Finance is a huge part of our everyday lives as children, teenagers, students and adults. We all need to understand how to save, invest and plan our financial future.
Here on Ability online, Elizabeth Naumovski discusses ‘Financial literacy’, without jargon, in plain language, within our Financial Literacy Forum.
Now a little bit about the astounding women that is Elizabeth Naumovski. Elizabeth is well versed in the financial arena, having worked on Bay Street for over 20 years. She has her Chartered Marketer designation and also has her Investment Advisor licence.
She hosts a 30 minute show called Finance is Personalwhich airs on CHCH TV Hamilton on Saturday & Sunday mornings. When the show is not on television, you and audiences worldwilde, can watch it 24/7 on YouTube. The show tackles issues women and everyone face throughout their lives financially. Topics can be the basics such as what is a stock or an RRSP, the laws of living together and marriage, teaching your children about investing, the finance of divorce, the death of a loved one, debt and budgeting and FOMO (the fear of missing out). She helps prepare you for situations that you might not know exist by discussing financial literacy and gives you the education to prepare for events when life throws you life altering curve balls financially.
Through her online Financial Literacy forum, she discusses important questions such as; How should we plan for our future? and When should we plan our future? With her professional guests they explain and tackle these pressing questions that we all face within out day to day lives. The financial industry has so many different buzz words and use jargon that simple things can get quite confusing, complicated and difficult.
With the help of Elizabeth Naumovski, Ability Online has created a forum for members called ‘Finance is Personal,’ where member’s questions can be discussed and responded to.
Elizabeth and guest speaker Cindy Crean touch upon this in the first episode of the online series. What is the importance of a Financial Advisor? Someone who is looking out for your best interests and can help you when it comes to investing, saving, mutual funds, and stocks. Ironically, many of you had asked these same questions in the forum; regarding mutual funds, investing, saving and much more. Elizabeth responded to your questions with a great amount of detail and even gave examples as to what you can do financially and how you can achieve it.
Now here are the tips to Financial Literacy!
Savings can be quite difficult as life can be unpredictable, and the amount of money you have on a monthly basis might have to go towards the unexpected without any extra left over for savings. One of the best ways to save is to start now! Put aside $20 (or whatever amount you can afford) per week or per month and begin to live your life without that cash. Create a budget and see where your money is spent on a monthly basis, it will be easier for you to create a savings plan and actually stick with it if you know exactly what your monthly expenses are. The key is to live your life without debt. If you can’t afford it, don’t buy it. Now, there are times in your life when this is impossible and you need to go into debt. That’s why an emergency fund is important to have. Always put money aside in an emergency fund as well, so that when you have an “emergency” situation, you will have some funds to back you up.
Mutual funds are different investment vehicles that most people mistaken as an RRSP (“Registered Retirement Savings Fund”) or TFSA (Tax Free Savings Account”). A mutual fund is the investment vehicle that you put in your RRSP or TFSA. A mutual fund is a collection of different company stocks and bonds that are part of a portfolio. Investors purchase a unit of the mutual fund so that they have invested in a portion of the mutual fund. As Elizabeth explained it's like putting items into a shopping cart, the mutual fund is your shopping cart and every item in the shopping cart is added or deleted by the Portfolio Manager. Please note, mutual funds are not guaranteed. Their value will go up and down with the stock market. If you have invested in a very risky mutual fund, then the value of that fund will fluxuate a lot. You should always invest depending on your personal risk tolerance and what makes youc comfortable and will let you sleep at night.
When you purchase a stock, you are actually purchasing ownership in a company. For example, let’s say that your favourite make-up is a Red Lipstick (also known as the Red Lipstick Company “RLC”). The RLC is a private company, owned by one or many individuals or even employee owned. After functioning as a small company, the RLC has decided to become a publicly traded company and sell shares into their company.
This means that the RLC is going to sell portions (shares) of the company to the public. The RLC has a certain number of shares that are available on a stock exchange (open market) and the public can purchase or sell the shares. What you are essentially doing is purchasing ownership of the company. Therefore, if you own stock in the company, you have become a small owner/investor in the RLC company. You are now a shareholder and can vote at Annual Meetings.