Alice’s Book Club – SPRING session of 2025

Spring is peacefully unfolding in our part of the world, allowing me to organize on Friday (April 11, 2025) the session of the current season for my Book Club series, having as guest speaker a dear friend – Daciana Healey (her biography in comments section), who spoke to our fairly large group about retirement planning and investment opportunities.

“It is not always easy to think about retirement because retirement plans do not carry the excitement usually associated with one’s life ambitions and professional goals. Yet any prudent person knows retirement planning is one of the most important decisions in life, even more now as people are living longer and social security system may not be sustainable in the long term. Planning for the long term may continue to evolve according to life circumstances which are naturally hard to predict.”

Our guest speaker this evening graciously delivered an interesting presentation, adopting the interactive approach - addressing questions as arise.

It was clearly understood that retirement planning is a very structured process, and in order to do it right you need to have a proper framework and access to a trusted financial advisor.

On the other hand, briefly talking about investment/s it helps to refresh that investing is “the act of putting money into something with the expectation of gaining a profit or income”. It can involve purchasing stocks (stocks represent ownership in a company; when you buy stocks, you can earn money if the company does well), bonds (bonds are loans to companies or governments; you earn interest over time), real estate (real estate involves buying property to rent or sell at a higher price), or even starting a business.

“The goal of investing is to grow wealth over time. However, it does come with risks….understanding these risks and potential rewards is crucial for anyone considering investment options. It is important to understand that people invest for many reasons. One common reason is to build wealth for the future. Many individuals want to save for retirement. Investing can help grow their savings over time. Others may want to reach specific financial goals, such as buying a home or funding education. Some investors seek to generate additional income through dividends or rental payments. Understanding personal financial goals helps determine the best investment strategy.”

Every investment carries some level of risk (risk refers to the chance of losing money or not achieving the expected returns).

Generally, higher potential returns come with higher risks. For example, stocks can provide great returns, but their prices can also fluctuate significantly. On the other hand, bonds are usually considered safer, but their returns are often lower. Balancing risk and return is essential for successful investing. Before investing, it’s important to conduct thorough research. Understanding the market, companies, and economic conditions can help make informed decisions. For instance, when investing in stocks, knowing a company’s performance, industry trends, and competition can be beneficial. Many investors also analyze historical data and financial statements to gauge potential risks and returns. Knowledge is key to successful investing.

Diversification (involves spreading investments across different asset types or industries) is a strategy to reduce risk. By diversifying, investors can protect themselves against losses in one area. For example, if someone invests only in technology stocks, a downturn in that sector could lead to significant losses. However, if they also invest in bonds, real estate, and other stocks, they may not lose as much. Diversification can lead to a more stable overall portfolio.

Time plays a crucial role in investing. The longer you invest, the more potential your money has to grow. This is due to a concept called compound interest (compound interest means you earn interest on both your initial investment and the interest that accumulates over time). For many, starting to invest early can lead to a more comfortable financial future, as the effects of compounding can be significant.

In summary, investing involves putting money into various assets with the hope of earning a profit. Different types of investments come with unique risks and rewards. Understanding personal financial goals and conducting research is vital. Diversifying investments can help manage risk. Finally, leveraging time can significantly enhance the growth potential of investments. Making informed choices can lead to successful investment outcomes.

Wrapping up my briefing, for your convenience, here is a “retirement financial checklist” (offered by the Government of Canada) which might help you with the process. Additionally, here is another document, called “Basics of investing” (also offered by the Government of Canada) which might bring along supplementary insights. Once again, dear friends, thank you for joining our event this evening! Until next time, from me, only the best!

Alice

“Retirement is wonderful if you have two essentials: much to live on and much to live for.”