how young Canadians can start investing smarter
The economic landscape for young Canadians has changed drastically. With wealth-growing methods like home ownership that have worked for our parent’s generation feeling so out-of-reach, one of the ways millennials and Gen Z can make meaningful gains to hit their financial goals is by investing. But there’s a lack of confidence in traditional systems.
A recent survey by Co-operators, a leading Canadian financial services co-operative, found that only a quarter (26%) of Canadians aged 18-44 feel confident in their ability to choose investment opportunities that will make money. What’s worse, nearly half (44%) say they feel like they don’t have enough money to invest.
To help you feel more comfortable making solid investments as a younger Canadian, we spoke with Vice President of Co-operators advisor network Jessica Baker about using social media to your advantage, spotting financial misinformation, finding credible sources of information, and starting your investing journey right.
Social media’s role in your investing knowledge
A key component that Baker brings up, which makes investing for young Canadians very different than their parents, is the access to real-time information via the internet and social media.
“Social media is a really important part of the narrative about how we engage Canadians, particularly young Canadians, on getting started in investing,” Baker tells Daily Hive. “Social media influencers, different platforms like Instagram and TikTok, they’re all great tools.”
But, because there’s a plethora of information coming from sources that might not be all that credible, Baker cautions that it may be difficult to weed out what’s useful to you while spotting “fad” investments.
“We see, particularly on social media, a lot of information about nontraditional investments, like crypto, NFTs (non-fungible tokens), and speculative investments, which is difficult to counter. You really need to speak to a professional to discern what is right for you.”
Learning to spot investing misinformation
While the advice might be something you’ve heard before, it bares repeating — Baker says that if an investment looks too good to be true, it probably is. If you’re seeing opportunities on social media that are promising large returns with no risk or stocks with an abnormally large interest rate, it’s best to steer clear.
A lot of non-credible influencers are oftentimes trying to get you to invest by selling you a product, so be wary of a good investment that’s riddled with product placement.
“The next thing I would ask myself, if I [saw an investment opportunity] on social media, is: what is this individual’s credibility in terms of speaking to me about this investment vehicle or about this product?” says Baker. “If you know an influencer to be somebody who generally promotes something else, and all of a sudden they’re talking to you about investments, is that the best source of advice?”
Finding credible sources of financial information
Unfortunately, there’s no one-size-fits-all approach to investing because your financial needs are indeed specific to your circumstances. Baker says the best thing you can do to find a credible source of information is to find a financial advisor near you to help assess your options.
Unlike big banks, Co-operators is an investing and insurance cooperative, which means it’s an organization that isn’t profit-driven or investor-owned.
“We believe that the value of financial security for Canadians and our communities comes before profit,” says Baker. “So unlike some traditional financial institutions, we don’t operate on a profit-first business model. And as an organization, we balance the needs of our clients with profits.”
With 600 locations across Canada, financial representatives at Co-operators can give you holistic investment and insurance advice tailored to your specific needs to help you plan for your financial future while living your life today. They also offer a resource centre that’ll help you make better sense of your finances.
Making investing more accessible for young Canadians
While young Canadians may feel like they don’t have enough money to invest, that really isn’t the case, says Baker.
“I think some investors are afraid of the fact that their quality of life is a barrier to them getting started, or they’ll need to scrimp and save to invest. Financial security and peace of mind shouldn’t come at the price of enjoying your life.”
When looking for a financial advisor, Baker suggests looking for someone who understands your unique circumstances and can tailor a plan that will balance your need for financial security against your lifestyle.
The financial representatives that work with Co-operators all live and work in their communities and are facing a lot of the same barriers to entry as any other millennial or Gen Z’er. While it can be difficult to get started, even setting aside a small amount of money under the guidance of a financial advisor will help you make gains.
“One of the most powerful things you have as a young investor is time in the market,” says Baker. “Money that is exposed to mechanisms like interest or returns is the most powerful tool for wealth accumulation, and the longer your investments are exposed to the market, the more opportunity they have to grow. It’s not as important how much you start with, it’s about regular contributions and time to the market.”
To learn more about how you can get started on your investment journey, find a Co-operators financial representative near you and talk to them today.
Co-operators® is a registered trademark of The Co-operators Group Limited. Not all products are available in all provinces. Co-operators is committed to protecting the privacy, confidentiality, accuracy and security of the personal information that we collect, use, retain and disclose in the course of conducting our business. Please refer to our privacy policy for more information. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual fund securities and cash balances are not insured nor guaranteed, their values change frequently, and past performance may not be repeated.
Mutual funds are offered through Co-operators Financial Investment Services Inc. to Canadian residents except those in Québec and the territories. Segregated funds and annuities are administered by Co-operators Life Insurance Company. Terms and conditions apply. Please refer to cooperators.ca/mutualfunddisclosure for details.
© 2023 Co-operators Financial Investment Services Inc. © 2023 Co-operators Life Insurance Company.
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