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Early Memory of Banking

I must have been a toddler when my mom had to take me to the bank. She was a stay at home mom so I had to go everywhere she went. The banking hours way back in the 1970s were far and few between compared to today’s bank hours. That’s where the term banking hours came from. They used to be open between 10am and 4pm, so that’s why I was dragged to the bank in the middle of the day while my dad was at work. He would give my mom very specific instructions on what do to. She would usually carry the instructions on a piece of paper. My dad said he ordered gold bullion from Bank of Nova Scotia and my mom would go and pick it up. It might have been a trendy thing to do, not sure but Bank of Nova Scotia was a pioneer in the public lending of gold.  

Scotiabank coat of arms

We were not rich by any means but when I asked my dad how he could afford certain things, he would tell me he has no vices. He doesn’t smoke or drink so that’s how he was able to save and buy some luxuries. We lived within our means and I never felt deprived of anything. Having rich friends from two income professional families who pressured him to spend more money, or buy a bigger home or a nicer car, never swayed him from his financial goals.

So there I was at the bank as a little girl, my earliest memory of banking. I remember a line of people and when we got to the teller I was too short to see them. The one thing I loved about going to this particular local bank was studying the coat of arms that decorated the wall at my eye level while my mom did the transactions. In fact, I thought they placed the art there just for kids like me, to keep them occupied. The coat of arms was from the Bank of Nova Scotia now called Scotiabank. I remember the regal looking animals on it, the knight’s helmet, and the intricate details. I traced everything with my finger until I had to leave. There was a unicorn representing bravery, innocence and purity among other traits. It likely represents the banks connection to the early Scottish settlements in Nova Scotia, the unicorn is a symbol of Scottish heraldry. 

It was pretty magical for me to see in a bank office that was for the most part stark. It definitely left an impression on me that this institution loves animals, just like me, and is whimsical but also protective. 

Scotiabank no longer uses their coat of arms in their advertising. Bank branches try to exude modernity, clean lines, comfort but not too comfortable, simplified colour schemes and absolutely no whimsy. Maybe the coat of arms started to feel outdated or too reminiscent of the Royalty. Art demonstrates its power to convey lasting and strong messages. 

Toronto Dominion Gallery of Indigenous Art

Banks are not without art today. Downtown banks still impress with their vaulted ceilings, lofty architecture and sculpture and art galleries. The TD bank has an amazing public art gallery. I only found out about it when my oldest child attended a downtown daycare at the TD centre. The whimsy and magic of banks is readily found in some of the old head offices. Might be an unusual day trip idea but it’s worth a detour.

If you are interested to read about Bank Of America’s incredible art collection, I found an article about their curator, Allen Blevins, who definitely has an interesting job. 

Do you have a good early memory of banking?

Art should not be underestimated. It makes you feel things, it makes you think and it would be nice to see more of it at the bank branches. Maybe the head offices can arrange for artwork to be displayed at smaller branches. It might motivate me to visit more often. What is your earliest memory of banking? Did you have a bank account as a child? Did your parents talk to you about money? I think our early experiences with money and banking really influences our future relationship with finance. I hope your relationship with your money is a healthy one. 

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Saving and Investing is a Super Power

Saving and Investing is a Super Power

Money is a sensitive topic to talk about isn’t it, and unless you work in the financial sector it is a pretty awkward subject to bring up with just about anyone. Since no one really talks about it, it seems like maybe it’s not that important. I think that finding an interest in investing is truly a super power with all this secrecy going around. I know you have that super power in you. 

What makes it a super power is that it won’t reveal itself as a super power until later, much later. At first, when you start to save and invest you will feel powerless and it may even feel pointless. ‘Who cares I set aside $1000, that’s not a lot of money’, you’ll say. You may have it invested, and its market value could go down. ‘What’s the use!”, you’ll say to yourself each time you lose money. There will be many times when it will seem FUTILE. The super power happens when all those feelings of hopelessness are set aside and you continue to save and invest despite the mixed signals in the news and despite what your gut is telling you to do. It is a super power to keep on doing it because of the news telling you that “cash is king”, or that only real estate is a real investment because you can see it and touch it. Saving and investing in the stock market is a very abstract concept, and the ability to see its growth potential and imagine the effects of compounding is not easy. Let’s use the help of a compound interest calculator to help us see this super power in action.

Graph of our results from getsmarteraboutmoney.ca

Let’s assume you started working and after a year, you managed to save $500. You’ve opened a self-directed RRSP and have a bit of contribution room. You add $500 to your RRSP and for the next 40 years you add $500 every year. You are young and new to investing but heard that investing in a stock market index is a good idea because you basically own many companies at once. Perhaps you purchase an S&P500 ETF index every year with your $500. Your total cash investment after 40 years is $20,000. Many of you will not consider $500 a lot of money, it looks manageable doesn’t it? I’m sure you can do that and have the motivation to do even more. How much do you think you’ll have after 40 years of letting your money compound? We have to make some assumptions here however, we have to imagine that the stock market will return let’s say 7% on average for the next 40 years. If you are lucky enough to get a 7% return on your money, your $500 per year investment would turn into $105,902.58. Isn’t that amazing?

Take the time to play with this compound calculator and figure out how much you can save per year. Make sure to use money you can part with for decades. The best result is if you save more than less of course, and much depends on stock market returns (something you have no control over). Investopedia is a good resource to look up handy information about investing. I used a 7% return because “adjusted for inflation, the historical average annual return is only around 7%”. 

Venn Diagram of investing

After 40 years of saving and investing your stock portfolio can be chopped in half. I know, totally sucks! Let’s assume this happens but you are patient and will wait for a market recovery. According to Greg McBride: “Typically, it takes stocks an average of 121 days, or four months, to recover from a correction. If a downturn becomes a bear market, which is when stocks fall 20 percent or more from a high, it takes an average of 22 months, which is less than two years, to recover.Dec 19, 2018”  

You don’t have control over what the stock market hands you, I guess it is a huge leap of faith, one that I took many years ago and I’m not going to lie, it’s a crazy ride. As Morpheus said in the Matrix, “Free your mind”.