10 Costly Mistakes Canadian Investors Make
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What are the 10 common mistakes Canadian investors make?
Investing is simple, but don't confuse that with thinking it's easy. A stock is not just a ticker. At the end of the day, you have to remember that it's a business.
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This has to be one of the biggest quarters I've seen from this company in quite some time.
Welcome back to the Canadian Investor Podcast. I'm Simon Berage. I'm back with Dan Kent. We have a fun episode here. So we're going to be going over 10 common mistakes Canadian investors make. Now, to be fair, there are some of these that you could find that investors in the U.S. or elsewhere in the world probably make as well. But there are definitely some. Canadian specific ones. And we'll be talking also about some surveys that will illustrate some of these mistakes. So should be a fun episode. I know I've done, you know, in the past, not recent past, but in my younger days, I definitely did a few of these mistakes. I would be lying if I said no.
Yeah, I think I've made, well, 8 out of 10, I would say I've probably made. But yeah, that's kind of where I pulled the list from was, you know, stuff I used to do that I don't really do anymore. But yeah, it should be, a lot of these are going to be ones that you might have never thought of or maybe things you're doing out of convenience that, you know, there might be a little bit better of an option. But yeah, it should be a good episode.
Yeah, exactly. So let's get started. The first one I have is treating a tax-free savings account, so TFSA like a savings account. And this one, unfortunately, it seems to be reoccurring. I thought over time there'd be more awareness, but for whatever reason, I keep seeing surveys that are done and just shows that a lot of Canadians are still really confused as to what a TFSA is. So a TD survey that was conducted in late 2025 found that 65% of Canadians hold a TFSA, but 39% of them are not investing the money inside of it. It's even worse when you start thinking about Gen Zs and millennials, where 41% of them are not investing the money inside their TFSA. And this lines up, I searched some older surveys because I'm like, okay, my memory can't just be my memory.
I'm pretty sure I've seen these kinds of surveys time and time again. And sure enough, I found one from 2019 showing that people either didn't understand what type of investment can be held in a TFSA or just use it as a savings account. And for Gen Z and Millennial who don't have a TFSA, three quarters of them stated that the biggest barrier preventing them from opening a TFSA is their lack of knowledge for that type of account. It's not, they didn't say it was because they had no money to put in it, which I'm sure a portion of them That might be the reason, but they said it's their lack of knowledge. They don't know how to get started. So that's still pretty alarming considering that the account has been around for some time and there's a lot of documentation out there.
The actual cost of not investing the money can just be really massive. So just as a quick example. And I made this relatively low because if we have younger listeners that are listening that may not have thousands and thousands of dollars to put in a TFSA, that would apply a bit more to them here. So say you put $1,000 in a TFSA and add $50 a month for 20 years. At 2% interest, which I think it's probably fair for a savings account, 2%, because that's pretty much what you'll get, especially when you're looking at the banks that always give you the best interest rates when it comes to just savings account. Well, that $1,000 with the $50 monthly for 20 years would be a bit more than $16,000, but- Say you get a conservative 6% per year return by investing the money instead.
So instead of having 16,000, you'd get a bit more than 26,000 at the end of the same period. So it's a massive difference. Of course, if you have even better returns, 7, 8, 9, 10% annually, then it's even more start than the example I gave.
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