Canadian women lag men when it comes to financial literacy. According to a 2014 study from Statistics Canada, only 15% of women, compared to 22% of men, could answer basic questions on interest, inflation and risk diversification in investing. Test your know-how here and go for the gold…then pass it on to your friends. Nothing like a little friendly competition!

5/5 = gold medal
4/5 = silver medal
3/5 = bronze medal



1. A good investment adviser should be able to predict stock market returns.
2. Passive (index) investing beats active investing most of the time.
3. All exchange-traded funds(ETFs) are index funds.
4. The only investments you can hold in a Tax-Free Savings Account (TFSA) are savings accounts.
5. Inside your RRSP and TFSA, your investments grow tax-free.




Don’t believe anyone who tells you they know what the stock market will do and definitely don’t let them manage your money! Stock markets are unpredictable and, as we have seen, often volatile. Setting up a financial plan that incorporates a reasonable long-term rate of return for your investments based on your asset allocation is a great idea. Counting on each year’s gains matching up to your expectations is a recipe for stress and disappointment.


Don’t believe your neighbor who tells you her adviser always does better than the stock market indices. Study after study has revealed that active portfolio managers fail to beat the market after fees more than 85 per cent of the time. Passive investing wins time after time, partly because the market index naturally captures all the hot stocks on their way up and rides them higher while out-of-favour stocks fade away. Passive investing also wins because management fees are much lower, leaving more of the portfolio’s gains in the hands of the investor.


Some investors learned this the hard way in February 2018 when certain aggressive derivatives-based exchange-traded funds (ETFs) dropped in value by 80-90 per cent in a matter of days. Yes, the early ETFs were index funds, but today’s ETFs can be constructed from variety of assets: stocks, bonds, commodities, and even derivatives. What they all have in common is that they can be bought and sold by investors using a discount broker. Every ETF provider is required to publish an ETF fact sheet stating the investment objectives and holdings of the fund, its recent and longer-term performance, as well as the fees that the investor pays. Always read the ETF fact sheet before buying any ETFs.


The federal government gave TFSAs a terrible name by calling them Tax-Free Savings Accounts, sowing confusion from the day these were introduced in 2009. In your TFSA, you can hold the same assets you can hold in your RRRP: stocks, bonds, guaranteed investment certificates (GICs), and yes, savings accounts if you so choose. It’s time to lobby for a rebranding. How about calling them TFIAs? Tax-free investing accounts?


This tax-free compounding of your investment returns works like magic over time to grow your investments. Even Einstein was impressed: He called compounding the 8th wonder of the world. If your investments grow by 9 per cent per year, they will double in only 8 years. Taking a tax bite out of these returns each year could mean they only double every 12 years. Both the TFSA and RRSP are tax-sheltered investment vehicles ideally suited to building up your nest egg for retirement. Proceeds from your TFSA incur no tax. Because RRSPs are only tax-deferred accounts, they are not tax-free. You pay income tax at your marginal tax-rate when you make a withdrawal from them.


How did you do? Basic financial literacy is the cornerstone of your financial independence. It takes time to build your proficiency, even professionals need to constantly brush up as circumstances change. One way to stay on top: Subscribe to Golden Girl Finance and pass it along to your friends!