Grow me the Money

The Basics of Investing, working with a Financial Adviser and other Important Financial Information

Who am I, Who do I work for and What do I do?

Ainsley Cunningham, B.A., B.Ed.

The Manitoba Securities Commission

Education and Information

AgendaThe head and the Heart

Importance of Money Management - PRIZE

Money Challenge Question - PRIZE

Working with a Professional

Investment Scams

Tips

Questions

Money Management

Involves both our…

•Heart – emotional

•Head – intellectual

Fundamental Freedoms

Allows us freedom…

•Of choice

•From worry

Why is it important to learn how to manage our Money? Practical

• Money matters affect virtually every aspect of our lives, at every age of our lives.

• Typically, money management rests with one family member. (Do you know what is going on? Story)

• Cost to achieve our dreams

• No one is more interest in my finances than me

• Because of the caregiver status there are significant financial penalties

Why is it important to learn how to manage our Money? Statistics

• Canadian women live longer than men.

• Average age of a widow is 56 years, typically live 27 years alone.

• 30% of Canadian women will be widowed by 65 and 50% by age 75

• Poverty rate for unattached women 65+ is 43.4%

• Women earn ____ cents for every $1 that a man earns. (prize)

• 28% of women do not have a pension or retirement plan

Money Challenge QuestionWould you rather have $10,000 now or a penny

a day doubled for 30 days?

What is investing?• At its most basic, it is giving money to

someone else with the expectation you will get a return.

• What the return is will depend on what you invest in.

Three Investment Characteristics•All investments have:

• Expected Return

• Risk

• Liquidity

Why are there rules?

Securities range from simple to very complex

Average person does not have knowledge to assess every type of investment

When securities trading first developed there were significant abuses resulting in people losing their life savings

As a result activity became regulated with a focus on public protection

What are the rules?

Securities legislation is provincial

While there are some differences from province to province, there are two basic rules:

• You must be registered to trade securities.

• Issuers must use a prospectus to sell their securities to the public.

What are the rules?

Why have registration?

• Public protection

• Expectation of professional advice

• Want to have minimum education and experience requirements

What are the rules?Who is registered

• RESP dealers and salespeople

• Mutual fund dealers and salespeople

• Investment Dealers

• Investment Counsel/Portfolio Managers

Who isn’t registered

• Fee only financial planners

• Insurance salespeople

What are the rules?

Why have a prospectus

• Rights for purchasers to sue

• Rights for purchasers to rescind

• Rights triggered on delivery of prospectus

• Prospectus rights continue indefinitely until prospectus delivered

• Offences under the Securities Act

Know yourself

Assess your financial situation

Identify your investment objectives

Understand your tolerance for risk

Know Your Adviser

Credibility/Trust

Comfort

Reputation

Experience - answers

Investment Approach (philosophy)

Price/fees

Customer service

Know Your Responsibilities

As a client you should:

Establish your goals before you invest

Inform of any financial changes

Avoid investments you don’t understand

Read what you sign

Monitor your account

Keep notes

Know your Client

Your advisor needs to know you too

• Account opening and Know-your-client

• Suitability

• Ask about any changes

1

.01

2

.02

3

.04

4

.08

5

.16

6

.32

7

.64

8.

1.28

9

2.56

10

$5.12

11

$10.24

12

$20.48

13

$40.96

14

$81.92

15

$164

16

$328

17

$655

18

$1311

19

$2621

20

$5243

21

$10486

22

$20972

23

$41943

24

$83886

25

$167772

26

$335544

27

$671089

28

$1342177

29

$2684354

30

$5638709

31

?

$10,737,418

Investment Scams

The Investment is highly confidential

There is no written documentation

“Hot tip” or “inside information”

You can achieve a high rate of return

There is no risk

$2,205,230 lost due to scams

What can and should YOU do?•Talk to people about money issues, friends, family or professionals•Find out where you stand•Make a plan – budget•Look at ways to cut back•Use a buddy system•Stay away from temptations•Shop for bargains•Don’t impulse buy•Celebrate your successes

Learn always, always learn

The Manitoba Securities Commission

500-400 St. Mary Avenue

Winnipeg, Manitoba

R3C 4K5

Tel. (204) 945-4733

e-mail: aicunningh@gov.mb.ca

Web: www.msc.gov.mb.ca