Lesson 20: Introduction to Investing
Lesson 20: Introduction to Investing
Embedded Files
Before we talk about investing, let’s talk about time
Before we talk about investing, let’s talk about time
Meet Jordan, a Grade 10 student with a part-time job.
Jordan works a four-hour shift after school. That shift costs Jordan time, energy, and focus. At the end of the shift, Jordan gets paid.
That money is not just cash. It represents stored time.
When Jordan spends the money right away, that time is gone.
When Jordan saves the money, that time is paused.
What happens if Jordan uses the money in a way that allows it to grow?
This question is the starting point for understanding investing.
As your teacher, I want you to notice something important here:
Money is not just about buying things. It is about what your time can do later.
What saving really does
What saving really does
Saving means putting money aside so you can use it later.
Saving is useful because:
It keeps money safe
It makes money easy to access
It helps with short-term goals
Jordan saves money for:
School expenses
Activities
Things coming up soon
Saving is not a bad choice. In fact, it is a necessary one.
But saving has a limit.
Saved money usually does not grow very much. Over time, prices increase. This means saved money slowly loses power.
This is where investing enters the story.
Key Vocabulary (Read this first)
Key Vocabulary (Read this first)
You will see these words in bold as you read. You do not need to memorize them yet. Your goal is to begin recognizing them and understanding how they are used.
Investing – using money in a way that allows it to grow over time
Saving – setting money aside to use later
Risk – the chance that something could lose value
Return – what you gain or lose from using your money in a certain way
Time horizon – how long you plan to leave your money alone
Diversification – spreading money across different places
GIC (Guaranteed Investment Certificate) – a very safe investment with a guaranteed return
Stock (share) – owning a small piece of a company
Bond – lending money to a government or company
Mutual fund – a collection of investments managed by professionals
ETF (Exchange-Traded Fund) – a basket of investments you can buy all at once
TFSA (Tax-Free Savings Account) – a Canadian account where investment growth is not taxed
RESP (Registered Education Savings Plan) – a Canadian account for saving and investing for education
Liquidity – how easily money can be accessed
Real estate – land or buildings used as an investment
Introducing investing
Introducing investing
Imagine Jordan plants a seed.
At first, nothing happens. Days go by. It looks like the seed is doing nothing.
Then, slowly, something changes. The seed grows into a plant.
Jordan did not stand there and force the seed to grow. Jordan just put it in the right place and gave it time.
Investing works the same way.
Investing means placing money somewhere and leaving it alone so it has time to grow.
It is not:
A trick
A shortcut
A way to get rich fast
It is a long process built on patience.
This idea has a name. It is called investing.
Why investing exists at all
Why investing exists at all
If saving were enough, investing would not exist.
But the world changes over time:
Education costs more
Homes cost more
Living costs more
If money stays the same while prices rise, money becomes weaker.
Investing exists to help money keep up and grow.
As your teacher, I want you to understand this clearly:
Doing nothing with money is still a decision.
Jordan learns that choosing not to invest means choosing slower progress.
Risk and time: why patience matters
Risk and time: why patience matters
Every investment involves risk.
Risk means there is a chance that money could lose value.
This sounds scary, but risk changes depending on time horizon.
A short time horizon means you need money soon
A long time horizon means you can wait
If Jordan needs money next year, taking big risks would not make sense.
If Jordan is saving for something ten years away, ups and downs matter less.
Time helps smooth out risk.
This is why investing rewards patience.
Diversification: spreading out the risk
Diversification: spreading out the risk
Imagine Jordan puts all their money into one thing.
If that one thing fails, everything fails.
Diversification means spreading money across many places.
This could mean:
Different companies
Different types of investments
Diversification does not remove risk, but it reduces the damage of bad luck.
Jordan learns that spreading risk is smarter than guessing.
GICs: the seatbelt investment
GICs: the seatbelt investment
A GIC (Guaranteed Investment Certificate) is one of the safest investments in Canada.
When Jordan buys a GIC:
The bank promises to return the money
The bank promises a set amount of interest
The time period is fixed
GICs are predictable.
They are best for:
Short-term goals
Money that must not be lost
They are not good for fast growth.
Jordan uses GICs when safety matters more than growth.
Bonds: lending money carefully
Bonds: lending money carefully
A bond is a loan.
Jordan lends money to:
A government, or
A company
In return, Jordan earns interest.
Bonds are usually safer than stocks but riskier than GICs.
They grow money slowly and steadily.
Jordan sees bonds as a middle ground.
Stocks: owning part of something real
Stocks: owning part of something real
A stock means ownership.
When Jordan buys a stock, Jordan owns a tiny piece of a company.
If the company grows:
The stock may rise
Dividends may be paid
If the company struggles:
The stock may fall
Stocks change value often. This is normal.
Over long periods of time, stocks have grown more than most other investments.
Jordan learns that stocks are not about today. They are about the future.
Mutual funds: investing as a group
Mutual funds: investing as a group
A mutual fund pools money from many investors.
Professionals manage the money and choose investments.
This provides:
Built-in diversification
Less decision-making
Mutual funds charge fees for management.
Jordan understands that fees reduce growth over time.
ETFs: simple, low-cost baskets
ETFs: simple, low-cost baskets
An ETF (Exchange-Traded Fund) is like a mutual fund, but simpler.
ETFs:
Hold many investments
Usually have lower fees
Are easy to understand
Jordan prefers ETFs because they allow investing without guessing which company will win.
TFSA: where investing happens matters
TFSA: where investing happens matters
A TFSA (Tax-Free Savings Account) is not an investment.
It is an account that holds investments.
Money inside a TFSA grows without being taxed.
Jordan learns that taxes can slow growth, and TFSAs help protect it.
RESP: investing for learning
RESP: investing for learning
An RESP (Registered Education Savings Plan) helps families plan for education.
Money is invested inside the account, and the government may add grants.
Jordan sees how investing and education planning connect.
Real estate: investing in property
Real estate: investing in property
Real estate includes houses and land.
Real estate can:
Increase in value
Provide rental income
But it also:
Costs a lot
Is hard to sell quickly
Requires ongoing care
Jordan understands that real estate is a long-term option, not a quick one.
How Jordan thinks about investing now
How Jordan thinks about investing now
Jordan does not look for the “best” investment.
Jordan asks:
What is my goal?
How long can I wait?
How much risk makes sense?
Investing becomes a matching process, not a guessing game.
Final idea to remember
Final idea to remember
Investing is about giving your money time to work.
It is built on patience, planning, and understanding choices.
You do not need to invest now.
You do need to understand how investing works.
That understanding is what this lesson is about.
Page updated
Google Sites
Report abuse