10 Smart Ways to Put Your CAF Raise to Work
It’s not every day the government gives your finances a serious boost. But with new CAF raises and allowances, that’s exactly what’s happening. It’s a rare opportunity to level up your future if you use it wisely. Investing isn’t about chasing hot stocks or memorizing finance lingo—it’s about making responsible decisions with the money you’ve worked hard to earn.
Whether you’re brand new to investing or already watching the markets, here are 10 smart moves to help you invest with purpose, no matter your rank, posting, or experience level.
1. Start With Your “Why”
Before putting money anywhere, figure out why you’re investing. Do you want a down payment? Early release? Something set aside for a new car or big vacation? Your “why” will guide your decisions and help you avoid distractions, especially when the market gets noisy.
2. Know What Risk Really Means
It’s easy to think of investment risk as just “losing money.” But in reality, the bigger risk is not having the money you need, when you need it.
Let’s say you plan to buy a home in two years. If you invest that money in the stock market and the market dips right when your dream home hits the market, you might be forced to wait or miss out entirely. That’s short-term market risk.
Now imagine you’re 25 and saving to supplement your expected pension income, but you’re nervous about any risk, so you stick with ultra-safe options like GICs. The problem is these investments don’t grow very fast, they may not beat inflation, and you could reach retirement with less money than you need. That’s long-term shortfall risk.
The trick is to match the investment to the timeline. For shorter-term goals, play it safe. For longer-term goals, be more growth focused. A SISIP advisor can help make sure you’re balancing everything and managing risk wisely.
3. Make a Plan for Your Raise or Bonus
CAF pay increases and retention bonuses are a powerful opportunity to make real progress toward your goals. It’s easy to spend $10,000 on travel, a new vehicle, or a few lifestyle upgrades without even realizing it. But saving and investing that same amount takes real planning.
This is your moment to do just that. Since this money is new to your budget, you have a rare chance to make a clean, intentional decision. Directing even part of your raise or allowance into savings or investments is one of the most effective ways to take control of your financial future, without feeling like you’re giving something up.
Responsible decisions today can lead to greater freedom and options down the road. A SISIP advisor can help you build a gameplan that aligns with your goals and puts this new income to work, so you’re not just earning more, you’re building more too.
4. Invest Automatically
One of the smartest investing moves is also one of the simplest: set up automatic monthly contributions. Whether it’s $50 or $500 a month, consistency is what builds wealth over time.
Let’s say you automatically invest $275/month, the approximate raise for a Private. After 10 years at a realistic growth rate of 6.87%, you’d have nearly $47,000. Stay consistent for 20 years, and that grows to almost $140,000.
That’s the power of automatic investing. It removes decision fatigue and builds wealth quietly in the background.
SISIP mutual funds can be set up for automatic contributions right from your bank account. Whatever amount you choose, the key is to make it happen consistently and let the results compound from there.
5. Own Stocks, Especially When You're Young
When you buy a stock, you're buying a piece of a real company, like a bank, tech firm, or energy producer. If the company grows, your investment can grow too. Having a professional-managed portfolio of stocks is one of the most powerful long-term tools for building wealth.
Why start early? Because time matters more than timing. Let’s say you invest $5,000 at age 19 and never touch it again. At a 6.87% annual return, that investment could grow to over $76,000 by the time you’re 60. But if you wait until age 40 to invest that same $5,000, you’d only end up with around $19,000 by age 60. That’s roughly a $57,000 difference, all because of time.
And for many CAF members, it’s not just about profits. Whether you care about sustainability, social responsibility, or simply strong, ethical businesses, there are ways to align your investments with your values while still pursuing long-term growth.
6. Be Diversified
You don’t need to pick stocks or chase headlines. A professionally managed portfolio can give you access to different sectors, asset classes, and countries all in one place. This reduces the risk of having “all your eggs in one basket.”
If you do decide to dabble in the stock market, avoid betting too heavily on one sector, stock, or idea, even if it feels like a sure thing.
7. Understand the Tools in Your Toolbox
CAF members can access stocks and bonds through a wide array of fully diversified mutual funds, all of which may be held in a variety of account types, including:
- Tax-Free Savings Accounts (TFSAs)
- Registered Retirement Savings Plans (RRSPs)
- Registered Education Savings Plans (RESPs)
- Registered Disability Savings Plans (RDSPs)
- Locked-In Retirement Savings Plans (LRSPs)
- Non-registered (taxable accounts)
Each account type plays a different role. TFSAs are great for flexibility. RRSPs and LRSPs help you defer tax and save for retirement. RESPs and RDSPs earn valuables government grants. Non-registered accounts are ideal when you’ve already taken advantage of the others.
A SISIP Advisor can help you identify the best account for the job, whatever your goals may be.
8. Watch the Real Cost of Big Purchases
A new car or expensive move can feel urgent, but every big ticket item is money that won’t be invested and working for your future.
For example, if you’re planning to increase your car payment by $700 a month, run the numbers. At a 6.87% annual return, investing that $700 a month instead could grow to nearly $120,000 in 10 years. That’s the long-term cost of a short-term splurge (not to mention all the car loan interest you’ll save).
With new housing allowances part of the CAF pay package, you might be feeling a bit more breathing room. That doesn’t mean you need to spend it all. Even setting aside a small portion to invest can make a meaningful difference over time.
The key is pausing long enough to weigh your choices and making decisions that serve both today and tomorrow.
9. Own Your Timeline
Planning to buy a home during your next posting? Considering early release? Your investment plan should match your likely cash flow needs. Long-term money should be invested for growth. Short-term money should be accessible and stable. Knowing the difference can help you avoid being caught off guard by bad timing.
10. Ask Before You Act
There’s no shame in asking questions, especially before making a big financial decision. SISIP advisors work with CAF members all day, every day. They know the realities of postings, deployments, and military life. Use that to your advantage. You can always ask us for an objective second opinion.
All you need to get started is a rough idea of what you want to achieve. That’s where a conversation with a SISIP advisor can make all the difference. We’ll help you match your investments to your goals, use the right tools for your situation, and avoid common missteps, so you can make confident choices backed by expert, unbiased advice that’s tailored for CAF life.
Small wins matter. Find your delta between today's needs and tomorrow’s goals and employ the magic of compounding. It's available to you starting today.
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