The true cost of putting off your plans to invest
Most Canadians don’t need a central bank report to know their money isn’t stretching as far as it used to.
They feel it at the grocery checkout, at the gas pump, and on their monthly utility bills.
But while investing remains the single best defense against inflation, 34% of Canadians have never put their money to work, driven by market anxiety, tight budgets, and a lack of financial confidence.
In today’s climate, uninvested cash is like an ice cube melting in warm weather.
If given the choice between holding onto $5,000 or investing it, what would you choose? For many, there is something psychologically reassuring about seeing $5,000 in cash sitting in their savings account.
However, the longer that money sits there, the more it loses its purchasing power.
For example, at a hypothetical 3.5% annual inflation rate, $5,000 held as cash over a 5-year period would have the purchasing power of roughly $4,210 in today’s dollars. That’s the equivalent of losing $790.
So, if you’re choosing to hold on to cash because investing feels too risky, you may be taking on a different kind of risk—one that could be quietly costing you more over time.
When you hold on to cash, you risk missing out on potential growth. Because when you leave money sitting on the sidelines, you aren’t protecting it from risk—you are guaranteeing a slow, predictable loss.
If inflation is the force pulling your financial security backward, investing is the engine that drives it forward.
Specifically, investing unlocks the single most potent math hack available to savers: compound growth. Let’s look at a parallel comparison of what happens to $150 a month compounded over 20 years:
| The Decision | Monthly Contribution | Total Cash Contributed | Final Value After 20 Years (Assumed 7% Return vs. Cash) | Real-World Outcome |
| The Cash Blanket (No Investing) |
$150 |
$36,000 |
$36,000 |
Severely eroded by decades of inflation. Buys significantly less than it does today. |
| The Compound Engine (Invested) |
$150 |
$36,000 |
~ $78,000 |
Money more than doubled, outpacing inflation and building real equity. |
So, you see—by actively investing $150 each month, compound growth does the heavy lifting for you.
With a pension plan in place, you might be thinking that investing doesn’t need to be a priority.
Just remember, however, that your member benefits aren’t a complete financial plan. While your pension is an incredible foundation for retirement, it is designed to be a baseline—not a complete safety net for your long-term goals.
Investing fills financial gaps in the here and now and realizes goals that your pension cannot.
It enables you to save a down payment for your first home, build an emergency fund for life’s unexpected moments, and put money aside to confidently take advantage of a deferred salary leave. Investing ultimately grows your personal wealth in a way that you control entirely.
The best part is, you don’t need a large sum of money to get started.
Setting up bi-weekly or monthly pre-authorized contributions of just $25 or $50 means the money will leave your account before you even have the chance to miss it (or spend it on inflating consumer goods).
When it comes to those contributions, how often you invest can also make all the difference.
Suppose you want to invest $600 each year—you could choose to invest:
- $50 every month
- $150 every three months
- $600 once a year
The total annual contribution is exactly the same. However, investing earlier and more frequently gives each contribution more time in the market. More time in the market equals more compound growth.
For example, assuming a hypothetical 7% annual return:
- $50 invested monthly for 5 years would grow to approximately $3,580
- $150 invested quarterly would produce approximately $3,555 over the same period
Although the difference isn’t dramatic over 5 years—the numbers will begin to grow exponentially the more you contribute and the longer you’re invested.
Not only do more frequent contributions provide more time for growth, but they also allow you to invest at a variety of market prices throughout the year. By investing regularly, you have more opportunities to buy when prices are lower, rather than relying on a single annual purchase date.
Use our Investment Growth Calculator to see how your consistent contributions can grow over time.
To further maximize compound growth and subvert ‘lifestyle creep’, be sure to increase pre-authorized investment contributions as you move up the pay grid.
Whenever you get a pay bump, consider immediately diverting half of that new money directly into your investment account. That way, in addition to your household budget getting a financial boost, your compounding engine will also get an upgrade.
As life ultimately continues to get more expensive, investing shifts you from a state of vulnerability to full control where your finances are concerned.
While you don’t have a say about the inflated prices at the pump or the grocery store, you can absolutely decide what happens to the next dollar that you earn. Just remember that the cost of sitting on that dollar results in a quiet reduction on your quality of life.
By shifting even just a small portion of your income into a compounding investment strategy, you stop playing defense against inflation and start building a financial structure that works just as hard as you do.
Need help coming up with your investment strategy? We’ve got your back and budget.
Whatever your goals, Educators Financial Group can work with you to put together an investment plan that aligns with wherever you are on the pay grid. Plus, count on us for educator-specific tips and resources to help you navigate the challenges of today, so that you’re in a better position to realize your ultimate dreams for tomorrow.
No more waiting: put your investment plan into motion right now
Investment returns are not guaranteed. The examples in this article are for illustrative purposes only and do not represent the performance of any specific investment or a prediction of future returns. Investment values can fluctuate, and investors may lose some or all of their original investment. Consider your financial circumstances, objectives and risk tolerance before investing.
