Frequently Asked Questions

Course

How do I complete the course and how long will it take?

Do I have to complete the modules in sequential order?

Can I email or speak with the McGill professor?

How do I add my McGill Personal Finance Essentials attestation of completion to my LinkedIn profile?

Can I speak with someone about the course by phone?

How do I change the language of the course?

Module 1: Introduction to Personal Finance

In financial planning, why is it important to keep in mind both “present you” and “future you”?

How long does the average Canadian live?

Why is it important to start your financial planning early or as soon as possible?

What is the Canadian household debt-to-income ratio?

What is inflation?

What does risk tolerance mean in the context of investing?

Where can I find information about choosing a financial advisor?

Module 2: Budgeting and Saving

What is the benefit of creating a budget?

Does a budget reflect a current financial situation – or a future outlook?

Is it necessary to involve other people when creating a budget?

What are some expenditures to include in a budget?

What is a budget surplus?

What is a budget deficit?

Is there a template or tool that can help create a budget?

Does everything need to go into a budget – even a daily cup of coffee?

Can someone who doesn’t earn a steady income still create and follow a budget?

Module 3: Your Money: Today and Tomorrow

What is compound interest?

Is it a smarter financial decision to take $100 today or $100 tomorrow?

What is compounding frequency?

What does time value of money mean?

What is discounting?

Is the future value of money greater than present value?

Why might it be better to save $50 twice a month than $100 once at the end of the month?

Module 4: Understanding Debt and Borrowing

Is it more likely someone would pay more interest using a credit card or a line of credit?

What are the advantages of a fixed-rate mortgage and variable-rate mortgage?

What is the difference between a credit score and credit history?

How does using a credit card improve a credit score?

Why would someone declare bankruptcy?

What does cost of borrowing mean?

What’s the difference between a secured and unsecured line of credit?

When would someone use a credit card or line of credit?

How does a bank determine what the credit limit of a credit card will be?

What is mortgage loan insurance?

Module 5: The Art of Investing

What’s the difference between stocks and bonds?

Who is Warren Buffett?

What is a GIC?

What’s the difference between a “bull” and “bear” market?

Why should investors consider diversifying investments instead of picking one or two stocks to invest in?

Is it safe to invest in the stock market? What if it crashes again?

What is a mutual fund?

Why is it important to watch out for investment expenses?

What’s an investment portfolio?

Module 6: Retirement Planning

Which public or government-sponsored pensions exist in Canada?

What is an employer-sponsored pension plan?

What are the advantages of a TFSA compared with an RRSP?

What is an example of a tax-deferred account?

What is an example of a tax-free account?

Is it generally a better financial decision to pay down debt or invest?

Can you put as much money as you want in an RRSP or TFSA?

What happens if an investor goes over their contribution limit for their TFSA one year?

Can a TFSA be used to save for retirement?

Module 7: The Realities of Real Estate

What is real estate?

What are some of the benefits of investing in real estate?

Are there risks involved with purchasing real estate?

Which factors affect the price of real estate?

What are some other costs besides the purchase price of a property to keep in mind?

Are there any guidelines about how much you should spend on your housing costs?

Assuming you can afford it, is it always better to buy than rent?

Is it a good idea to buy a property for investment purposes and rent it out?

How can someone invest in real estate if they don’t have the money to buy a house or condo?

Module 8: Behavioural Finance

What is behavioural finance?

What affects how much risk an investor is comfortable with?

What is “conservatism bias”?

What is “representativeness”?

What is the “disposition effect”?

Why do riskier investments tend to provide a greater return?

Is it normal to be afraid of taking financial risks?

What does “post-earnings announcement drift” mean?

Are wealthy investors typically more comfortable with risk?