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If your goal for the new year is to start investing for your future but you’re not sure where to exactly start, you’re at the right place. Investing doesn’t have to be confusing or complicated. In fact, investing in your future is one of the best long-term moves you can make, especially if you’re a few decades from retirement.
While investing itself is simple once you get set up, it’s not always easy to know where to start. The amount of available investing information can be staggering, and you might easily find yourself sifting through ill-advised stock picks, unsolicited advice from family members, and market news that’s always full of drama.
Getting started early and investing often is the secret to a healthy retirement account. Plus, the power of compound interest — which can add a huge boost with a long investment horizon — can make your money work for you so it grows even as you sleep.
“You have to cut through the headlines,” advises Jill Fopiano, president & CEO at O’Brien Wealth Partners. “It’s easy to find conflicting articles about the same exact investments.”
Not sure where to get started? We’re here to clear that up for you. The best investment strategies are often the simplest. Let’s take a look at a few popular investment options for beginners.
Beginner Investing Strategy Overview
Before you start investing, it’s important to nail down a few things.
First, consider your budget and emergency savings. Experts recommend that you have about six months worth of expenses in a savings account put aside before you invest seriously in the market. However, if you have an employer-sponsored 401(k), it’s not a bad idea to at least begin contributing to it while building your emergency fund. That way you can still benefit from employer contribution matching. But get your emergency fund moving.
In most cases, it’s advisable to pay off high-interest debt before you start investing. Those with student loans or mortgages below 5% APR may want to chip away at their debt slowly while also investing in the stock market. However, personal loans and credit card balances with 10% APR or more should really be taken care of first, as any market gains will likely just be overshadowed by the interest on that debt.
After you have enough set aside in a rainy day fund, review your budget and invest as much as you feel comfortable doing (or can). Keep in mind, even $5 is enough to invest. Small, consistent amounts add up over time, and the most important thing is to be consistent and get started as soon as you can.
Understanding Investment Vehicles
401(k)s, Roth IRAs, and Traditional IRAs
In order to purchase any of the funds that are mentioned below, you need an investment vehicle to do so. This is where specific retirement accounts like an employee-sponsored 401(k) or Roth or Traditional IRA come in. Using a retirement account to purchase investments is an effective way to invest long-term. These accounts have tax advantages that allow your earnings to grow tax-free or tax-deferred for years.
Taxable brokerage accounts
Unlike a retirement account, which has specific tax advantages given you withdraw from it at the appropriate age (59 ½ is the earliest), a regular investment account where you can be taxed on gains and withdrawals is known as a brokerage account.
With a brokerage account, you can buy securities like stocks, bonds, and index funds. Unlike retirement accounts, there are no rules around how much you can contribute and when you can withdraw. Check out NextAdvisor’s list of the best online stock brokers to see the best options for low fees and good customer service.
1. Target Date Funds
Now that you’ve read about investment vehicles, it’s time to learn about the investments themselves. Experts love target date funds, and for good reason. Target date funds are a mix of stocks and bonds in a single fund that automatically become more conservative over time. Designed to mitigate risk the closer you get to retirement, target date funds often include a year in their name, such as “Target Date 2060 fund.” Employer-sponsored retirement plans commonly offer target date funds as investment options, since they allow employees to easily set it and forget it, so to speak.
“Target date funds provide a simple way to save for a defined date and time, and they offer access to a variety of markets,” says Fopiano. This is an advantage because you don’t have to choose individual stocks or do a lot of research.
Target date funds are a great place to get started if you want something easy. You can invest in one through your employee-sponsored 401(k) plan, a brokerage account, or through your individual Roth or traditional IRA.
In fact, millionaire investor and founder of Personal Finance Club told NextAdvisor that if he could redo his entire portfolio, he’d invest in a single target date fund.
“An index fund is an exciting and relatively safe way to make your first investment because it’s diversified, has lower fees, and exposes you to a big slice of the market with a single transaction,” says Melanie Mortimer, president at SIFMA Foundation, an industry trade group.
You can also start investing in index funds with small amounts of money. Fidelity, for instance, has no minimum required investment to buy shares of its Fidelity® ZERO Large Cap Index Fund or Fidelity® ZERO Extended Market Index Fund. Most major investment managers offer comparable funds that the average consumer can easily open with a low initial investment. NextAdvisor recommends low-cost, broad-market index funds as an excellent place to begin investing.
Like a target date fund, index funds can be purchased through a taxable brokerage account or through tax-advantaged retirement accounts, like your 401(k), or traditional or Roth IRA.
3. ETFs
An ETF is a type of security that tracks a particular index, sector, or commodity that you can buy and sell throughout the day just like a stock. Compared to mutual funds, which you can only trade once per day when the market closes, ETFs are traded on an exchange (hence the name).
Because of their tax efficiency, ETFs are also a great choice for taxable brokerage accounts.
How to Start Investing Today
If you need assistance in your investment portfolio, a robo-advisor can ask you a few questions about your risk tolerance and investment timeline to determine the best investments for you. Robo-advisors are used by most investors and are reliable. Once you know your risk tolerance, you’re ready to open an account. You can stick with a robo-advisor, or consider NextAdvisor’s list of best online brokers for a more traditional or self-guided option.
The Power of Consistency
Try to invest at regular intervals, such as every time you get paid. This strategy is known as dollar-cost-averaging, because contributing regularly over time will get you in the habit of investing. Simply focus on consistency. Some employers can even automatically deposit a portion of your paycheck to your investment account. When the money is in your account, be sure it’s not just sitting there.
Take the extra step to ensure it’s actually being invested. Depending on your account type, it’s not always enough to simply move money over. With many online brokers, you need to take the additional step of purchasing the stock or fund you want to invest in.
Pro Tip
For most investors, we recommend a low-cost, broad market index fund that tracks the total stock market or the S&P 500, which are available with most brokers and retirement plans.
Finally, check in every once in a while. “You don’t want to check it every day,” says Fopiano. “Markets go up and down, but if you have a long-term view, you can stomach the down markets.” It’s best to check to make sure your accounts are operating as expected, that dividends are paid (and being reinvested, if that’s what you want), and that your investments match your risk levels and future goals.
With consistency, time in the market, and investments you feel good about, you’ll be setting up your future self with plenty of cash when you’re ready to retire.
Losing a loved one is never easy, and the legal steps that follow can add even more stress to an already difficult time.
For years, families in Vancouver (and Canada in general) have struggled with a complex probate process—filled with paperwork and legal challenges.
Thankfully, recent changes to Canada’s probate laws aim to make this process simpler and easier to navigate.
Let’s unearth how these updates can simplify the process for you and your family.
What is probate?
Probate might sound complicated, but it’s simply the legal process of settling someone’s estate after death.
Here’s how it works.
Validating the will. The court checks if the will is legal and valid.
Appointing an executor. If named in the will, the executor manages the estate. If not, the court appoints someone.
Settling debts and taxes. The executor (and you) pays debts and taxes before anything can be given.
Distributing the estate. Once everything is settled, the executor distributes the remaining assets according to the will or legal rules.
Probate ensures everything is done by the book, giving you peace of mind during a difficult time.
Recent Changes in Canadian Probate Laws
Several updates to probate law in the country are making the process smoother for you and your family.
Here’s a closer look at the fundamental changes that are making a real difference.
1) Virtual witnessing of wills
Now permanent in many provinces, including British Columbia, wills can be signed and witnessed remotely through video calls.
Such a change makes estate planning more accessible, especially for those in remote areas or with limited mobility.
2) Simplified process for small estates
Smaller estates, like those under 25,000 CAD in BC, now have a faster, simplified probate process.
Fewer forms and legal steps mean less hassle for families handling modest estates.
3) Substantial compliance for wills
Courts can now approve wills with minor errors if they reflect the person’s true intentions.
This update prevents unnecessary legal challenges and ensures the deceased’s wishes are respected.
These changes help make probate less stressful and more efficient for you and other families across Canada.
The Probate Process and You: The Role of a Probate Lawyer
(Image: Freepik.com)
Working with a probate lawyer in Vancouver can significantly simplify the probate process, especially given the city’s complex legal landscape.
Here’s how they can help.
Navigating the legal process
Probate lawyers ensure all legal steps are followed, preventing costly mistakes and ensuring the estate is managed properly.
Handling paperwork and deadlines
They manage all the paperwork and court deadlines, taking the burden off of you during this difficult time.
Resolving disputes
If conflicts arise, probate lawyers resolve them, avoiding legal battles.
Providing you peace of mind
With a probate lawyer’s expertise, you can trust that the estate is being handled efficiently and according to the law.
With a skilled probate lawyer, you can ensure the entire process is smooth and stress-free.
Why These Changes Matter
The updates to probate law make a big difference for Canadian families. Here’s why.
Less stress for you. Simplified processes mean you can focus on grieving, not paperwork.
Faster estate settlements. Estates are settled more quickly, so beneficiaries don’t face long delays.
Fewer disputes. Courts can now honor will with minor errors, reducing family conflicts.
Accessible for everyone. Virtual witnessing and easier rules for small estates make probate more accessible for everyone, no matter where you live.
With these changes, probate becomes smoother and more manageable for you and your family.
How to Prepare for the Probate Process
Even with the recent changes, being prepared makes probate smoother. Here are a few steps to help you prepare.
Create a will. Ensure a valid will is in place to avoid complications.
Choose an executor. Pick someone responsible for managing the estate and discuss their role with them.
Organize documents. Keep key financial and legal documents in one place for easy access.
Talk to your family. Have open conversations with your family to prevent future misunderstandings.
Get legal advice. Consult with a probate lawyer to ensure everything is legally sound and up-to-date.
These simple steps make the probate process easier for everyone involved.
Wrapping Up: Making Probate Easier in Vancouver
Recent updates in probate law are simplifying the process for families, from virtual witnessing to easier estate rules. These reforms are designed to ease the burden, helping you focus on what matters—grieving and respecting your dead loved ones’ final wishes.
Despite these changes, it’s best to consult a probate lawyer to ensure you can manage everything properly. Remember, they’re here to help you during this difficult time.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
