Investing in Ourselves: Canadians' Quest for Financial Independence

In the ever-evolving landscape of Canadian finance, the quest for financial independence has become a paramount goal for many investors. The RBC Financial Independence Poll of 2024 provides a comprehensive snapshot of the current economic climate and investor sentiment, revealing both the challenges and opportunities that lie ahead. As we delve into the findings, it becomes clear that Canadians are not only aware of the economic uncertainties but are also taking proactive steps to secure their financial futures.

The poll highlights that Canadians estimate they will need approximately $846,437 to ensure an independent financial future. This figure is notably higher for respondents living in Alberta ($928,179), Saskatchewan/Manitoba ($958,535), and Ontario ($916,714), as well as for Gen X ($1,128,990) and Millennials ($945,748) across the country. This reflects the increasing cost of living and the financial pressures that Canadians are facing. Despite these challenges, 49% of all respondents invested during 2024, indicating a proactive approach to financial planning.

One of the key concerns highlighted by the poll is market volatility and investment performance. Almost half (48%) of all respondents agreed that their key investing concern is market volatility and investment performance, with 54% of Millennials and 46% of Gen X sharing these same worries. This concern is likely driven by the recent market turbulence and the potential impact on their ability to build enough savings to reach financial independence.

The poll also reveals that just over half (51%) of Canadians now have a financial plan, which includes 50% of Millennials and 44% of Gen X. This suggests that Canadians are recognizing the importance of having a financial plan to navigate through periods of market volatility and economic uncertainty. The poll also found that having a financial plan made respondents feel 'confident' (42% and 38% respectively) and 'reassured' (30% and 35%).

Craig Bannon, Director, Regional Financial Planning Support, RBC, advises that "the value of having – and sticking to – a good financial plan with a long-term approach, to help get through any periods of turmoil." This advice is particularly relevant in the current economic climate, where market volatility and inflationary pressures are causing concerns among investors.

The poll findings also indicate that Canadians are investing in a variety of assets, including mutual funds, stocks, GICs/term investments, pension plans, ETFs, and cryptocurrency. Diversification helps spread risk across different asset classes, reducing the impact of volatility in any single area. For example, 24% of Canadians invested in mutual funds, 20% in stocks, and 21% in GICs/term investments, indicating a balanced approach to investment.

The poll also highlights the importance of having a financial plan and the value of sticking to it. Craig Bannon, Director, Regional Financial Planning Support, RBC, advised that "the value of having – and sticking to – a good financial plan with a long-term approach, to help get through any periods of turmoil." This advice is particularly relevant in the current economic climate, where market volatility and inflationary pressures are causing concerns among investors.

In summary, the findings from the RBC Financial Independence Poll reflect the current economic climate and investor sentiment in Canada, with Canadians recognizing the importance of financial planning and investing despite the economic uncertainties. The poll also highlights the concerns about market volatility and investment performance, which are likely driven by the recent market turbulence and inflationary pressures. By adhering to these strategies, Canadians can better navigate market volatility and protect their investment portfolios.