Learning about stocks and bonds and investing in them aren’t necessarily conducive to each other because one of those options doesn’t require you to put up any money. Safe to say that, as young people, we’re not necessarily swimming in it as a whole. I get it.
There’s a lot to learn, and getting to the point where you’re comfortable buying shares of investment funds on your own is a tall order once you’re tasked with delivering on it, even if you know a globally diversified stock portfolio has made about 7% per year over the last two decades.
It’s always difficult when you start from knowing nothing next to nothing about a subject, but I think there are common hurdles to getting invested that, once removed, should make the process of opening an RRSP/TFSA, choosing funds, buying them regularly, and selling them to fund your financial goals seem less daunting than it should.
Here’s what may be holding you back.
Investing is scary. To spell this out in a more specific way, the fact that stock prices go up and down every day, often with no discernible reason, makes the stock market seem like a less than ideal place to store money.
Here’s the antidote.
The global stock market fluctuates in the short term but goes up over long periods of time. The Canadian stock market alone has returned about 9% a year over the last 60 years and the U.S. market has returned close to 10% per year over its history. You can buy funds that own the global stock market, or a collection of stocks that replicates it, and pay a very cheap yearly fee as you add to it over the long term. The same goes for the global bond market.
The stock market feels like gambling. This is a thing people say. Mostly because there are plenty of people who use financial instruments as a way to make bets as opposed to invest. The nice thing here is you can choose to be an investor and ignore those rolling the dice with their dollars.
It’s gambling to buy shares of Shopify because you think it will beat estimated earnings for the upcoming quarter causing the stock to pop. But there’s no 20-year period in history in which owning a diversified stock portfolio has lost money. Stocks, as a whole, have a positive expected return. This a casino cannot say. Shopify could miss estimates, fall by 10%, and leave you wondering whether you should hold or sell.
Investing feels like it won’t make a difference to your quality of life. This one is 100% true in the present moment and for the foreseeable future. Why? Because it takes decades for investing to work, for the money you make to stack on top of itself and grow in spite of the normal daily fluctuations and pandemics and major shipping lane clogs we all have to deal with.
You’re not investing for who you are now, not completely anyway. It’s mostly for who you will be 20-30 years from now. Sure, there are financials goals you have now, things you want to make of your life that you need to save for. Your dreams are an essential reason to invest.
You also need to remember, though, how easy it is to forget how different you are from 16-year-old you. And I don’t mean this superficially. Your view of the world, of what has value and serves your purpose, has changed so much since then to the point of being unrecognizable.
I wanted to be in the NBA when I was sixteen. I report on Canadian business news now. The road between the two isn’t logical except to me and what lights me up inside and out, just like your journey.
What will the vibe be 10 years from now? Who knows. All I know is that I will probably want as much breathing room as possible whenever I decide I need a change, which will surely happen, change being the only constant on this rotating rock of ours. Investing regularly is how I guarantee that peace of mind.
Putting money away takes away from living in the present moment. Yes, this is technically true. Money invested is gratification delayed to get more out of that dollar at a later time. But there’s no black or white here. It’s a balancing act between enjoying yourself now and building toward getting yourself to a place where you don’t have to worry about money.
I like concerts and plays, weekend getaways, and patio brunches just as much as the next person. I’ve enjoyed my fair share of $20 plates of eggs and potatoes in good company and have no qualms about it at all. That hasn’t stopped me from saving half my income over the past three years to minimize the financial ups and downs that come with writing for a living.
If you need to maximize your dollars, as most people do, to give yourself the greatest chance at living with your version of dignity until you’re old and crusty, investing is your only option besides finding a job that pays you enough to not have to.
If you’re interested in getting started and learn best by reading, I have a short instructional e-book (scroll down to the last book on the page) for beginner investors.
There are also 30 past articles in this series you can peruse.
I’m also offering one-on-one investing chats to cover basic knowledge and equip you to invest on your own.
As always, feel free to drop any investing questions in the comments.
There’s nothing personal about people
Gatekeeping their lives
Even if you cried at their weddings
Looked after their cats
Shared meals at their tables
Because everything is personal
Like looking with your eyes
And sleeping when you’re tired
It’s what is called a universal lever
A free option you can call in
Soon as you find the strength to do yourself the favour
You don’t always have to choose the thinnest paperback
You can fan yourself out and play in caves where shadows don’t obfuscate the exit
You can see them again and prefer to save the effort of pushing through the crowd
Let the dog ears settle before you’re comfortable
With someone kissing on your mind again
The exchange rate from blinders to uninhibited senses is always favourable
Call that commitment instead
No more being stunned like cattle, the drive of genius displaced on people
Who will find the fine print in ride or die when it’s convenient
I could tell
All I’d get
Was the foyer of you
Took each other home like reference only volumes
To maybe feel moved enough by something
To want more of it
Light particles changing costumes
Two verses translated as DNA
Holy water from a pipette
Applied with any style of prim
To feel rosy with a scientist’s trust in empirical evidence
Tops in time-capsule technology
Poetry with other consumable options
Besides quiet splendor
Like ingestible glow
Draped over our particular frequencies
Of being in the world
The people you happen to love only return it in kind if you’re lucky
It takes a lot of effort to commit to getting that carried away
A willingness to face the terror of saying hello
And them saying it back
And engaging the reckoning you seek
Somewhere deep inside there beyond awareness
The infinite vulnerability of talk
That’s only small because it carries within
The promise of intention
Of future formation
The kind of story you have to gauge
By how far it lives off the ground
Lest you have to shrink each other
In your minds to who you were
The second before whoever
Decided to bail and move
In a different direction
All of it hinging on discretion
Your economy of language
Practiced poverty at hiding and deciding
Oblivious to new constituents
In your version of the good life
—Liked what you read? Grab a book.
A letter of forgiveness to my mind
Here on out to be referred to as you
Some days you think like a Windows loading icon
The one with six dots running in a circle counter clockwise
They disappear every other trip round
Reappearing at the next moment
Like a rejected teleportation request
Some thoughts come back to me like these dots
Like someone in the corner of my eye
An IG photo keeping closure from hardening
I forgive you for them all
I forgive you for how they bore
As in perforate
The depth they reach
Taps me back into the factory setting
Boundaries, self-care, self-love
How I was thrown into the world
Thoughts racing, hands shaking
Howling to make music
Of the hardships I’d endured
—Liked what you read? Grab a book.