Buying Financial Insurance in Canada

 

If you're a Canadian who has been in the workforce for a decade or more, you know that your income today buys less than it did in your first year. Inflation is a natural part of our society, and as long as our government continues to devalue our currency by printing more of it, inflation will undoubtedly persist. There is no doubt this is not just a Canadian’s people issue. People all over the world are feeling the effects of inflation caused by excessive money printing; but more on that later. The long and short of it is that YOUR MONEY WILL CONTINUE TO BUY LESS as time passes.

A quick 100-year calculation using the Bank of Canada's (BoC) inflation calculator revealed that a fixed "basket" of consumer purchases cost $100.00 in 1915. That cost was $2,083.61 at the end of 2015. Recently, prices have risen 18.01% in the last ten years. Has your income increased by the same amount or more?

The answer is most likely no.

Whether you make six figures or $30k per year, your "money" is losing purchasing power. There are numerous ways to protect your money from depreciation, but we'll focus on two popular options.

The stock market is one option; invest a portion of your savings in a portfolio and see what happens. To me, this sounds like gambling. However, if you're willing to leave your finances to factors (and people) other than your own due diligence, investing in stocks may be a good fit for you under the following two conditions:

You can handle volatility, and your primary goal is to see a significant return in a short period of time... hopefully.

Another option, and the most common and popular, is to open a bank savings account. Simply open the account, decide how much and how frequently you want to save, set it to auto-pilot, and watch your savings grow.

 Truly?

In the present economy, bank investment accounts are not a reasonable reserve funds vehicle. The vast majority of the loan fees offered are acquiring underneath expansion rates. The miserable the truth is numerous savers make a future withdrawal just to understand that thy have lost cash on an after-expansion premise.

So, what should you do if you're not an experienced investor?

 

Purchase financial insurance.

 

We have insurance for almost every aspect of our lives, but many of us hope we never have to use it.

Purchasing financial insurance in Canada, or anywhere else, is investing your money in a vehicle that is long-term protected from the ups and downs of the volatile economy.

 

Purchasing financial insurance protects your purchasing power and acts as an inflation hedge. Although the global economy is changing, the only economy that should concern you is your own.

 

For nearly a decade, as an independent insurance advisor and income protection specialist, I have provided clients with customised personal insurance and financial solutions through disability, life, critical illness, long-term care, and other personal insurance products, as well as strategies for income hedging and wealth preservation.

Author: RabnawazToor