The Most Important Thing for Beginner Investors (In My Opinion Anyways)

This post is a paid collaboration with Tangerine, but all opinions are my own.

I’ve been investing my money in the stock market for over four years now, which both seems like a Very Long Time and no time at all.

Over those four years, I’ve written a lot about it, but even that only scratches the surface, because investing is one of those really complex topics you could study for a decade and still learn something new every day.

That’s one of the main reasons it can seem so intimidating before you start—it feels like you should do that decade of research first, because it’s such an important and complex topic. 

But if there’s one thing I know for sure based on my experience investing, it’s this: investing is better than not investing. 

Of course, since personal finance is never that simple, there are some caveats, but if you’re thinking about starting to invest there’s never, ever going to be a better time than today.

I waited too long to start investing

I’ve known that a low-cost investing strategy that tries to match the market, not beat it, was the right fit for me since—I am not kidding here—high school. I’m in my 30s. That’s why a four-year investing history doesn’t feel that long to me: I could have started much earlier than I did.

My mom left copies of MoneySense magazine around the house while I was in high school, and like the deeply nerdy person I am (hi, I write about money for fun) I read them cover to cover. They were always very clear that low-cost, simple investments that built you a diversified portfolio were the best fit for most people, and it made a lot of sense.

The thing that my teenaged (and then university-aged) brain skimmed over, however, was the how. How do I actually buy investments? Who does that for a person? 

That question tripped me up and stopping me from investing early in my career. 

Personal note to students, and those who give them money advice: I say career, because in my opinion, if you have extra money during university you’re probably better off keeping it in something liquid and accessible like a Tangerine High-Interest Savings Account. Being a student is expensive, and as a general rule I’d give yourself a big ol’ pass on putting your money into the stock market until you have a regular income. 

These days, there are more options that are available to beginners that answer the “How??” question for you, but even with the most basic options, there’s a bit you’ll need to know to make the best choice as to where to make your first investments. 

What matters most when you’re starting?

So OK, you want to start investing. Of all of the things you could potentially know about your investments, what do you actually need to know and care about when you start?

Luckily, the answer is “not that much.” 

I am all for doing your research and learning as much as you want to and can about investing, but with a few guidelines you can avoid the biggest (and most expensive) mistakes a lot of people make when investing.

  1. You want diversified investments. The scariest part of investing, at least for me, was the fear that all of my money was just going to disappear. Luckily, there’s a great way to avoid that: invest in a lot of different types of things. Stocks, bonds, different companies, countries, industries… you name it. You don’t need to do this on your own, because a lot of great investment options exist to let you invest in “one thing” and get exposure to a wide range of different investments. Think things like mutual funds, index funds, and exchange-traded funds (ETFs). Each one will give you exposure to multiple different investments, depending on which ones are included in the fund, so you get the diversification without having to do all the legwork. 
  2. You want low costs. One of the most important things when it comes to investing is the fees you pay, because it’s something that you know for sure, and it’s largely within your control. You can never know what will happen with the stock market in the future, and past performance is not an indicator of future performance, so one of the best ways you can actually impact the amount of money you keep in your account is to choose lower-cost investments.

That’s pretty much it to start with. Following these two simple guidelines will give you a great place to start, and let you put your money into the market. Once you’ve done that, you can take some time to read up on options to get more advanced with your investments if you want—but the most important thing is that you start. 

How to start investing with Tangerine

One of the easiest ways to hit both of those early-investing goals (diversified and low-cost) is through Tangerine’s investment options. How easy? Clients can sign up online or over the phone within 5-10 minutes, about the time it takes to take out the trash or have a shower.

Tangerine offers five different investing options, each of which is a single investment that offers you diversification across different types of investments.

Each of the five gives you exposure to different types of investments based on your risk tolerance, and you can easily select one to invest in using a Tangerine investment account—which includes options like a TFSA and an RRSP. 

Related: Check out my full review of Tangerine for all the details on their investments.

It’s as easy as opening a new savings account online, and once you’re all set up, you can contribute automatically to your investments in the same way you do to savings. And the best part? The fees are only 1.07%. For an easy introduction to investing, and a diversified portfolio, that’s pretty good.

The most important thing is to start

Ideally, you’ll be investing for the better part of your working career, because it’s one of the best ways (over the long term) to grow your wealth. But that probably gives you decades of investing ahead of you, and you can use that time to learn and optimize your investments, your strategy, and your fees.

The tricky thing is, because investing is so important, it’s easy to fall into the trap of feeling like you need to learn more and choose the best strategy before you ever get started. Especially when you’re just starting with a small amount every month, the most important thing is to find a good, easy-to-implement strategy that works for you, and just start.

You’ll get to learn how you react to market fluctuations, and having some of your money in the market might be just the thing that gets you motivated to start learning more. And even if that never happens, if you started with a low-cost, diversified approach like a Tangerine fund, you’re already ahead of the game.

For more information and advice about investing, visit Tangerine’s Forward Thinking blog here