Investing for Beginners: Everything You Need to Know To Get Started

“How much money do you have invested in your equity funds?”

[Insert blank stare]

“Umm….equity….what???”

Yeahhh, I’m pretty sure most of us don’t frequently chat about equity funds, financial portfolios and asset allocation. In fact, I’d be willing to guess that most young people don’t even know what those words mean!

I hope I haven’t lost you. Please keep reading! 😉

Talking about investing and finances isn’t a glamorous topic, but that doesn’t mean it’s not an important one. And no, buying a Chanel bag as an “investment piece” does not count!

I would just like to add a disclaimer that investing your money can be risky if you aren’t financially secure. You need enough money saved up that if you lose some, it won’t be a disaster for you. Plus a good credit score is also beneficial because it shows you’re good with money. If you don’t have any credit history, do some research for the best credit cards with no credit before you start investing.

As you would know from my post about making the most of your money, despite the fact that I’m a spender, I’m also a saver. I don’t necessarily know what I’m saving for, but I do it because I know it’s the responsible way to prepare for the future. It’s why I set up some investments a few years ago…even though I didn’t really know what that meant.

Last week, I was invited to an event about Investing at BrainStation, hosted by Tangerine Bank. It wasn’t the typical “blogger event” by any means, but that didn’t mean I was any less interested in attending. I knew it was the perfect opportunity to (finally) learn a thing or two about investing. Unlike other blogging events, this one was also open to the public – and was completely free!

The evening began with a short presentation, led by financial experts Preet Banerjee and Kelley Keehn. Their presentation covered the basics of investing, the common barriers to getting started and how to navigate investments as a whole as well find the best way to invest. They kept things interesting and easy to understand by relating investing to dating and relationships. You know, because it’s Valentine’s Month! I also loved that their presentation was targeted to a millennial audience. But that is not to say that the older generations cannot get involved in the investment. In fact, some might be concerned about the money needed to get involved in this, especially whilst having concerns about retirement. Fortunately, they can seek the advice of a retirement financial planner like Key to help them decide if it is right for them.

After such a fun and informative night, I’m thrilled to be working with Tangerine Bank again. My hope is to inspire at least one person to start a conversation with a financial advisor, who can help get you set up with a plan. It wouldn’t hurt to spread your investments though, a friend told me that to buy bitcoin while it is low is a good idea but do some research for yourself to figure it out.

Here’s some of my key takeaways that I wanted to share with you. Investing for beginners, if you will.

Investing 101:

Why should you invest your money? In hopes of a higher return.

Investing your money can allow you to grow it over the long-term.

If you have any significant amount of money sitting in your savings account, it is not invested in anything. This hard-earned cash is earning you less than 1% interest, which unfortunately, is nothing. At that rate, you can’t even keep up with inflation!

That’s not to say that you shouldn’t keep any money in your savings account. You should still have cash that you can easily access, to cover emergencies or short-term spending goals (like that next vacation).

Investing will always come with risk. The higher the potential return on your investment, the higher the risk.

When it comes to determining how and where to invest your money…talk to a professional! When you initially meet with an investment expert, he or she will ask you a number of questions that will help determine the best way to allocate your assets and how much risk you should take. It’s their job to build an investment portfolio that will best suit your needs, time horizon, personality type and overall financial goals.

When it comes to Investing, Think Long-Term:

One of the biggest things to consider when investing your money is your time horizon. When do you plan to take your money out?

The odds are, we’re talking retirement. As millennials, we have many, many years left before retirement (sighhh), but now is the time we need to start planning. In the financial world, when professionals talk about “long-term”, they mean 25 or 30 years…not 5 or 10.

Investing and Relationships:

The second half of the presentation was all about investing and relationships.

Can you believe that nearly 4/10 Canadians have lied to a romantic partner about money? I thought that sounded high, but maybe it’s because I don’t see a reason to lie about my spending habits?

Important Takeaway: You need to be on the same page financially as your partner.

Obviously, on a first date, you’re not going to discuss personal finances…but it’s a topic that will come up in a longer-term relationship. If you don’t share certain financial values and goals, it will likely cause friction with your partner.

What if you’re looking to save for a home in the next few years, but your boyfriend wants to spend a year abroad? Or, what if he has a ton of credit card debt and no savings to his name? Naturally, there’s going to be some issues with that relationship! It doesn’t necessarily mean you’re doomed to break up, but just be prepared for potential conflict.

I’d never really thought about this before, but I think one of the reasons that Matt and I are compatible is because we share similar views on finances. The types of things we spend our money on might differ, but at the end of the day, we both love to spend and save money.

When Should You Start Investing?

This is one of the biggest questions that people have about investing. Is there a minimum amount of money that you should have before you set up an appointment with an investment expert? At what age should you start planning for retirement?

The simplest answer is – start investing your money when you are out of debt. If you’re still paying off your student loan or struggling to pay back credit card debt, it’s probably not the right time to set up investments. But, if you’re out of debt, your money belongs to you. Get it working for you!

If you’re not sure where or how to begin, the best thing you can possibly do is ask. Jot down a few questions and ask an expert!

This post has been sponsored by Tangerine Bank. As always, all opinions are my own.

See Also:
How to Make the Most of Your Money