More than one in two Canadians do not invest their money, according to a survey

More than one in two Canadians do not invest their money, according to a survey
More than one in two Canadians do not invest their money, according to a survey

Nearly 52% of Canadians say they don’t put money in savings accounts each year, according to a recent survey. The majority of them, however, say they are comfortable investing their own income.

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According to the firm Ipsos for CIBC, the lack of knowledge about the economy is the main reason explaining this lack of participation.

The repercussions are even greater with the current economic context.

However, 56% of Canadians say they are comfortable investing their money themselves. As far as information is concerned, 51% of citizens, or more than half, are well informed about investments.

These are statistics that are surprising for Jean-Sébastien Jutras, financial planner for Jutras Gestion de Patrimoine. The latter thought that there were more people investing their income.

Financial literacy remains quite low in Canada and Quebec, explains the planner. It would therefore be normal for knowledge to be lower among Canadians.

A fear of investment

Many Canadians fear doing so because of the risk, Mr. Jutras then explains. “They will therefore invest in […] savings accounts where we will give a return on investment which is very low,” he adds.

They should instead try their hand in the stock markets, where most have a risk profile that is “very safe.” This would therefore be an opportunity to obtain more attractive returns.

“People are especially afraid of an investment that could decrease,” specifies the expert.

The other concern for Mr. Jutras concerns people who do not invest for their retirement, or those who do not do it enough. The repercussions will be even more serious in the future, as people live to an increasingly advanced age.

A bad surprise for taxes

Citizens who work during their active period should take the opportunity to contribute to RRSPs, according to the planner. “Otherwise, you end up paying a higher tax rate,” he warns.

This rate becomes lower as you approach retirement, i.e. when you withdraw your RRSPs.

How to improve your knowledge of the economy

Jean-Sébastien Jutras reiterates that schools should introduce students more to financial concepts.

Financial institutions also play a certain role, but it is not up to them to educate the entire population, according to him.

“We know how to calculate Pythagoras […], but there are many people who don’t even know how to make their own declarations, he illustrates. However, everyone must do it.

The planner also gives tips for automating payments and establishing a budget. For him, a simple amount of $50 invested per week could make the difference, if income allows.

Watch the full interview in the video above.

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