Финансы в Канаде
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Lately, a lot of our clients have been asking about cash. Those who are fortunate not to have had their incomes disrupted by the pandemic are typically spending less, and for some, there’s a tendency to hold more cash when the world feels uncertain. I thought you might find my perspective on cash — how much of it to keep on hand, and when it’s better to invest it — helpful as you think about your short and long-term finances.
Cash is great for short-term savings If you're going to need most of your savings within the next few years — say for a downpayment, or for tuition payments — cash is a great place to put it. Outside of these goals, it can be a good idea to keep a few months' expenses in cash for emergencies.
Cash loses value over time When you hold cash, you’re guaranteed to lose a little bit each year thanks to inflation — and this is especially true now. Interest rates (the rate at which you earn money on your cash) are below the rate of inflation (the rate at which your money loses value). Savings held in cash for 5-10 years are expected to lose somewhere between 5-10% of their value.
Investing is a better bet for long-term savings While cash is safer in the short term, but loses value in the long term, the opposite is true for riskier assets like stocks and bonds. In the short term they can fluctuate, but they’re expected to increase in value over time (here's a deeper explanation of why that is). If you don’t need your savings in the next few years, history shows that a diversified portfolio of stocks and bonds (the kind you have with Wealthsimple Invest) is the best way to grow them.
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