How to save and invest your first $100k

Now that you know how much you’ll be investing, the next step is to determine how you’ll invest that money.

Choose an account type

In Canada, there are registered and non-registered accounts. Generally, you’ll want to maximize registered accounts first because of the various tax benefits they offer.

Here’s a quick summary of the 3 most common registered investment accounts*:

See disclosures at bottom of the page for more details.

Choose an investment solution

There’s lots of great investment options out there, like individual stocks, exchange-traded funds (ETFs), index funds, mutual funds, and more. But how do you know which option is suitable for you? 

The appropriate investment solution will depend on your goals, time horizon and ability to stomach risk. A great place to start is with a Scotia Portfolio Solution tailored to your risk tolerance and goals. On top of being an easy single-ticket investment with everything you need one place, Scotia Portfolio Solutions offer low investment minimums, instant diversification, and professional management. You will leave all the day-to-day decision-making and rebalancing to the experts so you can set it and forget it.

Feeling intimidated by your options or have questions? Your Scotiabank advisor can give you financial advice to help you choose the right portfolio for you so that you can feel more confident about reaching your financial goals and have one less thing to worry about (Figure 3).

Figure 3: Help is here

Source: Scotia Global Asset Management Investor Sentiment Survey, Fall 2024.

Proactively monitor your finances. Track your progress to keep yourself accountable. Here are some ways you can check in with yourself periodically:

• Review your credit card bills and bank statements: Are all expenses necessary? Can you cut more?
• Check in during major life events: Have your expenses or savings goals changed?
• Seize opportunities to save: Avoid lifestyle creep, which is to say when your income increases, try to save more instead of spending more. If you get a raise, higher paying job, or windfall (like a bonus, cash gift, tax refund), consider topping up your investments. 
• Watch your balance: A large cash balance in your bank account might be better put to work in your investment account.

Set your goals and stay committed. Building up good habits is hard, but once you establish them, it gets easier. The hardest step is often getting started, but by setting your goals and pushing through the initial phase, soon enough these habits will feel like second nature. That’s not to say it’s easy, but the key is to try and stay consistent.

Patience is a virtue – Just like Rome wasn’t built in a day, reaching your financial goals takes time. You might even hit some road bumps in the short-term, like stock market volatility or news headlines that make you question if it’s a good time to invest. But rest assured - if your financial plan is aligned with your goals, timeline and risk tolerance, often the best thing to do is nothing and simply staying invested - your future self will thank you!

Save up to speed up

Curious how long it takes to save $100k? Figure 4 shows examples of different monthly investment amounts and the corresponding time it takes to reach that goal. Boosting your monthly savings amount, all else equal, can speed things up. The more you save each month, the quicker you'll get there! And the sooner you get to $100k, the sooner you’ll be on your way to reaching your next financial milestones thanks to compound growth (Figure 5).

Figure 4: Time to reach the $100k target investing various amounts

For illustrative purposes only. Uses a 6% illustrative rate of return. Assumes an initial investment amount of $0. The calculations assume reinvestment of all income and no transaction costs or taxes.

Figure 5: The value of ACTing sooner

Two investors each reach $100,000, one at age 25 and the other at 35. If they stop saving and simply let their funds grow through the power of compound growth, the 25-year-old will have over $750,000 by retirement, nearly twice as much as the 35-year-old.

For illustrative purposes only and is not intended to reflect an actual rate of return or the future value of an actual mutual fund or any other investment. Based on an assumed rate of return of 6% and assumed retirement age of 65. Assumes no further contributions were made once the $100,000 milestone was reached. This illustration does not account for the impact of inflation.