Why Your First Order Should Be Tiny
Most people who want to start investing don't freeze on the big questions. They freeze on the last small one - picking a fund and placing the order. They've read that low-cost index funds are the way to go, they've maybe even opened an account, and then they sit there with the buy screen open and don't pull the trigger.
It makes sense. What if you pick the wrong fund? What if you buy at the wrong time?
What helped me, and what I tell anyone who asks, was starting small. Put $5 or $10 in this week. Even if you somehow picked the "wrong" broad fund, that amount isn't going to change your life. What it does is get you over the hump and build the one skill that compounds, which is being someone who invests regularly and doesn't panic when the number moves.
And the number will move. You'll watch it drop one week and climb the next, and seeing that with real money, even ten bucks of it, teaches you more than a year of reading about volatility. You learn that a dip is normal and that you don't need to do anything about it. That lesson is hard to get any other way.
For where to do it, Wealthsimple and Questrade are two of the easiest platforms to start on in Canada. Personally, I use Wealthsimple for all my banking and investing and I think it's an outstanding platform. I'll add one honest caution. They've got a ton of great free tools, but lately they've been pushing options trading, crypto, and a few other things that can be a bit of a trap for a newer investor. They promote those because they need to make a profit somewhere, and they don't make it on low-cost index funds or zero-fee chequing accounts. Keep your guard up and stick to the simple stuff at first.
As for the fund, a one-ticket index fund like XEQT, a single fund that holds thousands of companies from around the world, keeps things simple. You don't need to get the choice perfect to begin (even though I think XEQT is near perfect depending on your situation). You can always learn more and adjust later. The people who do well aren't the ones who picked the perfect fund on day one. They're the ones who started, kept going, and left it alone.
I know many of you on Blossom have already taken the first jump and made the investment. You should be spreading this information around to others who may not have started investing yet. This is what I tell everyone I first talk to about investing. I don't push them to start big, and I don't push them into anything complex. Just starting the habit of investing is worth so much for them in the long term.
Do you guys try to encourage your friends and family to invest?
