Presented by iShares by BlackRock
Investing your money in the stock market is likely one of those things you know you *should* be doing, but aren’t sure where to begin. Here are some easy tips on how to get started—and hopefully cash in on serious bank one day.
Investing means using your money to make more money. When you purchase an investment, you do so with the intention of it generating a return by appreciating in value, producing income, or both.
Why you need to invest
Most savings accounts return only 1% interest—if you’re lucky! So it could be a while before you can, say, save for a down payment on your first place or take that long vacation you’ve been dreaming of. Whether you’re striving for home ownership, early retirement, or just want to have more money in the bank, investing is a smart way to get there comfortably.
How to invest with $1,000
One of the most common reasons young people cite for not investing is that they feel intimidated by the stock market. With all the financial acronyms and charts to watch, it’s easy to see why millennials get overwhelmed by the prospect of putting their hard-earned cash there. But jump-starting your financial #goals really isn’t all that hard.
To start investing, you need to open a brokerage account. It’s different from a regular bank account and is what allows you to access the stock market. Some of the major banks in Canada have their own brokerages, but you can also choose an independent discount brokerage online. You’ll need at least $1,000 to open a brokerage account, and you can begin making trades right away.
Set yourself up for long-term $$$ in a few minutes
When it comes to choosing and managing your investments, you want to keep it as simple and hassle-free as possible. Instead of worrying about doing tons of research and picking individual stocks, you can create a well-diversified, profitable portfolio by purchasing low-cost ETFs (a.k.a. “Exchange Traded Funds”). This is a type of investment vehicle that contains a number of related investments and trades on the stock market like a single stock. For example, an ETF might contain stocks that represent the U.S. or global stock market, or related by industry, like oil and gas, or consumer goods. An ETF can contain anywhere from a handful to over 100 different stocks. When you buy one share of an ETF, you’re actually buying a small piece of every stock within the ETF. This is why ETFs are such a great way to diversify your portfolio—you can access the stock market at a fraction of the cost! Learn more about how to choose ETFs for your investment portfolio on my blog, Money After Graduation and YouTube channel.
Maximize your investment
To get the most out of your investments, open your brokerage account as a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP). You might think from the names of these investment vehicles that they have to be savings accounts but that’s not the case. By opening a brokerage account under the TFSA or RRSP umbrellas, you can shelter your investment earnings from taxes, further increasing your returns. It’s time to start investing in your financial future.
“Giant Eye-Roll”: We Asked a Money Pro About that Avocado Toast Advice
Want to Buy a Home Now That the Market’s Less Nuts? Do This First
Four Financial Whizzes on How to Get Your $$$hizz Together in 2017