Why Canadians Should Invest, Not Just Save

A recent survey found that nearly half of Canadian TFSAs hold nothing but cash. That's millions of Canadians leaving potentially hundreds of thousands of dollars on the table over their lifetimes. Here's why saving isn't enough.

Inflation eats your savings

If inflation averages 2-3% per year and your savings account pays 2%, your money is actually losing purchasing power over time. A dollar saved today will buy less next year. Investing is how you stay ahead of inflation and actually grow your wealth.

The cost of not investing

Let's compare two Canadians who each have $50,000:

• Saver: Keeps it in a HISA at 3%. After 20 years: ~$90,000
• Investor: Puts it in a diversified ETF averaging 7%. After 20 years: ~$193,000

That's a $103,000 difference. And if both were also adding $500/month, the gap becomes even larger.

But what about risk?

Yes, markets go down. Sometimes significantly. But over any 20-year period in history, a globally diversified stock portfolio has always delivered positive returns. The risk isn't investing — it's not investing and letting inflation slowly erode your wealth.

How to start

You don't need to be an expert. Open a TFSA at Wealthsimple or Questrade, buy XEQT or VEQT, and set up automatic monthly contributions. That's a globally diversified, professionally managed portfolio for 0.20% per year. Your future self will thank you.