Financial Tools Canada

   Tool:  Historical Return Here`s a simple free tool to understand and view the historical return of the market. It is essential to understand to not be affraid. Lucky for us, the institute of financial planification and other sources offer freely the information of the last 50 years and even earlier. As an important note, to understand the return, we need to be concern of the devastating impact of inflation. To access the tool, simply click the link above. It is a link to an Excel file without macros. The main goal of the tool is to give you access to the historical return data of various investments. It should help you see and understand economic valleys and downturns. See further below for more relevant information from the file. Analysis : There is a ton of analysis we can draw from stock market returns. It would be impossible in this short article to analyze the entire market, so here are a few insights I find interesting: Findings :  Average real return (net o...

We often hear the term trust fund babies. How can you create them? How is this relating to the time value of money? I want to explore how much do you need to invest in a baby to make him a millionaire in today's dollar.  Let's use a portfolio returning 7.1%.  At this rate, we need to put aside for the baby $11,600 for him to become a millionaire at age 65! That is without inflation. Net of inflation, or said otherwise 1 million in today money, $41,900 would be required.  Required balance to get 1 million at ag 65 with a return of 7.1% and 2% inflation  Note that these are all proportional numbers, meaning that half of $11,600 would provide for half a million at age 65 starting from 0, before inflation. In Canada, we recommend investing in a RESP for the children (max $2,500 per year). We qualify for 20% from federal from the SCEE. If you are in Québec, you also qualify for 10%. Here’s a small table if you contributed to the maximum from birth up to a certain age. Ne...