Get off the bench and into the game: Investing for beginners

April 23, 2025

Community Manager

Note: The information provided in this article is intended for general informational purposes only and should not be considered financial advice. Financial decisions should be made based on your individual circumstances and in consultation with a qualified financial professional.

If you find yourself struggling with how to start investing, you’re experiencing a dilemma that is shared by most Canadians. A recent Ipsos poll found that each year, only 48 percent of Canadians put money into investments, and just a small majority (56 percent) are comfortable investing their own money. In uncertain financial times, it’s understandable that new investors are often concerned that their lack of knowledge may lead to them losing money. But rest assured, by learning some simple investment tips, you may become comfortable dipping your toe in the investment waters without worrying that your savings will be washed away.

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Investing 101: Finding support to understand the basics
Getting some help up front can be an important first step to help bridge the knowledge gap that many beginner investors face. One of the biggest misconceptions that beginners have about investing is that they need to have a minimum amount of knowledge in order to effectively invest. If you have no financial or investing know-how, visit your local bank branch, where a financial advisor will review your savings goals with you, including your risk tolerance and savings time frames, and then guide you to the most appropriate investment for you. Having a face-to-face meeting with a reputable financial advisor allows you to engage in a conversation that is tailored to your specific financial situation and allows you to learn in a judgement-free environment.

” One of the most common mistakes for a beginner is allowing their fear of investing to stop them from doing anything at all ”

What are the most common mistakes beginners make and how can you avoid them?
One of the most common mistakes for a beginner is allowing their fear of investing to stop them from doing anything at all. Many individuals default to leaving their savings in a retail banking savings account that garners only a fraction of a percent of interest. Even if your savings goals are short term and you’re looking to put some additional money away in case of an emergency, you’re better off moving your money into a low-risk mutual fund where you’ll at least be earning some sort of interest that will compound over time. By taking a first step, even if it’s a small one, you can begin to understand the different options that are available to you and potentially grow your confidence to explore other strategies in the future.

What’s the smallest amount of money that I can invest?
Truth be told, there is no amount of money that is too small to invest. Many people grew up being taught that it’s best to save a certain percentage of their earnings, like 10 percent a month, but that isn’t always true. For many Canadians, personal budgets are simply too tight to make this commitment, but even a small amount can start to make a difference. If you were to put aside $20 a week, you’d accumulate over $1,000 in a year that can begin to grow over time, even if it’s simply moved into a low-risk mutual fund, for example.

What is a simple beginner investment strategy to get started?
When you consider where to start your investment journey, sometimes the simplest, time-tested strategies make the most sense. While flashy investments in emerging areas like cryptocurrency may seem attractive, they are also prone to risks that extend beyond the investment itself. According to the Canadian Anti-Fraud Centre, crypto scams are commonplace in Canada, accounting for several hundred million dollars a year.

In consultation with a financial advisor, consider researching the benefits of a Registered Retirement Savings Plan (RRSP) or a Tax-Free Savings Account (TFSA). These options will allow you to not pay tax on any of your investment earnings (in the case of a TFSA) or defer paying taxes on the contributions and earnings until you’re in a lower income bracket later in life (in the case of an RRSP). If you’re looking to purchase your first home, you can also look into how RRSP savings can help facilitate the purchase of your first home by way of the Home Buyers’ Plan or explore a First Home Savings Account (FHSA).

Once you get past your initial fears, the pros far outweigh the cons when it comes to investing. Not only does investing allow your money to compound over time, it can also bring peace of mind. Knowing that you have a long-term plan for your money helps you prepare for the future and stay ahead of inflation, so your money doesn’t lose value over time. Give it a try, your future self will thank you for it.

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