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Investing for Market Beginners

"I like my money right where I can see it: hanging in my closet." Carry Bradshaw from "Sex in the City". Unfortunately, there are many Carry Bradshaw's in the real world and way too many followers who don't blaze their own trails when it comes to financial survival. Even today, Manola Blahnik's Mary Janes are history. Fashion is fashion. What it's not is an investment. As Ralph Lauren once said: "Fashion is over quickly. Style lasts forever. This blog is about getting and attaining your "Financial Style" and how to make it last forever!

Series 1 - INVESTING:

Investing is different than savings or stock trading. So, it’s important to understand the lingo associated with investing. Investing is usually for the long term with goals in mind as opposed to trading which usually pertains to short term in and outs of different stocks and is much riskier especially if you are just starting out. Savings is considered less risky but the returns (which is the % earned on your money) is not advantageous for long term goal achievements. “INFLATION WILL ALWAYS OUTPACE INTEREST RATES” – especially after taxes. Investing in interest bearing instruments, is saving on the one hand while the other throws it away! It’s my opinion that saving and earning fixed rate interest (%) is the riskiest venture in the long run.


Let’s look at the black clouds that must be annihilated before any initial financial progress can take place.

1. The biggest elephant in the room is DEBT! Whether its student’s loans or the ever popular 20% credit card, check this site "DEBT" and see if this is of any interest and can help you with this annihilation. Help is out there – you just need to know where to look.

2. “The Emergency Fund”. An emergency fund is mandatory money set aside because crap happens and the pandemic is a perfect example. How many people were caught off guard and had no income saved and eventually no place to hang their hat.

There are good apps on your phone, or set up a system to evaluate where you spend your money. The first helpful bit of information is to identify where you are actually spending your money and if it can be restructured. Knowledge can be shocking! My Visa has a built-in breakdown of where my $$$ go on a monthly basis. As everything is tap and go today – nothing escapes the card – it’s like a tracking device for expenditures! If you don’t have a credit card think of getting a ‘secured bank Visa' they will hold funds for the same equivalent as the credit provided. This will help build your credit rating and provide you with ID and purchasing power, especially if you are just starting out and you have debt.

Investing can only happen at the end of the month after all your bills are paid. It’s what’s left over. Set your goals, whether it’s a “newer” car, trip/vacation, education and/or a house, or a 30-year retirement plan. Your goal has to be front and center and logically attainable. Getting yourself overwhelmed is exactly what brings on inertia and results in doing something idiotic that can add to your debt.


You got some serious problems Lucy! That is why you should evaluate and make unpopular decisions. Kind of like suffer now for the longer benefit. Even if it is extreme adjustment like moving residences. I say this because as “The Wealthy Barber” once said: “Live below your means and live well”. Let’s face reality, you will never get anywhere if your expenditures are above your income. And also, if your income grows, this is not a license to increase your expenditures. Meet the challenge and don’t let the “lifestyle creep” eat you up. It might even help if you use a “spare change app” like one from Wealth Simple or from Acorn. Sounds insignificant but you will be surprised how much it adds up at the end of the month. It’s almost like using what is termed “Dollar Cost Averaging”. (we’ll discuss how this works in the next blog)


1. Invest using a spare change app

2. Start auto transfers from your bank account on the days you get paid.

3. Pay attention of Lifestyle Creep – brew your own coffee. Starbucks isn’t that great!

4. Invest any raises you get and maintain your current expenditures – keep YOUR lifestyle

5. Ask for all gifts to be monetary and explain what you are doing – it may be catchy!

6. Getting money back in taxes – invest it – remember you didn’t have it yesterday!

7. Emergency fund – TFSA (Tax Free Savings Account). (we’ll discuss how this works later)

Even with the above – timelines are different for what all your needs are. You are not investing for a car you want to buy 30 years from now. The car is short term and retirement is long term. This is when we want to discuss RISK!


How much do you think you can afford to lose? There are questionnaires that are provided to explain where the boundaries of your “risk horizon” falls within. For example, if you need to use your money to pay the rent – your risk factor is extremely low, but if your life wouldn’t be affected materially in any way if you set the money on fire then your risk factor would actually be skyrocketing!

TFSA: (Canada)

These accounts I mentioned previously – are accounts similar to an Registered Retirement Savings Accounts (RRSP) which are also “governed by the government’. You can save a limited amount of money, as it accumulates in value, the gain is not taxed and you can remove the money without tax consequences. There is a little more to it which will be covered in the next series. It’s a great way to save for a rainy day outside the clutches of government taxation.


It’s all about diversity!


What diversity means is you are not zeroing in on one investment and if it goes south --- you lose! Diversity helps you mitigate your risk factor. No one sector can be number one in performance all the time. And guess what: No one knows which sector is going to do well and which one isn’t. Not even the esteemed Mr. Buffet has that much power!

Picking different investments from different geographies, industries and asset classes (stocks, bonds, real estate etc) affords you the opportunities to gain from investments that are trending up while supporting others that are going soft. Having many investments that are uncorrelated with one another, smooths out your portfolio returns. This helps greatly because fluctuations can bring on a volcano of emotions. Having an advisor who is keen on the market will be right there to hold your hand and explain what is happening. This all sound quite difficult and I am here to say that it is. The alternative of jumping in and jumping out of the market – because you are listening to the news, friends, little green men.


We look at investing from two angles. Hiring an Investment Advisor which I spoke about in my former blog: "Women, Wealth and Oxygen!" And an alternative of using an automated investment on-line service like Wealth Simple, Acorn or M1 Financial. These services are not for established investors, business owners who have multiple financial issues a seasoned Financial Advisor could help with. Like IPP's or RCA’s. When you are starting out with investing: “keep is simple” but once you have established yourself – time for step two. There are a multitude of financial institutes that want to keep you in the dark - like a mushroom. Simply because they don’t have the ability to provide a higher level of product and services like wealth management/planning, tax minimization, estate planning and terminal tax liability (a smorgasbord of other services). It can be an industry behavioral issues. Which is why guidance and understanding is so important.

Next on our Path: Investing for the Long Term, FEES and 4%!

Disclosure: I have been in business for most my life, having owned small companies like Secret Victoria, a children’s event company to an Interior Design company in Toronto, Ontario. I started with a Master’s in English Lit and minor degrees in “Psychology of Business” and “Economics”. As a former Bank Manager and recent CFO of my husband’s Financial Company, I look at finance from an eagle’s nest! I am not a professional Financial Advisor and I give no advice in this article for you to follow. I am hoping you will find some opportunities that will spark an interest that you can delve into and get started on your journey to independence! One more disclosure - my husband Doug McCaw: is a Portfolio Manager in Ontario with CIPW - A High Net Worth private wealth company under the CI Financial umbrella

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