Creating an investment plan from the ground up is one of the smartest financial decisions Canadians can make. Whether you’re looking to grow wealth, save for retirement, or reach specific goals, a well-structured plan helps you invest with purpose and confidence.
1. Define Your Financial Goals
Start by identifying what you’re investing for: a home down payment, children’s education, early retirement, or general wealth building. Clear goals determine your time horizon, risk tolerance, and account selection.
2. Build an Emergency Fund First
Before investing, set aside 3–6 months’ worth of expenses in a high-interest savings account. This provides financial security and prevents you from dipping into investments during unexpected events.
3. Choose the Right Accounts: TFSA and RRSP
- TFSA: Great for tax-free growth and flexible withdrawals. Ideal for short- to medium-term goals or general investing.
- RRSP: Designed for retirement, with upfront tax deductions. Best for long-term goals, especially if you’re in a higher tax bracket.
4. Decide on Your Asset Allocation
A balanced portfolio includes a mix of equities (for growth), bonds (for stability), and possibly alternative assets. Younger investors typically take on more risk (e.g. 80% equities), while older investors may prefer more conservative allocations.
5. Pick a Platform and Investment Products
Use a robo-advisor for automatic, diversified portfolios or a DIY brokerage for full control. Look for low-fee ETFs or index funds to start.
6. Set a Regular Contribution Plan
Contribute monthly through automatic transfers. This “dollar-cost averaging” strategy smooths out market volatility and builds discipline.
7. Review and Adjust Annually
Life changes and market shifts require periodic updates to your plan. Rebalance your portfolio once or twice a year to stay aligned with your strategy.
A clear, consistent investment plan tailored to your goals is the foundation of long-term financial health in Canada.