Invest Now, Thank Me Later

Do you remember that guy from your lectures who would obnoxiously flex before class about how much he was investing? He was probably a mansplainer. He probably watched The Wolf Of Wall Street. Well ladies, we’re about to out-flex him. Here’s all you need to know to successfully multiply your money in the stock market.

Before you even think about investing, you need an emergency fund. You need money set aside for at least one month of living expenses in case your life gets uprooted tomorrow. You can then grow this to 3-6 months of funds. It’s also highly recommended you don’t start investing before you’ve repaid your debts. 

After that, you can start a retirement fund. In Canada, you can get a TFSA; this is an investing account where you won’t be taxed for what you gain. In the US, the equivalent would be a Roth IRA. Chat with your bank to figure out which account is best for you! 

So what’s a stock? It’s a tiny portion of a company you buy for a designated price, so when the company makes gains, you make gains alongside them too. The stock market fluctuates day to day, month to month, and year to year. That can be scary if you plan to invest for a short time period. But if you’re young, you can afford to take risks. Buy and hold your investments, let’s say for ten or more years, and the bumpy ride will ultimately reap you profits. 

What should you invest in? I personally like ETFs, which are a collection of stocks that allow you to automatically divide your money between numerous (hundreds) companies. They do this by using a formula to track the market and match the top performers. This lowers your risk of losing money! Imagine if you only invested in Zoom, their shares then dropped drastically after we reintroduce in-person meetings (fingers crossed we do?), and you consequently lose a large chunk of your money. If you spread out your money between various companies, a drop like that would be a much less drastic loss. 

So now that you know the terminology, let’s move your money. The first thing you need to do is define how much you want to make, and when you want to make that amount by. There are numerous online calculators that can help you do this, like TD’s Compound Interest Calculator. Punch in how much you can invest right now (AKA all the cash doing nothing in your bank account that’s not for an emergency fund or debt repayment), how much you can contribute monthly, and how many years you can save. If you start with $10K and invest $300 a month, you can make $25K in ten years. If you started five years later, you’d only make $7K by that same time. That’s why we start as soon as possible.

I’m not hearing enough young women talking about investing! This is publicly available knowledge anyone can apply to their life, then leave alone for the long term. It’s not as scary as it sounds either, I promise! This guide is just a starting point, so please do your own research. The most important thing you need to know about investing is that you can do it too. Good luck!