Maybe you’re at the age where everyone keeps talking about stocks, bonds, and making impactful investments. Or maybe you don’t know the difference between chequing and savings.

Whether you’re watching the market or wondering what it even is—it’s never too late to learn the basics.

Let’s dig in to some need-to-know info of investing and unpack the top tips for making smart and informed investments.

Age matters

Knowing what you’re willing to risk or lose is the first step of investing—but what if you’re not sure how much risk is appropriate for you?

We like to calculate risk by age. If you’re 25 years old, you can probably afford to be 25 percent risky and 75 percent safe. Think about it—you’re at the beginning of your career, working to pay off student loans, and probably beginning to think about home ownership (or a similar adult-adjacent goal). This is the age to start building a nest egg and focus on having fun—without the nightmares of losing all your savings on a startup claiming to be the next Instagram.

This also applies for those who are seasoned in their careers as well. If you’re 50 years old than you can most likely afford to be 50 percent risky. By this time in your life, you may have already paid off your mortgage, maybe your kids are moving out and starting college, and you could likely have a comfortable amount of savings to fall back on. Of course, this isn’t the case for everyone—so we always recommend chatting with an expert before you put all your (nest) eggs in one basket.

Risky vs. safe

Something that changes daily or hourly is considered a risky investment. Yes, risky investments can pay off big time—but most of the time you can guarantee your investment will be not returned to your pocket. As long as you go into the investment with the understanding that you may not receive any reward, you’ll never be disappointed.

Bonds, GICs (Government Issued Certificates), and TFSAs (Tax-Free Savings Accounts) are almost always guaranteed to return the same amount you invest. Low-risk investments are a great way to store your money in a place that ensures you will keep your initial deposit. If you’re not ready to dabble in higher-risk investing, a TFSA is a great way to invest and monitor your savings.

Interest rate or rate of return?

Knowing the terminology can make or break your experience. It can be tricky hearing everyone talk about stocks and bonds like we’re binge-watching a show about the cut-throat life of workers on Wall Street.

As with everything else in life, it makes sense when you break it down.

Rate of return is exactly what it sounds like. It’s the percentage of the return you get back after you calculate how much money you put into the investment.

Interest rate on the other hand, is the rate at which the financial institution or the lender of the loan charges you based on your credit score and their perceived profitability of the loan.

When in doubt, ask a specialist

There’s no harm in asking for help—in fact, it could actually put you further ahead. Investing can be confusing and we’re here to guide you every step of the way. We have informed specialists who can help you choose the right investing options for you. Reach out to your local credit union to learn more about their service offerings on investing.