“There’s a whole world out there to learn about, and the easiest way is to jump in. You can take nine courses but you will not learn until your money is on the line.”
Here I was, writing about investing, without any skin in the game. Full disclosure: I was one of those people using my TFSA solely as a savings account, satisfied with the 1% annual return because I knew my money was safe. At least I was saving my nest egg- but I wasn’t growing it.
So, Btchcoin readers, after speaking with Teri I took the plunge and signed up for a TFSA with robo-advisor Wealthsimple. I chose Wealthsimple as they are the biggest in Canada and have no minimum account size requirement, but there are several other options to choose from (see: https://www.moneysense.ca/save/investing/best-robo-advisors-in-canada/).
As Teri suggested, I transferred in a nice round 100 dollars so I can easily track its fluctuations without hard mental math. After filling out a risk profile, which asked me questions such as my investment goals; my timeline before I’ll need to withdraw my money; my experience in investing; and my comfort with risk, I am all set! My goal is to become comfortable and knowledgeable about the world of investing by the time I’m making real money, so that I can make good decisions with more sizable investments down the line.
Here are some highlights from my first experience of signing up for robo-advising (or investing of any kind for that matter):
- Super easy to set up, including creating a personal profile (but do have your SIN number handy). Syncing with my bank account and transferring money over was also seamless.
- Beautiful interface with simple to understand visual representations of investments.
- They seem to actually care about your financial profile before you begin investing. Because I’m a student with very little income right now, Wealthsimple actually flagged that it might not be the best time for me to be investing. They state that they believe “the best time to invest is when you’re able to live comfortably now, then commit towards your long term goals.” But I like Teri’s advice about learning on the go better, even with just $100!
- Everything feels very low risk: I’m putting in a small amount and I know I can take it out whenever I want. I’m not making any regular or automated contributions to my investing account at the moment, and I’ve kept the rest of my savings in my regular bank TFSA.
- It tells me right off the bat that if I just leave this $100 in and not contribute anything else, I’ll have almost $500 in 41 years! Less exciting than I had expected, but hopefully I can beef up my account balance once I get a job and see some compounding action…
- Wealthsimple is insured. This means that in the case that the company goes down, my precious benjamins would be secured.
- Wealthsimple fees were not clearly laid out during the signup process, although I later learned that they charge 0.5% for the first $99,999, which I am comfortable with.
- · There were not too many student specific options that would’ve made me feel more like their target audience (realistically I probably am not, because I have such little income). For example, in the “what you owe” section they list mortgages, leases, and credit cards, but they don’t mention student debt (which is what I inputted there anyway).