Investing 101

The best time for you to invest is yesterday but the second best time for you to invest is today. If you are 20 it would have been better to get into investing at 18. 20 is still a lot better than 25. 25 is a lot better than 30. By investing today you’ll have the effects of compound interest on your side. Compound interest is the interest you earn on interest (confusing right). Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” 

Investing can be a scary world to go into. One quick search on youtube and you’ll hear all types of terms such as dividends, ROI, P/E, bear, bull, the list goes on. Trying to figure this all out will have you pulling out your hair and screaming.


One thing we have to get out of the way is investing doesn’t have to be about picking out stocks. You don’t have to pick the next amazon to have your money work for you. Let’s go through the process step by step. 

  • Opening a brokerage account
  • Making your first purchase
  • Checking in

Opening  a Brokerage Account

A brokerage account is a fancy way of saying an account for buying and selling a variety of investments. You can usually open these through your bank or an independent online broker. If you’re wanting to stick with a bank I would go with Scotia Itrade or TD Ameritrade.

Scotia Itrade


  • No fees for purchasing mutual funds.
  • Fees for equities and Options can go as low as $4.99 for active traders (at least 150 trades per quarter).
  • Ability to create practice accounts to learn how to invest risk-free.
  • Access to comprehensive market analytics. 
  • Special offers for newcomers to Canada (up to 10 free trades) and young investors (up to $200 in annual reimbursements on administration fees).
  • No minimum investment.
  • Special incentives for those who already bank with Scotia (Ultimate Package holders receive 10-5 free trades per year; approximately worth up to $100 in value).
  • Get access to Scotiabank’s in-depth research capabilities

The Cons

  • There is a low activity fee of $25 charged per quarter.
  • Annual account fees start from $25 (for RESPs) to $100 (for RRSPs, RRIFs, LIRAs, and LIFs).ar, have at least $25,000 in investments, or are under the age of 26.
  • At a flat $9.99 fee on most trades (under 150 per quarter), there are cheaper options offered by alternative discount brokerages.

TD Ameritrade


  • Commission-free stock, ETF and options trades.
  • Free research.
  • High-quality trading platforms.
  • No account minimum.
  • Good customer support.
  • Large investment selection.


  • No fractional shares

If you want to go with an independent online broker I would recommend Wealthsimple or Questrade. 



  • No annual or quarterly administrative account fees.
  • No fees for buying ETFs.
  • Low trading fees: $0.01 per share (minimum of $4.95 up to a maximum of $9.95 per trade for most investment types).
  • Huge range of investment options including: ETFs, stocks, mutual funds, IPOs, bonds, GICs, Options, forex and CFDs, precious metals, and more.
  • Great online and mobile app experience. 
  • No inactivity fee.
  • Option to upgrade to Enhanced and Advanced accounts that offer more sophisticated investment tools for active day traders and seasoned investors.
  • Easy sign-up process and up to $150 in rebates for transfer fees when switching to Questrade.


  • Minimum investment amount of $1,000.
  • Unlike most other brokerages, there are fees for buying mutual funds.



  • New account holders can get a $25 cash bonus.
  • No commissions on trades is an absolute game changer.
  • Sleek and easy-to-use mobile experience.
  • No accounts minimums, annual administrative fee, or withdrawal fees.
  • RRSP and TFSA account options available.
  • New features coming down the pipeline including notifications when stock prices move and news on which stock to follow.


  • Can only trade ETFs and stocks. 
  • Can’t avoid the 1.5% foreign exchange fee by leveraging Norbert’s Gambit when trading U.S. stocks.
  • Exclusively available as a mobile app.
  • Lack of any tools, investment analytics, or educational content.
  • New deposits can take up to 3 days to process.

I personally trade with Questrade for their low trading fees and zero administration fees. I have also found their platform to be easily manoeuvrable and understandable. Opening any of the brokerage accounts listed above is a good place to start and you can compare them to choose to one that best suites you..

Once you have decided who you are signing up with you’ll open a Tax Free Savings Account (TFSA). This account will allow you to set money aside to invest tax free. You can invest and watch your money grow, collect dividends and reinvest all without having to pay tax! This account had an annual contribution limit of $6000 in 2020. If you do not utilize that amount in any given year it rolls over to the following year. If you go over that amount you are taxed on the amount of money over your limit. 

Making Your First Purchase

When I said you didn’t have to pick stocks to have your money work for you I meant it. The stock market returns an average of 10% a year. By investing in the S&P 500 or NASDAQ (the two major stock markets in the US) through index funds or ETFS’s  you can double your money approximately every 7 years. 

If you have complicated finances I would recommend an investment advisor but they aren’t always necessary. In reality many investment advisors can’t beat the market or pick stocks any better than you can if you are informed. CNBC reported in 2019 that the majority of active traders trailed the S&P 500 for the 9th year in a row. 

Investment advisors also take a portion of your profits for doing worse than you could have usually around 1%. The difference is that 10% is significantly greater than 9% in the long run. A 10% return on $100,000 is $10,000 while a 9% return is $9000. It only gets worse as the amounts get larger and compound interest starts to exponentially grow your money. 

Investing in diversified index portfolios such as:

  • Vanguard Total Stock Market Index Fund (VTSMX)
  • Vanguard Total International Stock Index Fund (VGTSX)
  • Vanguard Total Bond Market Fund (VBMFX)

You will have a great start in your investing career. By investing $1,200 this year ($100/month) in 10 years you would have $3,248 for doing nothing except letting it grow!

Now lets scale it up. 

$12,000 dollars this year at a 10% return. In 25 years you’ll have. $144,683.33

Checking in

After making your initial investment it is important to let the money sit and accumulate over time with monthly additions. It doesnt matter if you add $50 a month or $200 it is about building that habit of continually adding to your investments. 

Refrain from checking your account every day, there will be days your portfolio drops 1%,5%,10% and there will be days you go up the same amount. Stick through the hills and valleys and everything will be fine. 

In a later blog we will talk about how you can adjust your portfolio in order to have it properly diversified to decrease risk. 

The information I provide in my blog is only my opinion and I encourage you to do your own research before beginning to invest. 

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