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This is the stuff you millionaires in the making need to know to kick start or propel you on your financial fitness journey. Tracey Bissett, Founder of Bissett Financial Fitness and award winning Financial Literacy Champion, gives you the straight goods each week to set yourself up for financial success. As a former executive at TD Bank, one of Canada's Big 5 Banks, Tracey has worked with and in support of thousands of individuals and entrepreneurs to secure the financing they needed.  This hands on experience combined with her formal financial education, Masters of Business Administration and Chartered Financial Analyst designation, position Tracey uniquely to coach all things money. Tracey goes behind-the-scenes of all the money matters with need-to-know tips, money-making demystified, and special power-player interviews. Join us weekly for Financial Fitness Training that will turn even a Cash Couch Potato into a Marathon Money Maker.

May 29, 2018

Understanding the basics is foundational when learning a new skill or pursuing new undertakings. The first step before investing is to equip yourself with the basics of how investing works. It is crucial that you understand how investment returns are generated and how investors gauge and manage risks based on their investment objectives and time horizon.


“No matter what your time horizon or risk tolerance, you should never invest your money in something you do not understand.” - Tracey Bissett


Today, I’m sharing a micro-training on investment basics including the definition of some common investing and saving financial terms. I discuss what investment objectives are as well as the four main asset classes: 1) equities (i.e. stocks), 2) fixed income (i.e. bonds), 3) cash equivalents (i.e. money market instruments) and 4) alternative investments (i.e.: real estate, commodities and cryptocurrencies). I also talk about why it is crucial to know your risk tolerance and how to determine the best investment choice or decision for you.


“Everybody is going to have a unique perspective and something that you’re more comfortable with than someone else. This is why investing is a very personal decision.” - Tracey Bissett


This Week on Young Money:

  • What is investing and the primary goal of each investor
  • Definition of terms such as principal, capital, return, investor
  • What compound interest is and why it is so desirable
  • What diversification, risk tolerance and liquidity are
  • The difference between a guaranteed vs. non-guaranteed investment
  • What is an investor or investment risk profile
  • The concept of time horizon defined and how one investor may have multiple time horizons
  • The importance of understanding how various investment returns (interest, dividends and capital gains) will be taxed
  • The four main asset classes
  • How to assess your investment plan based on your time horizon and risk tolerance


Key Takeaways:

  • Never invest your money in something you do not understand.
  • It’s okay to say you are a beginner and you do not have a lot of investment knowledge, especially to the person you are going to be making investments with. It is their responsibility to help with your financial education so you can make great investment decisions.
  • Never be afraid to ask questions. No question should be considered stupid or bad.
  • Anybody who’s trying to sell you an investment should be prepared to commit the time to help you learn.
  • Generally, if somebody cannot explain the investment to you in simple terms, it’s probably not the right thing for you or they may not be the right investment advisor for you.
  • Invest with your brain and not with your emotions. 
  • It is never too early or too late to start investing.


Resources Mentioned:


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