How to Start Investing (Even With a Little)

Inflation erodes the purchasing power of money sitting in a savings account. If inflation is 3% per year and your savings account earns 0.5%, you're effectively losing 2.5% of your money's value each year.

Investing in assets that grow faster than inflation — stocks, real estate, bonds — is how you build wealth over time. The S&P/TSX Composite has historically delivered strong long-term returns, and the S&P 500 has returned an average of ~10% annually over the past century. That's how $10,000 becomes $174,000 over 30 years without adding another dollar.

Before picking investments, choose the right account. Canada offers several registered accounts with powerful tax advantages — understanding them is key to keeping more of your returns.

Your TFSA contribution room accumulates from the year you turn 18. If you've never contributed, you may have tens of thousands in available room. Check your total room on the CRA My Account website.

Some employers offer Group RRSPs or Deferred Profit Sharing Plans (DPSPs) with matching contributions. If your employer matches, contribute enough to get the full match — it's an immediate return on your money.

For most people, especially beginners, index funds and all-in-one ETFs are the answer. An index fund is a collection of stocks that tracks a market index like the S&P/TSX Composite or the S&P 500. Instead of picking individual stocks (which most professional fund managers fail to beat long-term), you own a diversified portfolio in a single purchase.

A simple, proven portfolio for most young Canadian investors: buy an all-in-one ETF like XEQT or VEQT (100% global equities) and contribute regularly. That's it. These hold thousands of stocks across Canada, the U.S., and international markets in a single fund. If you want some bonds for stability, consider VGRO or XGRO (80% stocks, 20% bonds).

For those who prefer to build their own portfolio: XIU tracks the TSX 60 (top Canadian stocks), VFV tracks the S&P 500 in Canadian dollars, and ZAG provides broad Canadian bond exposure.

Getting started is easier than it's ever been. You can open a brokerage account with no minimum at Wealthsimple, Questrade, or through your bank (TD Direct Investing, RBC Direct Investing, BMO InvestorLine).

1. 1Open a TFSA at an online brokerage like Wealthsimple or Questrade. Both offer commission-free ETF purchases and no account minimums.
2. 2Buy an all-in-one ETF like XEQT (iShares) or VEQT (Vanguard) — these give you instant global diversification in a single purchase.
3. 3Set up automatic monthly contributions — even $50 or $100 builds the habit. Wealthsimple and Questrade both support automatic deposits.
4. 4If your employer offers a Group RRSP with matching, sign up and contribute enough to get the full match.
5. 5If you're saving for your first home, open an FHSA to get the tax deduction on contributions and tax-free withdrawals for your purchase.
6. 6Don't check your balance daily. Investing is a long-term game. Check quarterly at most.

• Waiting to "have enough money" to start — compound interest rewards time above all else. Start with $25/month if that's all you have.
• Selling when the market drops — every market crash in history has eventually recovered and surpassed its previous high. Selling during a dip locks in your loss.
• Picking individual stocks — most professional fund managers underperform index funds over 10+ years. You probably won't beat them.
• Not using your TFSA — many Canadians don't realize the TFSA is a powerful investing account, not just a savings account. Every dollar of growth inside your TFSA is yours to keep, tax-free.
• Paying high mutual fund fees — many Canadian bank mutual funds charge MERs of 2%+. A 2% MER vs. 0.20% costs you tens of thousands over 30 years. Use low-cost ETFs instead.
• Keeping investments in a non-registered account when you still have TFSA or RRSP room — you're paying taxes you could be avoiding.