Don't feel bad at all, man. You are far from alone. No point in beating yourself up about it. Sounds like you are ready to get started, which is a bigger step than a lot of people take.
Hopefully someone can offer you some good ideas that others can use as well.
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As Fuzz said, there's so many people in that exact situation that it's nothing to be embarrassed about. I'm working with a guy in his 60's that claims he has saved nothing because he was banking on a big inheritance that he didn't get. It's never too late to start but in his case he's really, really, really late.
15 years is approximately two doublings. You should be able to turn that $20k into $80k. Add in $10k/year, that is worth about $300k in 15 years, and next thing you know you've got $380k.
Don't we all wish we started sooner! 15 years left till retirement is still better than 15 days, so good on you for getting on it no matter what.
What I would do:
1. Stick that 20K into a couple of index funds. It's probably not enough for most good advisory firms to take you on, or for you to start any trading, so best to just keep it simple. #1 rule is to not lose money, so don't get desperate/cute with it.
2. Do what you can to try to raise your stake to 100K. New job, side gig, sell some assets, move to a cheaper place etc. Make sacrifices for the next few years. Once you get there, you start to see real benefits from compounding.
3. Consider finding a sugar mama/daddy (either one, you're not in a position to be picky).
Last edited by Table 5; 12-03-2025 at 11:43 AM.
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Probably worth at least setting up a TFSA for those index funds. RRSP might make sense depending on income and tax situation, but if you just want to get started, TFSA and you can figure the RRSP option later. If you are DIY on this, Questwealth and Wealthsimple are two big Canadian options.
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I'm one of those people who haven't saved anything for retirement. I'm at the point where I don't plan on retiring simply due to not being able to afford it and time to a retirement age being short (less than 15 years). That being said, I do have about $20K that I need to invest to help with my expected slowdown as I age. I just have no idea how to invest any of it and am quite frankly embarrassed to ask. How do I go about investing in something with safe returns? No admonishment please as writing this post was hard enough.
*Shrugs* Better late than never. Don't worry about it. My suggestion (one of many correct or incorrect options out there for YOU) for a reasonable baseline is to buy a major bank stock and just sit on it. RY/TD/NA/CM/BMO are the ones I'd suggest if you want to go blindly for it.
I assume you're self investing. When trading, always look at the market numbers and set the price. I don't recommend buying at market just in case there's funny price blips that may not be in your favor up to a few percent. Stay away from options. For your situation, probably top up your TFSA an invest in there to be tax efficient always before any other investment vehicle (RRSP, non-registered etc.). Keep in mind if you need cash fast, a sold investment may take up to 5-8 business days to clear before you can move the cash from the trading account/buy a new stock with that "cash in your account". Make sure to set up a back up plan for LOC and other means for short term cash or make sure you sell in advance of needing the cash so you can access the cash when you need it. Understand your cashflow and how investments work with cashflow instead of focusing on net worth.
Don't let your mood go up and down with the stock market. But also, figure out when is "enough". I know people who have $1-2 million in liquid investments in their 60-70s and they're all freaking out they don't have enough. I'm like... that's basically inter generational wealth numbers.
15 years is a long time. A steady investment is easily 200-300% potential rate of return over 15 years. Using the rule of 72, at 4% rate of return such as a GIC, you double your money in about 19.5 years. 5% rate of return, 14.4 years.
Reasoning
Spoiler!
It's easy enough with a bank stock to set and forget and continue not knowing what you're doing. It's useful to get skin in the game and an easy industry to understand how the stock works and why it has value. It has mechanics of stock fluctuation and dividends. It's not insane risk without overly limiting your potential gain. Most people feel nickel and dimed by these institutions, so get them to pay you overall vs you pay them. It's an institution that has been around for hundreds of years should outlive us all and will adapt to do so. Rate of return wise, you're hoping to double your money at a reasonable 5% rate of return. Many big banks give 2-3% dividends per year and that's fixed, regardless of what the stock price is. You don't need much for the extra gain on the bank's stock value to get that average 5% average rate of return and will likely exceed the 5%. I think a bank stock doubles every 8-10 years, so perhaps an overall rate of return of 6-8%?
Also, just letting you know. We are in unprecedented times. People now expect to make double digits per year in investing. I invested in eras where 6-8% average rate of return per year was really damn good (Basically 10x+ a savings account). Back then, getting 10-20% a year was like aggressively investing in higher risk stuff and lucking out. I still think of a reasonable baseline as 5-10% average rate of return per year. Long term, those who are expecting 10%+, IMO that might be poison to those that started investing post Covid. My mindset may change longer term, but for now, that's where I stand.
How much regular follow up do you want to have/do you even like investing? (Barely, low, med, high)
When do you need the money? (Few months/sorta like a savings account, few years, 5+ years, it's a nearly forever safety blanket)
What's your risk tolerance/how much can you afford to lose? (I can't lose a dime, low, med, high)
Anything you want to stay away from? (ethics in industries, unknowns, options etc.)
Canada only or foreign ok? (recommend Canada only on simple investments until you understand what you have)
Are you starting today or warming up to a soft start over the next few months?
How much are you investing right away? (all the $20K, some now/some later, little now/more later).
Don't want to answer these questions? I'd lean towards considering buying a major Canadian bank as one of your early stocks and figure out as you go along. Sitting on cash is also not wrong from an investing perspective. Cash is how you take advantage of "discounts" when investment values dip. Don't rush in with your cash if you're not fully comfortable or know what you plan to do.
IMO, Yahoo finance is a decent site to look up info to start off. Make sure you look at the Canadian value (usually denoted as .to) vs the US value one (no .to). This is Royal Bank for instance. The first one is denoted as RY.to as it's traded on the TSX in CAD$ which you can see by the name at the top right. The second one is not, is in USD and on the top right, it denotes it's traded on the NYSE. TSX vs other stock exchanges is like Amazon.ca vs Amazon.com vs Amazon.co.jp. Similar but not the same. Look at historical charts. Look at the current news. Look at what you can to determine the future of that industry.
Set and forget, low follow up 1-3+ years, consider:
- GICs: Low risk, low reward, but better than savings account
- Canadian Big Bank stock: Low/med risk, medium reward. Relatively easy to understand that business in how they make money (ie: fees, fees, fees, interest rate spreads on large loans). It won't be immune if there's a bubble that pops, but if you look at stock charts, any time a Canadian bank stock drops, especially historic drops, almost always a good bet it's a good time to buy.
- ETFs: med risk, medium/higher reward. Basically like buying a fruits basket instead of a bag of specific fruit. You have different fruit if a specific fruit isn't vogue. For short term, I'd look into ETFS of a more stable and mature industry than one of higher fluctuations. Honestly speaking, ETFs are not my thing at all. If you want to invest in different more volatile industries without knowing all the players there and the industry environment, IMO that's where ETFs have more value IMO. For me personally, Canadian Bank stocks are such a reasonable baseline, I'd rather mindlessly throw money into a RY/TD/NA/CM/BMO etc. than ask someone to research how stocks work etc. Others may disagree and that's fine. I've done different types of investing over time, but bank stocks are now my life is busy, nothing's really going to matter, we're all going to die type, enjoy life with fam vs reading stock charts type of investing.
3+ years set and forget:
- Canadian Big Bank stock: Low/med risk, medium reward. Should double in value every 10 years or so and gives a regular dividend. If it ever tanks in value, we have bigger overall issues in Canada than your investment going sideways.
- ETFs: med/higher risk, medium/higher reward. Go big or go home time. Look into ETF in industries that are more volatiles but potentially part of a larger plan (ie: Tech, mining etc.). Your aim is either to increase incrementally (less than perhaps doubling money on Canadian bank stock over 10 years), or potentially give a rate of return of more than doubling your money like a Canadian bank stock might.
Why Canadian Banks? They're rated well worldwide as an investment. I just explain how they make money by saying to estimate that per major bank... "On average, bank fees $10 month x 12 months x 10 million Canadians/businesses = 1.2 billion" + "Average mortgage $300-400K (say $300K to be conservative) x 1% (interest rate higher but assume that's what the bank makes) x 4 million Canadians = $12 billion". Assume credit card interest charges (at 20-22%) makes up the rest of the difference. That's an oversimplified way on understanding how a bank makes money. If you can figure out these calculations vs the banks' annual reports and financial statements, then you're on a very good track to understanding how they make money like clockwork with relatively low risk.
I like banks over GIC/T-Bills/Bonds and ETFs. Risk to reward to effort is one of the best and that's before dividends and capital gains are better taxed than interest. You can potentially lose more principle than other options, but I think it's the best starting balance of safe, not fully deep end/complex/risky, but not overly splash pool either.
I knew a guy who kept buying Royal Bank shares in the 90s and then sat on them and lived "modestly", claiming he never had money. They were 10-20x by the time he looked at them again a few years ago (ignored them until his kids helped him dig up info to figure out what his financial situation was like) and he wasn't excited, he was terrified of having that value sitting in his investment portfolio. We had long talks with him and his wife and kids and in the end, there was an agreement for a minor step up. But overall, just because you invest/have higher asset values doesn't mean some of your life concerns just go away.
I guess I need to make an appointment with our bank so we can set this kind of thing up. I really don't understand how to do even the basics like a TFSA and how you move money in and out of them. I'm financially illiterate.
I guess I need to make an appointment with our bank so we can set this kind of thing up. I really don't understand how to do even the basics like a TFSA and how you move money in and out of them. I'm financially illiterate.
Honestly, don't do this at a bank. I can't give you advice here, and I have to be careful about it, but there are far better options than a slate of bank mutual funds.
But the most critical point is getting that rolling sooner rather than later.
Agreed, just open up a TFSA directly with Questrade or Wealthsimple...it's pretty simple and straightforward. I don't think I've ever had particularly great financial advice from anyone at a branch. They are basically all just salesmen try to get you to buy their product, not look out for your best interest.
Last edited by Table 5; 12-03-2025 at 12:17 PM.
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I guess I need to make an appointment with our bank so we can set this kind of thing up. I really don't understand how to do even the basics like a TFSA and how you move money in and out of them. I'm financially illiterate.
My big problem with the banks is they'll steer you towards their products, probably a mutual fund, and it's gonna have a 2.2% management fee. That's a big loss in interest growth for you, compounding every year. Yes, it's simple. For instance, I have a TFSA with Royal Bank(I only opened it because they waive fees if you have multiple accounts). Over 10 years, it's seen a 6.5% return. Inflation over that period of 2.65%. So the actual growth of your purchasing power is 4.55%. Better than nothing, but also pretty crap. 10 year growth of the TSX is 8.71%, so the fund essentially matched that, and then took their MER. You are ~2% better to just invest in the market index.
If you have the time, I'd suggesting do some learning on your own before jumping in, there are no shortage of sources for free info out there.
Once you setup an account with QW or WS (they have online forms, so you just enter your info and it all gets taken care of), then you have an account you can deposit into. Form your online bank, you can transfer directly to it(it takes a few days). You just enter the institution info(Questwealth or whatever) and your QW account #.
Agreed, just open up a TFSA directly with Questrade or Wealthsimple...it's pretty simple and straightforward. I don't think I've ever had particularly great financial advice from anyone at a branch. They are basically all just salesmen try to get you to buy their product, not look out for your best interest.
That's what I did. Over the period of several months a couple years ago, I moved all my investments into WS. The robo-investing and fees are great, and their managed plan taking care of my RRSP is terrific (doing my own ETF investing in my TFSA). Their app is also single-handedly one of the nicest apps I've ever used - holy hell is it well-designed and easy for us that aren't daily financial nerds.
Best thing I ever did financially was leave a big bank and switch to WS.
Last edited by Muta; 12-03-2025 at 01:10 PM.
Reason: Absolute lunatic spelling and grammar in my OG post
I guess I need to make an appointment with our bank so we can set this kind of thing up. I really don't understand how to do even the basics like a TFSA and how you move money in and out of them. I'm financially illiterate.
Man...please dont. Banks are only there to sell you their products. In my line of work I call Banks 'Training Wheels.'
Because anyone who is any good at all gets some experience there and then goes off on their own.
Do yourself a favour and PM Slava and at least just talk to him. Unlike a Bank, he works for you.
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That's what I did. Over the period of a 12 months a couple years ago, I moved all my investments into WS. The robo-investing and fees are great, and they're managed plan taking care of my RRSP is terrific (I'm doing my own ETF investing in my TFSA). Their app is also single-handedly once of the nicest apps I've ever used - holy hell is it well-designed and easy for us that aren't daily financial nerds.
Best thing I ever did financially was leave a big bank and switch to WS.
I meant to take a look at their robo-investing returns, how are they?
