Buying Financial Insurance in Canada

If you are Canadian and have been in the workforce for a decade or more, then you know that your earnings are buying less today than in the first year of your career. Inflation is part of our society and while our government continues to devalue our printed currency more and more, inflation will no doubt continue. However, this is not just a Canadian concern. All over the world, people feel the effects of inflation due to excessive printing of money; But more on again. The long and short of it all is this: your money will continue to buy less over the years.

A quick 100-year calculation using the Bank of Canada’s (BoC) inflation calculator showed that the cost of a fixed “basket” of consumer purchases in 1915 was $ 100.00. At the end of 2015, this cost was $ 2,083.61. More recently, prices have risen by 18.01% over the past 10 years. Has your income increased in equal or greater amounts?

The answer is probably no.

Whether you earn six figures or earn 30,000 a year, your “money” is losing purchasing power. There are many ways you can protect your money from devaluation, but we will discuss two common options that people take.

One option is the stock market; Put a quantity of your savings in a wallet and see what happens. Sounds like a game to me. But if you are willing to leave your finances to other factors (and people) other than your due diligence, then putting your money into shares can be a good option for you in the following two conditions:

You have a stomach for volatility and,
Your main goal is to see a substantial return in a short period of time … hopefully.
Another option, and usually the simplest and most selective, is to open a bank savings account. No complications involved; Just open the account, decide how much you want to save and how often, put it in autopilot and see how your savings increase.

Really?

In today’s economy, bank savings accounts are not a profitable savings vehicle. Most interest rates offered are gaining below inflation rates. The sad reality is that many savers make a future withdrawal only to realize that they have lost money after inflation.

So what do you do if you are not a smart investor?

Buy financial insurance.

We have insurance for almost every aspect of our lives, but insurance is something that many of us hope not to have to use.

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About Tanveer

Muhammad Hammad Tanveer graduated from the Virtual University Of Pakistan with a B.S. in Software Engineering and is now a writer for Pcbeducation.com and Education News Daily. His background in EDUCATION TUTORING brings a critical eye to his reviews and features, helping students make the best decisions for their studies.

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