The thought of investing your money in the stock market can be intimidating for many people. If you’re paying off debt, saving for a large purchase like a house, or have no idea how to get started, investing may seem like an unnecessary use of time and money.
According to Canadian finance writer Alyssa Davies of Mixed Up Money, everyone should be investing — and thanks to the wealth (pun intended) of personal finance content available through blogs and social media, it’s never been easier to educate yourself.
Why You Should Start Investing
It’s a critical part of taking control of your financial future and ensuring you achieve your goals.
“If you want to retire, or you want to build wealth, you should invest your money as early and as often as possible,” Davies says. “If you’re not investing money, it’s not growing.”
Why People are Afraid to Start Investing
According to Davies, the main reasons people avoid it are lack of knowledge, timing, and fear of losing money. But, in her mind, nothing should stop you: “Investing is about finding the strength to give yourself the opportunity to do something more powerful with your money.”
Davies says when it comes to timing, a lot of people are worried they’re too late to start, or they’re still young and don’t need to worry about it. But that’s the wrong attitude to take. “It’s never too late or too early to start investing,” she says.
It’s Important to Invest During Uncertain Times
As for a fear of losing money, she echoes advice from other finance experts in that it’s important to invest, even during uncertain times .
“If you’re going to invest responsibly, and you’re going to give yourself the time to understand what you’re investing in and use the tools that are available to you, the stock market is never going to crash and not rebound,” she says. “You don’t need to start jumping into riskier or trendier investments, just do what’s safe and conservative if you’re really uncomfortable. Once you do feel like you know more and you have that education piece, you can start to make some more aggressive investments.”
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How to Learn About Investing
With Mixed Up Money, Davies aims to create a safe space for people to learn about investing through stories and examples that she says are more accessible than traditional advisors.
“There are so many tools at our fingertips and it’s really easy to learn the information that you want; it just takes time,” Davies says. “While education is important, you don’t need to know everything to start investing. The important part is that you are investing.”
How to Balance Financial Goals
Paying off debt and saving for a large purchase are important financial goals, but according to Davies, they should be balanced with investing, which is often used as a way to save for retirement.
“It’s a matter of prioritizing what to save for,” she says. “Sometimes you have to save for something else right now, but you should always be thinking about investing for your future. Even investing $20 a month is better than nothing.”
How to Get Started
Part of the education piece is knowing the risks there are with every type of investment that you open, who you’re investing with, and what type of fees there are. Davies personally uses and recommends robo-advisors for anyone who doesn’t have a lot of money to start out with or anyone who’s looking for hands-off investing without high fees. Retail investing is booming, and anyone with a small portfolio can participate.
For people who are a little bit more advanced with investing, she recommends opening a self-directed portfolio: “If that’s something you’re interested in, there are a ton of great courses and options for you to learn how to do that.”
