How I Started Investing
Ever since I learned about the stock market, I’ve dreamt of becoming an investor. I picked out my first stock to buy when I was 14. No I haven’t been investing since 14, like any kid, I was interested for a few days then went on to other things.
Back then my dad and I had to look through the news paper, looking at tickers. I don’t even know how you could research a company back then? The internet was just barely getting going. Now that I think back, we have it so good today. You can look up any company any time.
Start of Career
When I started my career I did what everyone should do, started contributing to employer matched savings plans. These went into index funds. This is the couch potato method, which will ultimately grow your wealth.
I didn’t really start investing until age 27, I wish I would have started earlier. Life got in the way. Never to late to start though!
I started my investing account by purchasing my company stock options. Some people would exercise their options, taking the cash to buy “stuff”. I have done this in the past when I really needed the money. By starting to save money, getting out of debt, it has given me better options to increase wealth. The stock options also become more valuable over time, but if you need the cash to pay down debt, it can mean exercising them before the true value is created.
So back in 2013 I started purchasing my stock options. It was a slow and steady process. I would buy about $2500 worth at a time, which would then be valued at $4500-5000. The other trick that has helped me grow my account, I put these purchased stocks into my RRSP. This meant at tax refund time I basically got my initial investment back. I then used that refund to buy even more.
This cycle of buying company stock options and putting them in my RRSP accelerated my wealth creation. It has now helped me get to where I am now. Gotta love it when there’s a positive cycle to be in, instead of lets say a pay day loan cycle.
Every investor would love to make a 40% return on their investment, just by putting money into an RRSP I was doing just that! Instant return of 40%, how can you go wrong.
Eventually I started looking into dividend stocks, reading about financial independence really got me going on them. I started up a TFSA account and started putting money in. I bought some dividend companies which I held for about a year, they paid me some money but I never really made any money, or increase in value.
In 2014 the Canopy Growth went public, at the time they were called Tweed Inc. Tweed was the first non dividend stock I bought. I put about $6,000 into Tweed as it continued to drop. Eventually I had no idea if the stock would ever come back up and stopped buying. I should have keeping buying when the stock was $1.60, but I was new to investing.
Dividend stocks are great if you want a very stable income. Right now I’m more interested in hi returns, as I’m not retiring anytime soon and my young age means I can take on more risk.
What I’ve Learned
Slowly over time, without really realizing it, I was learning more and more about investing. I did a few blog posts about what I have learned
- What I’ve learned investing in stocks
- Take Profits
- Don’t Buy Stocks on a run up
- Challenges holding stocks
I’ve made mistakes along the way. But I’ve also done good things without realizing it at the time.
You have to start some where, even if you just have $500 to invest. It’s almost better if you have a small amount as you might make a mistake. I don’t think investing a 100k inheritance would be a great idea as you could loose a lot more than $500!
The earlier you start investing the better, so start saving.