If you haven’t already started, the best time to start investing is today. Like right now.

As we dive head first into a market crash, this is technically the best time to be getting into the stock market. In this article, I’ll tell you why.

Here are some common excuses of why people choose not to invest:

• Investing is too complicated

• Investing is too risky

• I don’t have the money

• I don’t have the time

Sound familiar? Well I’m here to bust that bubble.

Since starting my first full-time job in May of 2018, my dad told me that if I save 10% of whatever I make over my lifetime, “I will be just fine”. This statement was particularly interesting to me.

Where does this 10% go and how did my dad come up with this magical number? Me and my scientist brain needed to find out.

I made an effort to start educating myself in many areas of personal finance like saving, investing and spending. I found out that there’s so much more to finance than just saving 10% of your income.

You can optimize your finances and truly make your money work for you, you just need to gain the tools and resources to know how.

You don’t know what you don’t know!

The Canada Pension Plan (CPP) has started increasing contribution money from our paycheques to forcefully put away for us for retirement. Canadian’s are simply not saving enough on their own.

Let’s get into it.

Start As Soon As You Can

I’m sure you have all heard of investing before but might not understand exactly how it works. The way I see it, investing in a general sense is purchasing something that you believe will go up in value.

There are lots of ways to invest, but let’s just keep it as simple as possible for now.

One of the ways you can invest is by buying what are called shares of companies. You will have to set up a brokerage account to do this.

Then, you become what is called a shareholder and actually own a small piece of that company. Pretty cool, right?

So if the company increases in value, your piece of the company also goes up in value. However, if the company decreases in value, your piece of the company also goes down in value.

Investing can be as crazy as it seems watching Wolf of Wall Street, but it doesn’t have to be that way. People like you and me can invest too.

The best thing you can do? Just start.

You can invest less than what your friends and neighbours invest over your lifetime but end up with double the amount if you just start early enough. How? Keep reading to find out.

The Beauty of Compound Interest

Think about it, how are you supposed to work 30-40 years saving only 10% of your income then retire and live off of that money for another 30-40 years? That math just doesn’t add up.

Also, taking inflation into account, that $1000 cash you keep stashed away in your closet simply won’t carry the same weight in the future. Your money is losing value every single year to inflation.

Investing is important so you can not only keep up with inflation but actually beat it. Investing is crucial to ensuring your financial success in the long term.

If your income will not be affected during these uncertain times, I guarantee that you won’t notice if you start saving $50 from every paycheque to invest, even $20, even $1! Start however you can manage right now and stick to it. You don’t need hundreds of thousands of dollars in the bank to start investing anymore.

Starting young is the best thing you can do for your future. The earlier you start, the less you actually have to put away. Why? Because compound interest is your best friend.

I started investing at 22 with a few thousand dollars once I had graduated from university and started working full-time. But I really didn’t even need to wait that long. Today, you can start investing with $1. $1 people!!

You won’t have to put away as much of your own money in the long run because your money will make money and then that increased amount of money will make you even more money over and over and over again.

The longer you’re in the market, the more time your money has to grow on itself.

Less Risk Over Longer Time Frames

Investing for the majority of people is just a time game.

For most of us, if we continuously invest in low cost, well diversified ( = don’t put all of your eggs in one basket) funds no matter what is happening in the market, over time the ups and downs in the market simply won’t affect us when we look at a graph 30 years from now.

This is what is known as dollar cost averaging.

Sometimes you’ll buy an investment when it is slightly below it’s value and sometimes you’ll buy an investment when it is slightly above it’s value. But rather than trying to predict the future and time when the market will rise and fall, you assume you will average out over time if you invest a small amount of money more often. This is where low cost investment products become extremely important.

The current Coronavirus pandemic has undoubtedly caused a plunge in global markets. However, lower values in the market right now means that you can buy more shares for less money.

You can personally set a higher or lower risk tolerance for your investments based on the products you buy. This will give you more or less of the major up and down-swings of the market. You can also change your risk over time so whatever you choose to invest in now doesn’t necessarily mean you have to invest in that forever.

Again, the best thing you can do is just to do something rather than nothing!

It’s almost impossible to know your risk tolerance until you’ve experienced a serious market correction or crash (rapid declines in a market value). They can be really scary but they are just a normal part of how the stock market works. As long as you don’t sell, you technically don’t lose any money. It’s all on paper at this point.

If history repeats itself, as it should and most likely will, the market will continue to rise over time.

All In All

Starting to invest while we’re young is one of the best things we can do for our future selves in terms of building wealth. Doing something is better than doing nothing at all.

While you should not be dipping into your emergency fund to invest right now, if you have a surplus of money you would be okay not to touch for a few years this might be the best time for you to start. Continue to educate yourself and decide if you are in the right place to start investing.

So, when is the best time to start investing? Pay off the credit card debt if you have it, save up an emergency fund, then start investing as soon as you can.

Still not convinced? Listen to Robert…

“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”

Disclaimer: I am not a certified financial planner or investment advisor. The ideas posted on this website are my own opinions on how I manage my personal finances. The content is specifically for educational and informational purposes and is not considered professional financial advice. Everyone’s finances work differently and you will have to do your own due diligence before making any financial decisions.

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