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Ep 5: ASK US ANYTHING - Investing Question
Today's Question: "I have an extra $500 that I want to invest. How would you invest it? I already have some RSPs in high risk mutual fund but I want to invest in something else."
LINKS:
Black is the New Red: THE place to have Canadian money conversations! www.facebook.com/groups/blackisthenewred
Learn from the SASSY INVESTOR, Michelle Hung: https://thesassyinvestor.ca/about-me/
HOMEWORK:
Do you have a professional that you can go to with your money questions? Book an appointment to check in with them. Don't have a pro? Think of someone who is 10 steps ahead of you that you can bounce ideas off of, and schedule a coffee date to discuss your money goals!
HOW TO GET IN TOUCH:Join in the conversation with 9000+ other Canadians (and finance industry pros) in Black is the New Red: www.facebook.com/groups/blackisthenewred
DM Lindsay @ www.facebook.com/lindsayplumbmoneycoach
DM Meghan @ https://www.facebook.com/porterougeco
SHOW NOTES:
00:00:56 Meghan: We have a listener question: "I have an extra $500 per month that I want to invest. How would you invest it? I already have some RSP's in high risk mutual funds, but I want to invest in something else."
00:01:20 Lindsay: Would $500 per month in spa treatments be a responsible piece of advice? Hahaha! Just kidding. Our good friend Michelle Hung AKA "The Sassy Investor" just talked about "high risk investing." . If you've got a highly diversified mutual fund or ETF, it's not actually high-risk, even if it's labeled as such.
00:04:15 Meghan/Lindsay: The problem with financial advisors is that when someone asks us a question, our answer is 27 more questions. It's because we need to know all the intricacies of the situation to be able to provide the best advice… There are SOOOO many options! What is our listener's timeline for this investment? What do THEY consider to be "high risk?" Can they tolerate market volatility? What goal are we trying to achieve with this investment? What are they going to do with the money? Is $500 per month a LOT to this listener? Or is this chump change?
00:05:00 Lindsay: Many portfolio managers would say that your risk level is high if you buy gold bars, or buy stocks in one single company, or invest in real estate. In those scenarios all of your dollars are in ONE place. If you buy mutual funds or ETFS, your dollars are spread out over MANY companies.
00:07:10 Lindsay/Meghan: Let's pretend our listener wants to invest for their retirement in 30 years. What advice would you give them? If $500 per month is a lot of money for this listener, I would help them to decide if they should invest it in one lump sum every month when it becomes available (to prevent them from the urge to spend it) or if they would feel more comfortable breaking it up into weekly contributions so that it doesn't feel like a lot all at once.
00:10:15 Meghan: I would also look at the bigger picture. If you're not maximizing your TFSA, that's a lost opportunity. Or if your money would better serve you by reducing your debt obligations (especially with the rising interest rates) then perhaps you shouldn't be putting it into your RSP's at this time.
00:11:00 Lindsay: People often start by looking for the product… and that's where the value of advice can come in. It's not very often that the product gets you to your goal; it's the plan that does. I have lots of friends who dumped a lot of money into crypto over the last few years… and they were the loudest person in the room when the money was going up. But those people are a little quieter these days.
00:15:15 Meghan: I think the solution is to take action. Find someone to have a conversation with to get clarity on what exactly the goal for this money is… and choose something. It's easy to get overwhelmed by all the choices and experience analysis paralysis!
View all episodes
By Meghan Chomut and Lindsay PlumbToday's Question: "I have an extra $500 that I want to invest. How would you invest it? I already have some RSPs in high risk mutual fund but I want to invest in something else."
LINKS:
Black is the New Red: THE place to have Canadian money conversations! www.facebook.com/groups/blackisthenewred
Learn from the SASSY INVESTOR, Michelle Hung: https://thesassyinvestor.ca/about-me/
HOMEWORK:
Do you have a professional that you can go to with your money questions? Book an appointment to check in with them. Don't have a pro? Think of someone who is 10 steps ahead of you that you can bounce ideas off of, and schedule a coffee date to discuss your money goals!
HOW TO GET IN TOUCH:Join in the conversation with 9000+ other Canadians (and finance industry pros) in Black is the New Red: www.facebook.com/groups/blackisthenewred
DM Lindsay @ www.facebook.com/lindsayplumbmoneycoach
DM Meghan @ https://www.facebook.com/porterougeco
SHOW NOTES:
00:00:56 Meghan: We have a listener question: "I have an extra $500 per month that I want to invest. How would you invest it? I already have some RSP's in high risk mutual funds, but I want to invest in something else."
00:01:20 Lindsay: Would $500 per month in spa treatments be a responsible piece of advice? Hahaha! Just kidding. Our good friend Michelle Hung AKA "The Sassy Investor" just talked about "high risk investing." . If you've got a highly diversified mutual fund or ETF, it's not actually high-risk, even if it's labeled as such.
00:04:15 Meghan/Lindsay: The problem with financial advisors is that when someone asks us a question, our answer is 27 more questions. It's because we need to know all the intricacies of the situation to be able to provide the best advice… There are SOOOO many options! What is our listener's timeline for this investment? What do THEY consider to be "high risk?" Can they tolerate market volatility? What goal are we trying to achieve with this investment? What are they going to do with the money? Is $500 per month a LOT to this listener? Or is this chump change?
00:05:00 Lindsay: Many portfolio managers would say that your risk level is high if you buy gold bars, or buy stocks in one single company, or invest in real estate. In those scenarios all of your dollars are in ONE place. If you buy mutual funds or ETFS, your dollars are spread out over MANY companies.
00:07:10 Lindsay/Meghan: Let's pretend our listener wants to invest for their retirement in 30 years. What advice would you give them? If $500 per month is a lot of money for this listener, I would help them to decide if they should invest it in one lump sum every month when it becomes available (to prevent them from the urge to spend it) or if they would feel more comfortable breaking it up into weekly contributions so that it doesn't feel like a lot all at once.
00:10:15 Meghan: I would also look at the bigger picture. If you're not maximizing your TFSA, that's a lost opportunity. Or if your money would better serve you by reducing your debt obligations (especially with the rising interest rates) then perhaps you shouldn't be putting it into your RSP's at this time.
00:11:00 Lindsay: People often start by looking for the product… and that's where the value of advice can come in. It's not very often that the product gets you to your goal; it's the plan that does. I have lots of friends who dumped a lot of money into crypto over the last few years… and they were the loudest person in the room when the money was going up. But those people are a little quieter these days.
00:15:15 Meghan: I think the solution is to take action. Find someone to have a conversation with to get clarity on what exactly the goal for this money is… and choose something. It's easy to get overwhelmed by all the choices and experience analysis paralysis!