I want to start investing...

T_I_N_A20 · #1 (**permalink**) 08-01-2006, 04:56 PM

I want to start investing my money now.

I don't know what's a mutual fund is, CD, roth IRA and others. Can anyone explain to me with exemple? I don't want to rent a book in the library for now or check in the internet because I don't feel interested at all, since the word sounds boring, I might not even finish reading the first page of the book or the internet.

Do you think they'll accept me? I'm only a teenager and I'm not an adult yet, for another year. Can I put money like once every two weeks? I'm going to wait till my paycheck arrive to separate it all at once. I'm planning to save for a car, a house, my around the world trip in three years and retirement (

)...

I don't need to save for college next year because I live in Quebec and tuition is free, I think... Maybe a thousand, if I go to a private school. My parents will pay for my books.

#2 (**permalink**) 08-01-2006, 05:21 PM

I think first you should have a savings account with expenses that you MIGHT need in an emergency. Then once you have some money saved - you can look at your options for one of your goals - I don't know how much money you will be talking about.

Canada probably has different retirement savings plans than the US, so I don't think you would be doing a ROTH IRA - and there possibly might be issues you would have to think about - tax wise as far as investing in a US mutual fund. Since I have only been an American investing in American funds, I don't know whether there would be a difference in a Canadian investing in American funds - so you may have to look to local resources.

A mutual fund is a company that pools investors funds and buys many different stock, or perhaps just a few (20?), I have a fund called Janus 20, for instance, and so instead of owning shares in individual stocks, you own shares of the mutual fund.

A CD is a time saving device - instead of a regular savings account that you have access to - you usually get a higher interest rate for depositing your money for a certain time period - 3 months to 5 years, say. You would not be able to cash in the CD and get access to your money prior to that time period without paying penalties.

Here is a link to a web page about Canadian Mutual funds

http://www.investcom.com/page/mutual.html

and one on Canadian Retirement investing

http://www.canadiancontent.net/dir/T...ment_Planning/

I think you really need to take some time to do some research and self -education before you do anything too permanent.

T_I_N_A20 · #3 (**permalink**) 08-01-2006, 05:26 PM

Thanks, I have two saving accounts already, so I'm set for other goals. ^.^" I'll have to talk to my dad about it though... But I would like to learn more about it, anymore informations?

Yeah I'll do some research. =)

MyMoneyForest · #4 (**permalink**) 08-01-2006, 06:10 PM

I recommend reading some personal finance blogs. For example, MyMoneyBlog.com is good. My pf blog should be helpful too, it's called MyMoneyForest.com. Check 'em out.

Best of luck!

Broken Arrow · #5 (**permalink**) 08-01-2006, 06:10 PM

First of all, GOOD FOR YOU! I wish I was like that at 17. Seriously, I do.

Second, crap, I just realized that you're in Canada.

However, you can do just fine by starting out and doing nothing but aggressively squirreling your money away.

Don't worry, just keep at it!

T_I_N_A20 · #6 (**permalink**) 08-01-2006, 06:45 PM

Well... I talked to my dad about Mutual Fund and he said he already bought me plenty like for studies and other things, I'll get them by next year when I enter College (Cegep), so I'll get weekly or monthly check from the governement, which I'm not planning to spend except books. ^.^" My dad is going to buy me another one with my money and I already have more than 500$ in my bank, so I can start saving for travel or something like that.

My dad told me I don't need a retirement account, he said nobody thinks about it and he explain to me what's that it but I still don't get it... Probably because of my lack of my own language which I'm not very fluent at it... Anyone care to explain to me in detail of what it is ? My dad said I don't need it, but I don't know anymore... What do you guys think ?

WellManicuredMan · #7 (**permalink**) 08-01-2006, 06:51 PM

Quote:

Originally Posted by T_I_N_A20

My dad told me I don't need a retirement account, he said nobody thinks about it and he explain to me what's that it but I still don't get it... Probably because of my lack of my own language which I'm not very fluent at it... Anyone care to explain to me in detail of what it is ? My dad said I don't need it, but I don't know anymore... What do you guys think ?

Everyone needs a retirement account unless they inherit a ton of money. What will you live on when you aren't working anymore? It is good to start when you're young. That way you don't have to save as much when you're middle aged due to compounding. Even if you only put a small amount of money away for retirement in your 20's or younger, you will have a huge amount when you're old and grey.

T_I_N_A20 · #8 (**permalink**) 08-01-2006, 07:03 PM

Quote:

Originally Posted by WellManicuredMan

Everyone needs a retirement account unless they inherit a ton of money. What will you live on when you aren't working anymore? It is good to start when you're young. That way you don't have to save as much when you're middle aged due to compounding. Even if you only put a small amount of money away for retirement in your 20's or younger, you will have a huge amount when you're old and grey.

My dad said there's no retirement at this age, he refused... He said I have to have a good paying job and give 5 000$ to the governement or something and I can't touch it, I know that except the good paying job part. What am I going to do ? Search on my own? I don't know any retirement account in Canada.

#9 (**permalink**) 08-01-2006, 07:32 PM

I don't know what the laws and options for Canadian retirement. I think you will need to find another Canadian on the board to give you any meaningful information.

Any other Canadians out there?

Broken Arrow · #10 (**permalink**) 08-01-2006, 07:45 PM

Well, I don't advocate arguing against your father about this point. I say just leave it alone, as he wishes.

However, once you turn 18, you should be able to do all the financial planning you want for yourself anyways, retirement and all.

I can't stress this enough: In the US anyway, you really can't go wrong with having a retirement account. If you sit down and look at the numbers, it just makes sense! It's not unreasonable at all to expect to retire as a millionaire using nothing but retirement accounts (401k + IRA) if you start out early enough.

If it makes you feel better, my parents are also very frugal and knows how to save. However, they've only started to take advantage of credit cards and the reward points, and I think they have a mutual fund now. Before, it was all just bank savings and CDs. Ouch! My mother and I have had many a lively discussions about trying to get her to invest more than just CDs. So, perhaps some of it may be a generational/cultural gap thing.

sweeps · #11 (**permalink**) 08-01-2006, 07:49 PM

It appears Canadians have an RRSP, which is roughly equivalent to our traditional IRA.

#12 (**permalink**) 08-01-2006, 07:51 PM

Okay, here is a site by the Canadian government on the options you have through them - they have Old Age Security, Canada or Quebec Pension Plans and Registered Retirment Savings Plans, at the very least.

https://srv260.hrdc-drhc.gc.ca/English-App/INT_01.asp

If you click on the links on the left, it will take you to a vairety of private retirement investing sites for Savings and Retirment Planning in Canada.

T_I_N_A20 · #13 (**permalink**) 08-01-2006, 08:00 PM

^
^

Thanks, I don't see anything related to me though... =S

Broken_Arrow : What's a 401 K account? @.@ I have to get both ? Waiting till I'm 18 seems like a good idea.. Hehe, people probably think I'm crazy.

Broken Arrow · #14 (**permalink**) 08-01-2006, 08:10 PM

Quote:

Originally Posted by T_I_N_A20

Broken_Arrow : What's a 401 K account? @.@ I have to get both ?

In the US, 401k is another form of retirement account. Unlike the IRA, this one is offered by your employer. 401k's main advantage is that it usually offers employer matching. In other words, if you put in a dollar, they'll match you with a dollar of their own. In other words, FREE MONEY!

There are limitations to that though. Not all companies will offer it, and the dollar amount they match as well as up to how much they will match varies quite a bit.

For you, 401k may be largely an academic thing, but I highly recommend to keep this in mind once you start up a full-time job somewhere, and look at their benefit package closely.

Quote:

Hehe, people probably think I'm crazy.

Genius is often mistaken for madness.

more freedom · #15 (**permalink**) 08-03-2006, 03:52 AM

I can recommend you some great investing books if you want..

Are you more interested in real estate or stock market?

T_I_N_A20 · #16 (**permalink**) 08-03-2006, 08:21 AM

Quote:

Originally Posted by more freedom

I can recommend you some great investing books if you want..

Are you more interested in real estate or stock market?

I don't know lol... Sure you can recommand me some investing books =)

Broken Arrow · #17 (**permalink**) 08-03-2006, 10:05 AM

You said you have bank accounts right? That means you should have the right to speak with someone from your bank, and ask them about investing. The services they can offer you will be limited to what the bank can offer (ie. CDs) but some are still very knowledgeable and the advice is free!

T_I_N_A20 · #18 (**permalink**) 08-03-2006, 11:33 AM

Quote:

Originally Posted by Broken Arrow

You said you have bank accounts right? That means you should have the right to speak with someone from your bank, and ask them about investing. The services they can offer you will be limited to what the bank can offer (ie. CDs) but some are still very knowledgeable and the advice is free!

Yeah, I'm going to my bank next week probably to talk about my retirement account, right now, I'm going with my dad for the mutual fund account. Wish me luck, I'll come back to post some more.

Ima saver · #19 (**permalink**) 08-03-2006, 11:53 AM

My granddaughers have had mutual funds since they were born. They have not done as well as I would have hoped, but at least they do have some money for the future. When they turn 18, I will try and get them to open roth ira's if they have jobs then.

Jewelfine · #20 (**permalink**) 08-08-2006, 01:51 PM

Hi there

Yay for you! I am Canadian and wish that I had started investing when I was 17! I am trying to get my neice and nephew to start saving and investing for their retirement!

About you dad saying that you don't need to worry about retirement etc. That is just what he knows. He wants you to enjoy your life and not have to worry about money.

In Canada you can have an RRSP - however you can only invest a percentage of your income each year into it. Do you have income? If not you can still buy Canada Savings bonds or I am sure Quebec has savings bonds too - just go into the bank with your SIN and they can set that up for you.

I think you should be looking at saving emergency funds as well - i.e. 6 months of expenses - especially since you will be in university. There will always be expenses that you didn't think of. Also you are young and the best education I ever got was traveling (I have been to every continent except for Antartica!) - It would be great for you to start a travel account and spend your summers traveling Europe for example.

I am now 36 and feel that I have lived an amazing life and the majority of that comes from managing my money and traveling the world!

Good luck and most important have fun with your money!
Melanie