Investing in the stock market has always baffled me to no end. Add onto that the dilemma of whether to start investing while I have debt and we have another ball of wax entirely. It has been debated by many a personal finance expert that the returns you achieve may never outweigh what you’re paying in interest on your debt. While I do not disagree with this premise, I figure that if I’m “paying myself first” and saving a bit of money while in debt, it deserves to earn more than a measly 1.75% stuck in a TFSA somewhere.
Am I right?
And with that, I dove off the highest diving platform, straight into Questrade and I now own two shiny new stocks. Okay, they are not new companies, they’re just new to me and I could not be happier. I was actually giddy; it was somewhat disgusting to witness. On the other hand, it was a welcome change to be uber happy about growing my money. #tideshaveturned
I am the proud new owner of Canadian Oil Sands and Brookfield Energy.
Why Would I Dive in to Investing even with Debt?
The answer is simple, I want my money to grow faster and I’d like some dividends along the way. I am also paying myself first and am investing my home down payment savings. With Oil, Gas and Energy stocks recently plummeting, what better time to get in? Exactly. Yes, it may seem illogical to be investing my home down payment in the stock market, but realistically I have a long way to go and a few extra multipliers along the way won’t hurt.
The best point of all: if I never get started, I will never get started. Make sense? Good.
Why Did it Take so Long?
You would think that at 38 years of age, I would be invested in more than mutual funds and GICs, wouldn’t you? Yea, I know, proceed with eye rolling now. Here’s the thing, not everyone is ready to invest or in my case, I had no real aspirations to play the stock market and I thought it would be time consuming and a losing venture. Let’s say we deal with those two rather silly misconceptions right now.
- Time Consuming – We can dispel with this one right now with one name. Warren Buffett. If anyone preaches buy and hold, it’s him. There’s no need to be jumping in and out of stocks like you change your underwear, and it will be detrimental to your health if you sit and watch the stock ticker all day every day.
- Losing – As the masses say, without risk there is no reward. Of course, adverse risk should be avoided, which means I will not be investing in penny stocks anytime soon. I am looking for strength and value.
The biggest risk with investing is in not learning first what you need to know and to keep learning along the way.
What a Beginner Investor Like Me Would Tell You
Start small. I started with only $1000 and that is all I’m investing at this point.
Learn at least the basics before you jump in. Don’t get all Warren Buffet or Dr. Evil like and think you are going to dominate the world and be a billionaire in 10 minutes. I started out with reading Moneysense’s Guide to Investing in the Stock Market and by tracking stocks for two months.
Save on fees. After your first investment, you may get trigger-happy and want to keep investing in dribs and drabs. My plan is to save as much as I can and invest each quarter from my “pay yourself first” savings. Another tip: Search the Googleverse for referral codes from bloggers, banks, and investment firms; often you can find a “50 free trades” code that you can use.