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I have over $50k of savings as a student and my family is VEHEMENTLY trying to stop me from investing it

I have over $50k of savings as a student and my family is VEHEMENTLY trying to stop me from investing it

midnightscare

How would they know if you invest or not. Do they check your statements? Does your uni have an elective in personal finance? I'd recommend taking that, or the free McGill personal finance certificate. Your parents should, too, because they're frankly financially illiterate.


egganarchy

I have a separate account so I could do it without telling them from the money I set aside but they do regularly monitor my joint account which is kind of ridiculous as I don’t know what they are even looking for. Honestly they would probably find out eventually from asking questions and I don’t feel like lying to them about where my money is if they ask me. But they would get really upset at me when they find out, because they always tell me that they are smarter than me in every conceivable way which cannot be true lol. So I am very frustrated, I am trying to learn things and be independent and yet I am being told by my family who has little knowledge in personal finance that I should do what they did so that I can also grow up in my late twenties/ early thirties unable to afford a house if not for a chance inheritance lol. But that’s petty of me and besides the point. There is a personal finance elective at school but I think I may go the self study route as there are lots of free resources online.


thewesternbloc

>they always tell me that they are smarter than me in every conceivable way There's already some great advice in this thread, particularly from u/FelixYYZ. But man, what a toxic and narcissistic thing to say to your ADULT child. If I was you I would be removing any money from shared accounts and ensuring financial autonomy from them ASAP.


howcomeeverytime

Reminds me of the parents in Matilda… > I’m smart, you’re dumb; I’m big, you’re little;I’m right, you’re wrong; and there’s NOTHING you can do about it!


Silver-creek

Even if the stock market does crash in 2021 look up what dollar cost averaging means. You are about to start making more money and if you start investing more that is perfect because you will get your job and be buying stocks at all time lows. Having a joint account with your parents is a HUGE RED FLAG!!! I can not stress enough that you need to take your money out and put it somewhere safe ASAP. My wife works at a bank and tells me all of the really sad stories of people taking all the money out of the joint account and there is nothing the bank or law enforcement can do to help. If that 50k is in the joint account it is legally their money so you better take it out first and put it in your own account or you could lose it all.


lhsonic

A market crash in 2021/2022 means absolutely nothing if you have no plans to use the money in the near future. $40,000 invested in a cash TFSA @ a generous 1.25% is \~$500 in interest per year. For the sake of argument, this rate will not move for 5 years. Inflation is meant to skyrocket in the coming years but we'll just use a constant and very conservative 2%. You will earn $2,578.39 in interest over 5 years. Adjusted for inflation, your money would be worth the equivalent of $38,564.56, including interest. Less than when you started. Let's say you invest in S&P 500 ETF VFV today @ $92/share. That's 434 shares. For the sake of argument, let's say it tanks tomorrow at covid-pace (unlikely) to $60/share. Congrats, your investment is now worth only $26,040. However, unless a truly catastrophic event takes out the entire stock market, you will not lose money until you sell, which you are not going to do. VFV was at $80 pre-covid. Let's assume a recovery over 5 years with a $12 price appreciation (instead of just over a year, like with covid). Your ETF will be worth $45,136. The total appreciation beats inflation and you'll have made money, but just barely. **I would also argue above scenario is unlikely.** I can't predict the most likely scenario but I can say that in the past 5 years, the S&P 500 actually appreciated over 100% in five years and that includes a *massive* crash with a fast recovery. That's with a buy & hold strategy with 2016 money. If you had bought into the covid dip, you'd be rolling in dough. By the way, if the same thing happened today, you'd be sitting at close to $80,000 in 2026 :)


ShamPow86

It's a known control tactic by narcissistic people. Your parents are not happy that you are an adult and are afraid of losing control over you, so they try to convince you that you need them because they are smarter than you and they don't want you to invest because they think if you make money that will make them look bad and you'll have gained some independence. You don't have to lie to them although I guarantee they lie to you all the time to manipulate you. You can simple just "grey rock" them. Give them vague and non answers to their questions. If you live your life in a way to avoid upsetting them you are only going to sabotage yourself and make your future harder for no reason. Their reasons for being upset are not in your self interest. They will get upset no matter what you do to assert your independant because the fact is that they don't want you to be come independant as they you mean they no longer get to control you.


ThunderJane

Make a new account that's only yours. Take whatever money belongs to you out of the joint account and stop using it. If taking your money out brings the account to a 0 balance you may be able to close it without their involvement (check with your bank). *Then don't tell your parents how to access your new account*. I know that staying at home in school so you can save on rent is appealing -- shoot, I did it myself. But you need to have a serious conversation with yourself about whether the cheaper living situation is worth the lack of privacy and attempts at fiscal control your parents are currently offering you.


midnightscare

With self-study you could study the wrong things. You can try to look at the course outline of the course offered at your school and follow the topics. Mine is very comprehensive teaching you about time value of money (very important concept), using a financial calculator, tax, insurance, car, house, will, investment (mutual fund, ETF.. )... and it's frequently praised as one of the most useful electives one could take.


Mortlach78

Honestly, with that much savings, why are you still living with your parents? I don't know how old you are, but probably an adult? Time to take back some independence. Not paying rent is nice, but it is just more control your parents have over you. My relationship with my parents improved immensely when I moved 1000 miles away.


egganarchy

I think almost all my peers in my program in school are living with their parents as well. Also I keep feeling like it’s not worth it to pay rent expense if I move out, as opposed to paying no rent to my parents and only helping with the groceries if I still live here. They are immigrants so it’s also the family/conservative mindset. Just because I have the savings though doesn’t mean I should move out, I need to save up for a down payment on a hone within 10 years and I want to save every dollar I can.


Mortlach78

Sure, I get that, but at some point it becomes worth it to gain your independence and separate yourself a bit more, especially when it comes to financials.


ShamPow86

Just because you live rent free doesn't mean you have to succumb to their every whim. Did you agree to give them control of your life and finances as payment for living in their home?


stripey_kiwi

I grew up in an immigrant family, with extremely overbearing, conservative parents. Moving out ended up being an amazing financial decision in the long run. If I had continued living at home and had to listen to them tell me they knew better than me and and every decision I made was a catastrophic failure I'd be making a shit wage as a bank teller still. Gaining financial independence and the confidence to make my own decisions increased my income more than 3x what I was making before. Please take what everyone is saying to heart, a lot of us have been in the same or similar situations.


Uzmeister

>they do regularly monitor my joint account which is kind of ridiculous Put some onlyfans charges through... That'll teach them to stop sticking their nose in.


Styrak

Take all your money out of the joint account and put it in an account only YOU have access to.


AlwaysLurkNeverPost

>But they would get really upset at me when they find out, because they always tell me that they are smarter than me in every conceivable way The surefire way to know that someone is not smarter than you. To be so absolute and closed minded is moronic. Sounds exactly like my narcissistic parents who always told me they know best and are smarter when it comes to every thing until one day I grew up and realized they weren't. You have to set boundaries. This is 100% your money after all, is it not? If you're 18+, they have no right to know what you do with that money and you should be cutting off that privilege of transparency you are affording them. If they're even slightly reasonable people, they should begrudgingly accept this. This has nothing to do with "living in their house". The next time they say their house their rules, you tell them "my money my rules" (in a kind way lol). So the first most important step is gaining independent control of your own money and setting boundaries. From there, just listen to Felix above. Set aside some for an emergency fund and throw the rest in your TFSA under an index fund that tracks the market according to your risk tolerance.


FelixYYZ

1. Don't listen to your parents as they know nothing. 2. Don't listen to yourself with your stock picks, as you don't know about investing or economic cycles and guessing the future. 3. Markets are at all time highs 3/4 of the time. 4. Investing in a globally diversified all in one ETF based on your risk tolerance. Yes it's that easy.


FiRe_McFiReSomeDay

1. Listen to FelixYYZ, he's right. 2. Open a TFSA, and read about it from the bot. 3. Save some of that cash as an emergency fund, and read about that from the wiki. 4. As an adult, set boundaries early so you're not getting second-guessed by your parents forever. Yes, listen to their opinion respectfully and make sure they understand that you've understood their point of view: then weigh their input against all other sources of information and make up your own mind. !TFSATrigger


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JurieZtune

Good bot


mr_oof

Skookum bot bud.


brendax

that bot sure chooches


districtcurrent

About parents - I noticed at a reasonably young age (16) that they didn’t know much about finances or investing. I started before them actually. Still, they pretty much doubt all of my opinions on it. They won’t even get into what they have invested in, as they honestly don’t know. They gave it to some random company to invest that someone from the church told them about. I hit the jackpot on one stock last year, which now has my dad respecting my opinion a bit, which is odd, because it was a complete gamble and different from what I normally do, which is index funds like what everyone else is recommending. The point is, your parents will likely never see you as literate with money, or will expect you to understand investing, because they clearly don’t get it and you “are just a kid”. Keep learning on your own and avoid stock picking until you have a very strong base of index funds, so that an annual 5% of portfolio gamble on individual stocks is a large enough number to actually be worth it.


AMC_Tendies42069

My father is the WORST, he’s 74 with nothing, he made 0 smart investments. No house, car is leased, no savings..... credit cards maxed I don’t take financial advice from him


pzerr

Listen to Mcfiresomeday. He is also right. Max out your TSFA and to one step further, leaving it alone once invested. Markets will go up and down. Get advice and don't invest in meme stocks.


mtlsg

Listen to Felix. And to develop further on the risk tolerance portion, a big part will be based on when you need the money. If it's within the next few years, investing everything into the market may not be the best idea. No one knows if/when the market will dip, but if your investments are down when you need the cash, you're not further ahead. Investments are long term plays - if you can't afford to wait out a dip, you may be better off keeping a larger part of your money in a HISA. This is even more important given that you're still a year out from getting a steady income.


pyro5050

> 2) Don't listen to yourself with your stock picks, as you don't know about investing or economic cycles and guessing the future. god damn it if that isnt the truth! i should never listen to myself... i talk myself out of good stocks, and buy into bad ones... at least my directed portfolio is doing well and my self run one is doing "ok"


bmcle071

Yes. Open a trading account and put $1,000 in, see how well you can do in 6 months. An S&P 500 ETF will usually get 7-10% per year. Youll see pretty quick that its really hard to beat that.


WildWeaselGT

Or he might do fantastic and think he’s really good at it and then put the rest in and THEN realize it was a bad idea. Early success in this game can be crippling!


Wonderful_Hedgehog

The biggest risk isn't that you lose some money initially. It's that you initially make some money, then lose a lot more picking stocks.


saskatchewanderer

The amount of people that started stock picking at the COVID bottom and now think they are expert stock pickers is out of control. So much bad advice out there at the moment, I'm glad this common sense advice is still making it to the top.


Suncheets

Open a TFSA trading account. Don't be a chump paying taxes on gains


bmcle071

Yep, I got the wealthsimple app and made a tfsa


KevlarGorilla

Wealthsimple is very easy to make an RRSP. Just remember they charge a cut when you convert your money to USD and back, which means that most other stock services are much cheaper to use (like a flat $7 trading fee). If you stick with TSX stocks, it's truly zero fee. Any USD stocks you may be better off with a different service.


bmcle071

I pretty much stick with the TSX. Theres a good selection of ETFs on the TSX.


wishtrepreneur

This is the way, use my code in the link below to get your 3 free stocks on webull. Oh wait, wrong video.


dt-alex

When you self-direct all your investing and go into the red, you will be a chump who cannot claim capital losses. Make sure you pick something safe or that should generally trend upward over time if you're going to be investing in a registered account.


Suncheets

Well that's easy, just dont go into the red!


dt-alex

Ah, we've come full circle to the true chump move - losing money.


randallparkinsons

Cannot agree more. Oof, I'm concerned about OP randomly throwing $25K and accidentally doing something wrong like buying guarantees or like options rather than just a vanilla buy and hold. Defs just test somethings without moving $50K all at once.


FrismFrasm

>An S&P 500 ETF will usually get 7-10% per year. Youll see pretty quick that its really hard to beat that. This could be dangerous advice for someone without much knowledge...if they wind up making like 25% in the first year they might be like "psssh fuck these chumps this is easy...*I'm not fuckin' leavin'!"* and decide they're a master trader


actuaryvsp

New to trading myself and it's really that high? That's nuts!!


bmcle071

Its actually higher. It has averaged 9.5% since I think 1929 or 39, either before or aftet the depression im not sure. There are dull periods, like the early 2000s and then right after the financial crisis. However, after the recovery started it exploded. When you heard politicians say that "we are presiding over the longest period of economic growth in history" they werent kidding. The S&P averaged a whoping **14% since it bottomed out in 2009 until now, INCLUDING the covid crash. Edit: I quickly realized that I made a mistake and divided when I needed a logarithm and put 29% instead of 14%


ALIENSMACK

It's an average so some years its more and some years its less.


sapeur8

you have to subtract inflation out of that to get real returns


witchesbrewm

Such as the vanguard VFV ETF and the Blackrock XSP ETF.


Transient77

I agree with everything said here and recommend reading [Canadian Couch Potato](https://canadiancouchpotato.com/), in particular the Model Portfolios. It can be as simple as putting all $50K in a TFSA and investing it in XBAL. Just learn the rules about TFSAs (they're not complicated) and if you need the money, you can always sell and withdraw what you need. Also, you could make your parents happy and invest in a mutual fund, while still taking advantage of ETFs. Look at the TD e-Series Funds information on that Canadian Couch Potato site I linked above. A year from now when you're done school and out from under their watchful eyes, you can always transfer out of the TD e-Series and into one of the iShares ETF portfolios (or whatever you like).


noematus

"rick tolerance" is killing me over here. Picturing massive stock gains, resulting in too many Ricks entering your orbit. Don't make that mistake!


FelixYYZ

Fixed Rick lol


noematus

Aw nice, thanks for the chuckle.. :)


Smiley-Canadian

Fully agree ETFs like VGRO or XGRO. They’re easy, mostly manage themselves, and have way less fees than mutual funds. Questrade is an easy platform to use with very low fees.


GarboMan

For sure. Except bonds have no place in a young person's portfolio... they days of 15% interest are long dead.


nacho1599

VEQT baby


Jacmert

> Except bonds have no place in a young person's portfolio... I assume you mean bond funds and other fixed income holdings, not just literal bonds. But a "young person" who mentioned they want to save up for a down payment... that means a potentially very short investment time horizon (e.g. < 5 years), so in that scenario bond funds or at least fixed income would make a lot of sense as a sizeable allocation %, wouldn't it? Now, bond rates are still pretty low right now so that takes away from some of the attractiveness of investing in a bond fund, but the whole concept of having a decent sized fixed income % in your asset allocation still applies, no?


TheLemon22

Yeah, just because bond growth has been stagnant doesn't mean that it's not good to have some resistance to volatility in your portfolio.


KWBC24

Add onto that, what I did with my savings is find an ETF that pays out monthly dividends, as well as fits my risk, and budget.


yakadayaka

Listen to FelixYYZ - this is the way. I would only add that you should \`invest' $50 or so of your $50k to buy, and read, the following two books. That $50 investment would eventually be worth millions. 1) The Wealthy Barber - David Chilton. 2) The Smith Manoeuvre - Fraser Smith If you're cheap AF like me and don't want to spend $50, just find and download PDF versions. But read them.


landoonter

Listen to Mr.Felix. This is solid advice.


olivier2675

One more vote, you're right, it is as simple as that.


Nouyame

Should just sticky this comment at the top of the sub. Would probably reduce posts by 90%.


trolleysolution

This is obviously right, but if unconvinced, read *Millionaire Teacher*, which you can likely get as an eBook from your local library. Personal finance is made to sound more complicated on purpose so that you don’t trust yourself to make good choices and leave those decisions to your bank. In reality, you and your bank can’t predict which investments are going to pay off. A globally-diversified ETF managed by a robo-advisor will almost always outperform any given mutual fund over the long-term, so open an account with WS or QT or whatever other low-fee institution you prefer and just routinely put money in there. And remember, if the stock market crashes, that’s just a fire sale on stocks, so just buy more.


Matiti60

https://www.vanguardcanada.ca/individual/questionnaire.htm#/ Take this quiz and buy an ETF with that allocation.


1slinkydink1

I hate all Ricks. Where does that leave me ;)


splendidgoon

Rick doesn't care. He's never gonna give you up. He's never going to let you down. He's never going to run around and desert you. Even if you hate him.


SavvyInvestor81

Your parents seem to suffer from investment loss PTSD. They are probably the type who panic sold in 2008 or early 2020. I guess it's time to put on your big boy pants and do what you think is right. I suggest buying VEQT rather than individual stocks, maybe that will make your parents feel better (I doubt it).


ZenoxDemin

My dad has a crystal ball too. He texted me SELL, right as we were at the exact bottom of 2020.


leveragedBoi

have you talked to him about it since then? VT total world is +86% since march 2020, what does he say to that? was he able to reflect on his bad investment behavior?


ZenoxDemin

He's retired so he doesn't actually touch anything. The day he will suggest that I should buy GME is the day I immediately sell my shares.


BigCheapass

>2. Parents are saying the stock market is about to crash in 2021 >but I am thinking that there are no signs of the economy slowing down any time soon so I really don’t think the stock market would crash in the next 2 years? No one, especially your parents, have any idea when the market is going to crash. Please completely discard the idea of whether or not it's a good time to invest. The best time is always yesterday. >I’m not sure if post-stock-market-boom, if we should be switching over to more conservative choices like GICs or very low risk mutual funds This mindset is flawed and is one of the many biases that plague the choices investors make. You assume that because there was a huge run up that there will be a crash. People said that in 2014, 2015, 2016, 2017, 2018, 2019, then when 2020 came they said "See! I TOLD YOU!" My point is that you don't know. You can't use past results to determine what will happen in the upcoming short term future. >if I just saved up my after-tax salary every year, or would not investing any of my savings seriously end up holding me back in life? You can be fine but chances are you will be retiring many years later or with a much lower quality of life. Investing can be daunting and you should never jump in without a decent understanding but by not getting involved at all you are leaving many many thousands of dollars on the table. >it will get difficult for me to grow my wealth fast enough to afford a house in my mid-high COL area. If you are planning on buying a home in the next 1 to 10 years then the stock market might not be your best bet. The stock market does trend upward as a whole over time but for shorter periods, sometimes even a decade or more, you could find yourself in a down cycle. It's entirely possible that money you invest today could be down 30% or more when you need it 5 years later. The longer your timeline the more likely your investments will be much higher than when you started. >1. My family is not “letting” me invest my savings into stocks that don’t seem to be too risky (eg CP, BMO, Air Canada) I agree with them here. You seem to have selected stocks based on a gut feeling. Your "gut feeling" is based on pulicly known factors and the sentiment given off by the market as a whole. In short, the feelings and convictions you have about these companies are already reflected in their price. We have no reason to believe these specific stocks will exceed current expectations going forward. https://en.m.wikipedia.org/wiki/Efficient-market_hypothesis >I should keep all $50k of my savings as CASH in my bank account. Even if you will need this money in the short term you should keep it in HISA / GICs to get "some" risk free returns. >They are saying to invest $10k maximum in mutual funds and keep everything else as cash. I say “letting” as my parents are comfortable only if they are very “involved”, and they are also letting me live with them rent-free so “their house their rules”....... I have been fed this information since I was a teenager and I am frankly a bit upset that I missed out on 5 years of time in the market. I hate to be blunt but your parents sound financially illiterate. It's not really anything to be embarrassed about as very little emphasis is put on financial literacy in our education and culture. Do they have access to your bank account? If not they really don't need to know what you are doing. If so, I find it a bit concerning that they are so controlling of a fully grown adult. Maybe ask for more privacy and independence. It sounds like they do want what's best for you but making your own choices (and potentially even mistakes) is part of becoming independent. If I could give one piece of advice, please read The Millionaire Teacher 2nd edition by Hallam. It was the first finance book I read which really propelled me towards my path of financially literacy.


tangotrigger

" don’t seem to be too risky"....and cites Air Canada Just throw it in a ETF according to your risk profile and forget it for the next 30 years.


deltatux

Don't stock pick, don't try to time the market, if you want to invest, buy asset allocated ETFs or roboadvisor to instantly diversify your holdings. No one knows if there's a stock market crash or not. Anyone claiming it is either guessing or lying through their teeth. However, before investing, make sure to follow the PFC Money Steps, see !StepsTrigger below. Also, are you over 18/19? If yes, your parents have no control over your money, you can do whatever you please. They can at max advise/annoy you about it.


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Hi, I'm a bot and someone has asked me to respond with information about what to do with money. This is meant as a step by step guide of how to prioritize and what to do with money. If you prefer to see a flow chart, click here: https://i.imgur.com/zlGnuDO.png Step 0: Budget, reduce expenses This will help identify areas where expenses can be reduced in order to have leftover money for the next steps. Step 1: Emergency fund that covers 3-6 months of expenses in a HISA An emergency fund is an amount of money kept somewhere liquid in a way that it can be accessed at any time, such as a savings account. This money is meant to cover unexpected expenses such as loss of work, car/appliance repairs, unexpected travel, etc. Should you ever use part of your emergency fund, you must come back to this step and replenish it before going back to any further steps. Step 2: Employer matched retirement funds If your employer offers contribution matching in a retirement account, contribute the amount needed to get the full employer match, nothing more. As this is essentially free money, it's important to take advantage of it. Step 3: Pay down high-interest debt At this point, you should focus your extra money on paying down high-interest debt. High-interest debt could be defined as debt with an interest rate of 10% or higher. Step 4: Save for large short term purchases like a car, or downpayment for house in a HISA. If you will be required to make a large purchase in the near future such as a car, or a large personal investment such as college, now's the time to save money for that. Money towards that purchase or personal investment should go in a high interest savings account. Step 5: Save for retirement At this point, you should aim to save and invest at least 15% of your pre-tax income for retirement. This number could be higher if you are behind on retirement savings. With more time before you need the money, you will likely now want to look at investing (https://www.reddit.com/r/PersonalFinanceCanada/wiki/investing) those savings. Step 6: Pay down low-interest debt Any other remaining debt can be paid off in full at this point, or you could decide to go directly to step 7 while keeping steady payments on the low-interest debt. Step 7: Save for other goals You've now reached personal finance maturity. It's up to you to decide what to do with the leftover money. Some common suggestions could be: Saving for children's education Saving for property down payment Saving for vacation Increasing retirement savings to retire early For additional information, please see the wiki: https://www.reddit.com/r/PersonalFinanceCanada/wiki/money-steps https://www.reddit.com/r/PersonalFinanceCanada/wiki/index#wiki_specific_topics *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*


egganarchy

Would you say there are situations where stock picking is a good opportunity? I do see some stocks which appear to be safe or have upward potential which I would want to allocate a small % in my portfolio. Good point on the ETFs, do you know if I go to my bank advisor if they have some that they would recommend or if it’s something I should pick on my own (there are so many to research!)? Would you say they are better than mutual funds, and why? I am a legal adult but they are very conservative and I am just hoping to live rent free with them for as long as possible to save money (this is what they want as well) but this whole investing thing has been making them upset. Thanks for the bot below, I will check out that info and the links as well.


deltatux

You as a casual retail investor will not ever be able to be as diversified as an asset allocated ETF. When you buy an asset allocated ETF, you're investing in thousands of companies around the world. This allows you to spread your risk and access growth in areas of the market that you might not have when you stock pick. The average investor is also unlikely going to have a lot of knowledge and spend the time to study the company's fundamentals, go through financial reporting and do the proper due diligence. The average investor when stock picking is just doing it not much different than gambling. They picked it because it felt like a good bet. The only time you should stock pick is for fun, no different than gambling, always make sure to be prepared to lose the money. Only do it once you have a proper investment portfolio. Personally if you have no experience in trading, I'd go the roboadvisor route, it's literally set, contribute & forget. Roboadvisors also prevent people from screwing with their allocations and veer them off course. Going self-directed can increase those temptations. No, you absolutely do not need to speak with your bank advisor, all they would do is to sell you expensive mutual funds, that's their entire job. You really should do research before investing. Sounds like your parents might have a point as you seem to require a lot more study before setting off on your investment journey.


egganarchy

That makes sense and is helpful, thanks. Also, I honestly think my parents don’ know much more than me. They exclusively invest in mutual funds through their bank advisor and I honestly only found out that ETFs existed like 6 months ago. They have no idea what an ETF is and are paranoid every day that the market will crash, there is a lot I need to unlearn from them... Might need to open a wealthsimple account for the roboadvisor right?


deltatux

They do need to realize that mutual funds invests in the stock markets right? So let's say by chance that they're right, their mutual funds will also drop. Stock market ebbs & flows, ups and downs are normal. Before the 2020 market correction, the stock market had the longest bull market on record spanning over 10 years and if you stay invested over a long period of time, whenever the stock market dips, which it will inevitably do, the dips are less pronounced because the funds grow over time. You honestly need to do more research, do not invest until you do more research. Personally, I still recommend novice investors or anyone who wants to set, contribute & forget, to check out roboadvisors. They will provide you with an ETF portfolio that you can invest in based on your risk tolerance. They will adjust & balance the portfolio for you. It's a bit more expensive than buying asset allocated ETFs yourself but it is significantly cheaper than mutual funds.


egganarchy

Ugh, exactly right- that’s what I told them, about mutual funds being just a collection of diversified stocks and they will just move up or down along with the market, but my parents said to me that a mutual fund is LESS risky than the stock market and that mutual funds will recover faster than the dow J! Which I’m pretty sure makes no sense. I’m ranting at this point but I’m so frustrated with them at this point. Thanks for all the tips and I will keep researching on!! You are right a roboadvisor sounds better than asset allocated if I don’t fully know what I am doing yet. At least I’m still pretty young to be getting started now but I am honestly worried that starting late means I will be set back from being able to buy a home for at least a few more years than if I had learned about finance properly as a teenager.


deltatux

Depending on which mutual fund and its allocation, they can be less risky, that's true, more bonds do make them less risky and if they have stocks from many companies they can spread the risk around. It's unlikely that an actively managed mutual fund can outperform the market and that's backed by research, sounds like your parents believed their financial advisor at the bank too much. At the end of the day, they're salespeople, their job is to sell you products, they're paid by the banks to push products with high margins for the bank. At the end of the day, what you want to do to achieve long term growth is to passively invest. Yes, you won't see massive gains in the short run but that's not what investing for the future is, those who seek short term gains are essentially gambling. Actively managed funds rarely beat the market yet they cost more than passively managed funds that just track indices. Anyways, sounds like you're in your early 20s, you're still far ahead than many of your peers who might not be even thinking about investing. Yes, the earlier you start the better but at least you're starting. Time in market > timing the market.


coyote_123

No, there are no situations where stock picking isn't a gamble. If there were then everyone would be rich. Do you think you have found some secret that all the rest of the world hasn't? That you've figured out something people who have been doing this as a career for decades haven't? It's an opportunity to scratch the psychological itch that gives many people an urge to gamble.


carcasaron

>there are no situations where stock picking isn't a gamble Good lord this sub is really silly sometimes. If you do serious research on a company and believe in their fundamentals and long-term path, buying some of their stock is indeed investing in them.


Garp5248

I'm about a decade older than you (early 30s) and have been investing since my 20s. I started off with ETFs but for the longest time had some money if stock pick with. Now all my money is in ETFs. It's not the most expensive lesson, but one you will no doubt learn in time. The stocks I picked just underperformed. None tanked but they didn't do as well as the ETFs. So why bother?


auxym

Rationally, no, there's never a situation where stockpicking is a good idea. Yes, some people have gotten wildly lucky and made fortunes. People have also made fortunes playing the lottery or the casino. Does change the fact that the statistical expected value is negative in both cases. Some people keep a few percent of their portfolio as play money to pick stocks. It's not rational, but it keeps them from doing stupid stuff with the rest of the portfolio.


jello_sweaters

- keep it in cash, and lose 1-2% per year. - put it in mutual funds, and pay 1-2% per year in fees, vs. buying broad, conservative market ETFs. - "their house, their rules" is perfectly reasonable as far as expecting you to mow the lawn or take your turn cleaning the bathroom, but gives them zero control over the money in your bank account - Listen to FelixYYZ, he's right.


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alphawolf29

imo high inflation is more likely than market crash, but either way "time in the market.."


egganarchy

Yes exactlyyy. I have been telling them this for the past four years and now I have lost four years of time from listening to their nonsense lol.


classy_stache

You should listen to yourself then, and stop listening to your parents. You have repeatedly said your parents are wrong, you have missed out on so many years in the market, you have a plan but they don't like it etc etc. Do something about it then. Someone is going to be unhappy: either its you because you keep living under their thumb, or your parents because you are taking steps towards independence. The choice is yours - don't blame your parents when you weren't willing to follow your own wishes.


green_ribbon

Move out. Privacy is worth every penny.


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humanefly

I would say that it's their house, I agree fully with that, but it's also completely your money and your future, so the decision of what to do with the money is ultimately yours; nobody can take that away from you. > I say “letting” as my parents are comfortable only if they are very “involved”, When I was 12, i started to mow lawns and rake leaves for some cash. Up into then my money from allowance etc had been deposited in a joint account, held with my parents. At the time I started earning my own money, of my own accord and without asking permission I went to the bank to open my own bank account. As it happened, it being the local branch, the teller noticed that I wanted to open a new account in my own name, and she said actually said something dismissive like: "I'm not sure your parents want you doing that, dear" So I looked her straight in the eye and said: "Are you saying that I need to go to another bank?" From then, the money I earned went into my own bank account. I would note that it you're living at home, it would be completely reasonable to offer to pay rent, with the understanding that anything left over is "your" money to be deposited into your own, non joint account. >Parents are saying the stock market is about to crash in 2021 You should not be trying to time the market, but similarly I would also not recommend buying in, in one lump sum. Decide how much you want to invest in equities, and dollar cost average that into the market over a set time frame. If you expect to have any expenses in the next 2-3 years coming from that money, none of that earmarked money should go into equities, So for example you want to buy a car, you are willing to spend $10k on a car, you should not invest a single dollar of your car into the market. Put it into a two year GIC, cash it and then decide if you still want a car. In this market, personally I would want 3-6 months expenses in cash/GICs in case I lost my job. I think I would set aside my car money, 3-6 months expenses and maybe a few months of local rent in case my parents get pissed that I'm investing my own money, and we have a big disagreement over it. I am fairly conservative with my money; I buy depreciating assets like cars in cash, or I do not buy; I moved out at 18 years old for the record, and I would say I'm fairly pro- independant life, but that was 30 years ago: I am not sure that is a good mindset in todays world, and additionally if you otherwise get along very well with your parents and stay home, that is indeed a highly valuable option.


egganarchy

Thanks for a nuanced answer with the great advice! I think I have a better sense of how I want to plan out what I need to set aside vs what I can risk in the market. I have heard that people think it’s a bad idea to buy cars outright with cash rather than financing at an attractive interest rate, because the lump sum could have been invested, would you disagree with that?


humanefly

Yes, and strongly for the reason that current moment in time notwithstanding a car is a depreciating asset. If you finance, it can happen that you are underwater on your car and if you crash it you owe more than it is worth. Then what tends to happen is that people will just go and finance a new car, and roll the leftover in and over time that ball of debt grows. I do think that if you are financially sophisticated and experienced, you can do this and do it profitably but I am of the opinion that this should only be attempted by people who are already fairly experienced and have a solid net worth. While you clearly have a solid head on your shoulders, are willing to seek advice you are not very experienced and you're just at the beginning of your financial and professional journey. Your job is to build a solid base, first and foremost, not to take risks IMO. If you want to borrow to invest in yourself, get more education, become more highly trained and increase your value in the market, well that is what I would describe as an investment in an appreciating asset. Cars, vacations, toys are cash only. if you don't have the cash, you can't afford it. I admit that I'm fairly old fashioned, but the reason has much to do with surviving extreme situations. You can definitely take some risks at a young age, but you should not risk bankruptcy. I am debt averse, I do understand you need debt in business situations but your personal vehicle is not the place to hold debt. If you want debt, move out and buy a condo; make it a two bedroom, rent out the other bedroom. Debt backed by real estate is not a bad move especially if you can use it to get someone else to pay for it,


egganarchy

That makes a lot of sense, thanks for writing that out! I think honestly for a lot of people debt has become too normalized. You are right that it is best to limit additional debt rather than add to the big snowball of student loan debt, and that trying to manipulate too many levers when it comes to money and investment is probably a better idea for someone more financially established.


humanefly

Debt is a tool that can be used to build wealth. It is a form of leverage, and it goes both ways. If you get it right, it builds wealth; if you get it wrong it is equally capable of destroying wealth.


egganarchy

Well said. I guess the hard part is that you could be doing it “right” but get unlucky. Which makes it risky for younger people who are not as established as they would be losing it all.


humanefly

If you follow this sub long enough you will see many stories of young people who did not fully understand what they were doing, and later regret car debt. Even if you think you know exactly what you are doing, sometimes we rationalize, in order to do something we just want to do, whether it is the right thing or not. This hard rule is at least partly, for me, a way to protect myself from my own emotions. Saving forces me to plan; planning forces met to think; thinking means I am less likely to make emotional decisions. Credit makes spending "easy" it is literally psychologically painful to spend cash, and much easier or less painful to spend on credit; somehow people tend to spend more when using credit. Many people are sophisticated enough to understand the risks of credit, and pay off their card balance every month. We each have to draw the line on spending somewhere. I am fairly good at budgeting but when I borrow it tends to throw me off. The way I do it is I keep a very hard and tight leash on monthly reoccuring expenses. PreCovid I preferred to spend cash instead of credit. If I were starting out from scratch today I would very deliberately keep a low limit on my credit card and pay it off every month. Keep it simple, focus on core habits. You are already asking questions which puts you ahead of many, you will be fine Onwards


egganarchy

You’re right, we always need to know exactly what we are doing before we actually do it. Many times we accidentally make decisions that we are not qualified or equipped to make. Thanks for the advice and insight, I am glad that I am asking the right questions but I am also kicking myself a little that I couldn’t start learning about all of this when I was a teenager. My family does not know a whole lot about finance and actually taught me never to invest and to instead earn money by saving and “working harder”. It sounds great in principle but unfortunately I cannot just start working 80 hour weeks to save up for a home. So that means I will have to invest in index funds and other diversified investments asap because I want to get out of my parents’ house already, they’re great people but they drive me mad sometimes lol


BeerLoverNorm

You have one more year of school before working full time? Then I’m afraid the best option I can think of is to suck it up for one year, keep it in cash. Once you get a job, move out and invest or spend however you want. It’s the stock market, it’s supposed to go up and down. But in the long run, it always goes up. Your parents are being extremely risk averse and that’s not good if you want your money to grow.


jsboutin

I think it's time for you to be a grown adult and move out. Their house their rules is indeed correct, but you don't have to stay there. Continuing to be a de facto teenager is going to hurt you in more ways than whatever it does to your net worth. I'm not saying it's impossible to be a grown adult while staying home. I'm saying this for OP's situation.


therhythm6562

That doesn’t make sense. Sure it’s their house so fine their rules about the house — having people visit, maybe decorations on the wall. But how does that get extended to personal financial management? OP gotta draw a line.


jsboutin

If you take someone's resources to give you shelter and food, you also take their advice I think is the core issue.


wamjaeger

wrong. parents role is to do those things for their kids. doesn’t mean the kid has to be their slave. listen to the advice but there’s no need to follow it. obviously this pertains to personal stuff. not “house rules”.


jsboutin

Parents role is to get their kids to maturity, not give free housing without constraints forever.


wamjaeger

sure. what does controlling their finances have to with that?


alonghardlook

In a sense, you're both kinda right. The ideal situation for all parties would be parents take off the financial leash and let OP deal with his money the way he wants (because they have no right to control his finances), and have OP pay a small/modest amount of rent to offset some of the costs of living at home (because they also have no obligation to give free housing to adult children). $300/month in rent is a small price to pay for financial freedom.


Parttimelooker

They are offering Op the chance to save that money by living with them. They are doing it for his benefit. If they don't perceive that he is benefitting by putting those savings in the market I think that's fair. I don't think there's anything wrong with him putting it in the market but agree that his parents are justified in saying what he does with the savings.


wamjaeger

their house their rules is incorrect.


oops_i_made_a_typi

I mean it's up to him if the free rent (and potentially free food/chores service) is worth it or not to him


PaddyPat12

ya I'd be like "bye...see ya never...."


whytheusernamethough

Time in market always beats timing the market. If I were you I'd ask why your family is against investing in the stock market. Have they invested in the market to know the risks and rewards involved. You thinking of investing is a step in the right direction. Good luck and always do your research/DD before making your move. From experience, Mutual Funds are not worth it since banks/institutions take a big cut from your gains (usually 2%).


egganarchy

Thanks! I put a bit of money in mutual funds a year ago as I just wanted to throw my money somewhere so it could start earning me something (I do have $400 of unrealized gains so far, woo) but yea others have brought up that ETFs are more worth it if I want a nicely diversified bundle of investments. Might sign up for wealthsimple in this case.


Drinkingisfun

As someone who worked at a mutual fund company for many year.... I buy ETFs. 😆


wecandoit21

fucking invest it ​ savings rates are so damn low.. I dont know why people still tell people to hold everything in savings.. even if youre buying a large asset in 2-3 years I'd say invest a good chunk of it. Index/etf's are a good way to start and if you want to take a little more risk than equities. ​ Yes have a good foundation in savings.. but this sub is so bearish and conservative . Markets recover .. people always freak out and are never patient.


HistoricalSeason2723

Id move out lol


egganarchy

Don’t want to put my money towards rent expense when it could be going towards equity though :/ free rent living with the rents, man :/


Garp5248

Sure but it's not going to equity is it?


tojoso

> free rent living with the rents, man :/ It's not free, it costs you thousands of dollars per year opportunity cost.


BulletproofCPA

It's also not free if you're paying with your mental health.


JustSkipThatQuestion

Is it possible that there's some aspects of mental health that are better *because* OP lives with his parents? Stability, security, sense of familial community? Curious


alnono

I’m going to assume you don’t have controlling parents like OP


appathepupper

This. They want most of your $ in a cash account, do they realize that will likely be money lost since those interest rates don't usually keep up with inflation?


tojoso

If he had the money in XEQT over the past 12 months he'd have made $15K in gains. Probably not enough to rent a place, depending where you live, but it's silly to keep $50K in cash. And obviously it's not gonna be 30% every year, but even at 7% average it's $3,500.


Itom1IlI1IlI1IlI

not sure why this is downvoted, it's a smart move... save that rent money.


CryptographerTrue619

I'm 36 and have only started investing in something other than mutual funds this year. Back when i was early 20s and had a good savings, a financial investor who my parents used told me to keep the money in a hisa so I had easy access to it and it was safe. I did put a large amount into the tangerine investment account, which was luckily a low mer and higher yield than a standard Mutual fund. Now, i wish i had read more about investing earlier in things like ETFs and index funds. After reading the millionaire teacher this past year, it definitely could have helped me grow my money more. If you want to invest in individual stocks, start with 1-2k and make sure you don't make emotional decisions and sell when the stocks drop slightly. Then once you know you can add in more money to the stocks. Make sure to take full advantage of your tfsa and to keep some money in cash for an emergency fund.


OttawaPublicServant_

Ideally make those investments inside TFSA, if you can. You will never pay taxes on the growth (as long as you stay away from aggressive day trading which CRA may flag for taxation purposes). Spread the amount in separate buckets: high-risk, medium-risk, low-risk investments. This way you never lose everything should things go sour…


abacabbmk

anything you invest today, you need to be ok to go without it for a while. Also need to be ok with ups and downs. Note that your parents are just trying to look out for you the best way they can. Their intentions are good, but these are complicated topics. Be happy your parents care, because many wouldnt.


elkorkor

Listen to your parents, spend your money on hookers and blow. TL:DR this is fun but bad advice


floridawesome

you realize the choice to keep it in cash is an investment decision right? It's not like you are not investing by keeping money in cash. you are conciously chosing to invest in cash as opposed to other investments.


Affectionate_Board54

oh yeah this is such a good point. Not doing anything is also making an investment decision


Due_Ad_7331

Ye the investment decision to lose more than 2%+ annually if we are going with the BS CPI amount


Native_NightHawk

GME go brrrrrr. In all seriousness, if you’re looking to invest VEQT or XEQT are excellent options and are diversified ETFs. CP, BMO, Air Canada are based on what you might be potential gains, but they can go either way. If you do decide, do your due diligence. People usually lose out on potential gains when the market crashes and bounces back, which it always does. This all depends on your risk factor. I myself understand your situation as a fellow student; understand your risk tolerance and what you’re willing to see your investment go down to. Goodluck


NetworkRobin

Just buy vgro And don't tell them that yuo're investing. Tell them that you're putting it in a high interest savings account.


bmcle071

Nobody can predict market crashes, right now a crash looks pretty unlikely. However just look at the March 2020 crash. The S&P 500 dropped somethibg like 30% in the course of a month. Its been like 16 months since then, not only has it made a full recovery, it is actually up a full 30% since the pre crash high. If your plan is to invest for years, then dont even think about whether or not the market is going to crash. If it does, you just dump more money in. Its not like you plan on retiring in 5 years and have to be cautious.


Bcham1234

Are your parents extremely wealthy? Do you want to be where they are in 20 years, or in a better position? There’s nothing worse than taking advice from people who aren’t where you want to be in the future(speaking from experience). Cash loses value every year, that is a guarantee. Don’t blindly gamble, but assess your own risk tolerance and invest accordingly


FrenCan16

Don't pick individual stocks. I think the lowest common denominator in this situation is to invest the 10K they are apparently okay with you investing. But don't invest in mutual funds, they are a rip-off on fees for no additional performance. Buy 10K of a low-cost index ETF and tell them it's in a fund if they ask. They are probably illiterate enough to not know the difference anyway. I would stop talking openly about this with them because by doing so you are proving that it is of interest to them and they have some stake in it.


egganarchy

You raise a good point, I might just need to force them to deal with it. If I actually am making smart choices for myself and they still disagree that’s their problem.


JimboE911

Your 50k in index ETFs over the last 5 years would be worth 150k today. Your parents owe you 100,000. How do they plan on paying you that back?


idreamofkitty

What is your parents' investing track record. Not great? Then what authority do they have to give advice?


FindTheRemnant

Keep $5-10k aside for a move out budget. Trading your independence and potential for rent free living is not the awesome trade off you may think it is.


Affectionate_Board54

Just dont do stockpicking and invest in passive index etf for growth...if you want to try stockpicking or active trading take a small portion of that money that you're willing to lose and try it before you invest all your money in active trading. Stock crash and short term market movements dont really matter if your investment horizon is like 10-15 yrs minimum. the loss comes from not being in the market as early as you can be... do not do GIC GICs are for people who're in like retirement age and they dont need growth and only need to protect their asset value basically. Your parents mean well but they are not very financially literate so don't take their advice on this topic from now on and depend on outside sources and educate yourself. My parents knew 0 about finance so I just read books, joined groups, and listend to podcasts. And they shouldn't really have this level of control over what you do with your money at your age, unless they're really wealthy and they really know what they're doing


Disneycanuck

I come from a household where investing was shunned. Everytime I speak with my parents they lament over the lack of returns with mutual funds and fret over every daily dip. I learned later in life that investing in broad based index ETFs are the way to go for the uninitiated. I missed out on some incredible growth but am now climbing out of the hole. The lesson here is that your parents mean the best but don't know what the heck is going on. They are making decisions for you based on fear and lack of knowledge. You have a year left in school so if suggest taking $15k and parking it in a TFSA high interest account and investing the rest in VEQT/XEQT. It will go down and it will go up. Once you have a steady income, aim to have 20% of your gross income invested in the market (assuming you don't have debt to pay). Max thr TFSA first, then RRSP. If you stick with and adjust the plan over time you should have a really nice nest egg in 25 years time.


therhythm6562

Move the money into a TFSA, and get broadly diversified mutual funds or ETFs. If you *really* want to keep some in cash, at least move it to a HISA like EQ Bank so you can get 1.25% interest.


butterflyhatcher

I have a friend who lived with his parents until his late 20s and never invested in anything except GICs because his mother forbade it and he is well into his 30s now... Dont end up like him.


tsfinance

Are they rich? If not, ask them why you should listen to them about how to manage money.


0melettedufromage

Don't invest in AC... they're bleeding money. XEQT / VEQT all the way


Greasysalad

By not investing the cash, you're losing money year over year to inflation. Unless you need the liquidity for something soon, you're much better off investing it.


MyUncleIsBen

Move out and experience life on your own as an independent person?


HotYoungBlonde403

you're a grown ass fucking adult. Make your own damn decisions.


Adventurous-Cry-2157

Why not take $500 of that money and hire a financial advisor? Find one you trust and let him/her draw up a financial plan for you based on your personal situation and goals. A few years ago, I received a substantial medical settlement, and the first thing I did was hire a financial advisor. I sat down with him and reviewed my situation, my plans, my goals, what I needed and what I wanted to do with that money. He had me pay off student debt, credit cards and medical bills, set some aside as an emergency fund (unexpected house repairs and such), place some in a Roth IRA, some in a savings account with a good interest rate, and the rest he invested for me. Once that was done, he suggested I use some money to buy a new car, for which I’d have a set budget for that I couldn’t exceed. I liked that idea, because I was still driving around my 17 year old VW Jetta lol. Then he told me to take $5000, plan a vacation, and spend every penny of that money on my trip. He told me I deserved a splurge like that, after everything I’d been through. Let me tell you, that was the best thing I could’ve done for myself at that time. Two weeks in Palm Springs and Joshua Tree, just relaxing in the desert, getting away from all the stress my life had become, was more beneficial for me than a year of therapy! He also made suggestions on how to manage my regular monthly budget to maximize my income, and advised what pitfalls to avoid in the future so I could stop myself from accumulating any new debt. That’s what worked for me - and is still working to this day, years later. He manages my investments and advises on new ventures. He helps me move money around and get the most out of it that I possibly can. I trust him completely to have my best interests at heart. Find an advisor like that and let them guide you on this. Your situation, and your amount of money, is completely different from mine, so obviously what works for me is not going to work for you. Also, bravo to you for managing at a young age to save up so much, and for recognizing how important it is to use that money as an investment in your future financial stability. It took me a lot longer to get to that point, so you’ve got a head start on all of your peers!


Not_A_RedditAccount

$50k at 6% from 25-60 is \~$400k. I believe the only reason to keep it in cash not mutual funds/ETF would be for housing. Housing is a high threshold to get in but if you're young and buy say a high bedroom house (4-5) and rent out bedrooms while also living there it could be very lucrative though definitely second job/a lot of extra work. If you're willing to deal with all this BS, there's money in it for you likely more than ETF's as suggest but remember this is a full time job and requires some basic knowledge about housing requirements and costs/repairs. For example my 3 bedroom house was $190k, we pay about $1800 all in for everything VS the $1400 for the 2 bedroom we were paying. I've amassed about $30k in equity in 3 years, which is more than $400/mnth in the price difference. Had we just rented out the 3rd bedroom for $500-600/mnth we'd be way way on top for that. Since your mid-high COL area you could likly get a 4 bedroom for 800kish. renting out the other 3 for \~ $1000/each. You'd likely be paying about $4600/mnth total, $3000 of which is gained rent given to you and $3300 being mortgage payments which 50% does to principal (1650./mnth) you'd be paying $1300 extra plus likely another $350 in extra power water etc. This would mean you living or rent cost is essentially replacing broken things + covering if someone moves out/the in between months and paying the principal only (net 0) I know housing investment is high risk and not suggested but you are young, have family support and it will teach you a lot and potentially give you a huge earning potential. The ETF route is the safest most consistent bet, so really it's up to your lifestyle.


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egganarchy

Thanks, I’ll look into that one. Do you buy them on wealthsimple?


Crater_Animator

I'm on Questrade, but Wealthsimple is even safer I believe if you lack the self-discipline and control to not take out the money once you put it in. Mind you, if you do their Wealth invest portfolios, they convert into US dollars then buy the US version of what I'm buying so they make profit as a company on the conversion fees. I'm just tossing my cash into the ETF myself saving on any fees that a robo-advisor might make profit off of my deposits. As always, do your own research! There really isn't any rush, there's always money to be made in the stock market, especially starting at a young age.


niravhere

hey I been in similar situation but with less amount of money. Keep communicating with your parents. There is a chance they will come to reason, but you should definitely invest. Others here gave you good advices on what to invest in. ETFs are nice. Like someone else said, regular people like us without financial background won't be able to properly analyze companies and pick the best ones. From what I read, I see you have some ideas for individual stocks. I know it is kind of semi-gambling, but you can put some small amount into them. As long as the majority is in ETFs, i think it is fun and interesting to check out some individual stocks, and see how they work out.


Sk0omaSteve

If you keep it as cash in a savings account, it will probably devalue because the rate of interest won't keep up with inflation. So sitting as cash not the greatest, but risk free. A mutual fund/ ETF would be a lower risk way of hedging against inflation.


AwkwardYak4

Instead of trying to invest it on your own, try floating the idea of seeing a financial advisor who can help you. Honestly, you don't want to be managing a stock portfolio when you should be studying anyway.


jddbeyondthesky

If you're going to just sit on it, dumping it all into a tfsa and from there into some dividend stocks will at least guarantee a better return than a savings account.


Buckminsterfullabeer

One thing you can do, after you've done your research, is to review the past performance of your chosen etfs vs. your parent's mutual funds with your parents - maybe over 10 years to capture downturns. While allocation funds like vbal/vgro haven't existed that long, their underlying funds have and have been retroactively modelled. Whenever I've done this, they've usually come out ahead, and the exercise itself will leave you better informed & with a stronger position. Now past performance isn't necessarily a predictor of the future, but at least it's an apples-to-apples comparison, with (ideally) similar risk profiles.


goleafsgo2323

Read books. Start with “The Value of Simple”


drs43821

Ok I'd say buying individual stocks are generally more risky than index funds because volatility and CP BMO AC aren't exactly bulletproof either. But not investing at all is even more risky for your financial success. If it's your money, you make the call, not anyone else.


SeaSuperb

It’s your money. Invest it all if you want. You don’t need to tell your family anything. I would suggest opening a self-directed TFSA account (save the RRSP for when you have a higher income) where you have low or no fees to trade. Buy a safe ETF with a portion of the money (you know your own risk tolerance). Then use another portion of the money to buy individual stocks with. Keep in mind that this will be all about learning. So, while you are learning your lessons, don’t invest anything that you aren’t ok with losing everything. Look up dollar cost averaging to help you ease your way into the market. Side note: it would be a great idea to set aside an emergency fund (3-6 months of expenses) in a high interest savings account.


superphage

Ahh, the costs of being a child never go away.


HamiltonMutt

Cool story, press the button and invest YOUR money. Unless they gave it to you?


Zebro26

Open a TSFA and put it into a broad market ETF or two. Your money is going to get ruined with inflation if you keep it in cash. At your age, that 50k will be worth 80 times when you are 65.


Maleficent_Drawer_82

Let 12k in a HISA. 10k for a car, you never know when you'll need it and 2k in case of emergency, you don't need more at the moment, living with your parents. Focus on TFSA, follow the rules. Canadian in a T-shirt is a good youtuber who explains the differents accounts. Start with 1k to 5k, then each week add like 200$ into your account. Investing with consistency is the key, because you don't know the future. Lot of people will say only invest into an ETF, it's true, but I personally feel confortable Investing in individual stocks. It's been good for me so far. Companies like POW, TD, BMO, CNR, etc are good companies to invest in. F#ck mutual funds, you'll get the same with an ETF, but with a lesser expense ratio. After a few months, show this to your parents and prove them they were wrong. Been there, done that. Now they think i'm a genius even if they were heavy on not wanting me to invest because "it's dangerous". Yeah, the stock market can drop (that's why Investing with consistency is the best way to go), but no way it'll crash to zero, it's impossible or it will be chaos everywhere.


jovahkaveeta

The stock market may very well crash tomorrow. No one can predict the future. What if another pandemic were to happen of a totally different virus. This might seem ludicrous but it's not as though it's impossible. There could be a number of things that could lead to a crash that none of us are seeing as of yet. That being said the potential for a crash occurring is not a good enough reason to avoid the market. Peter Lynch once said “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” I would tell you to invest in something like VEQT as a diversified portfolio avoids the idiosyncratic risk that comes with stock picking. Since idiosyncratic risk is not a compensated form of risk it increases your potential volatility without increasing your expected return. I would also say take a minute to estimate your future expenses. This will allow you to keep 3-12 months of expenses so that you have an emergency savings account upon graduation. I think that this is a good investment in the future as it avoids the potential for the need to take on future debt in the event of an emergency. Keep a bit for the used vehicle you need as well. Any other money that you won't need in the immediate future can absolutely be invested. The time horizon for when you might need/want it will determine your asset split. This is all just my opinion and what I think I would do given I was in your position. Oh and just a note that the TFSA limit is pretty low for someone who I am assuming is young given you being close to graduation so be sure to check that before making a large deposit. I would absolutely work on maxing that account first though.


AzuredreamsTX

Fuck your family, do what you need to secure your future.


shaihalud69

The market is absolutely not about to crash. The entire world economy has invested in ensuring that won't happen. Sure, interest rates are going to rise in the future to pay for stimulus, but that's it. But I suspect your parents aren't the types to be swayed by facts and logic. If the punishment for you investing money is for them to charge rent or kick you out, it may be worth it for you to just go ahead and do what you want to do with your money. Take everyone else's advice here about the investing itself (OK maybe not everyone lol) but at a certain point you have to draw a line in the sand when it comes to your autonomy as an adult. Also get your money out of the joint account BEFORE you make any moves, there's far too much risk there for you if they are narcissistic and vindictive. Again, worst case scenario they a) charge rent or b) kick you out.


gabrielvilaja

As a Canadian, you have access to tax sheltered accounts TFSA and RRSP. There are exemptions on pulling money out of RRSP for first time home buyer( could be very interesting for you) But both accounts allow for tax sheltered gains. Recently BTC and ETH ETF’s launched on the TSX, and they are eligible to be held in tax sheltered accounts (tax free crypto gains is a an unfair life hack that most of the Western world is jealous of atm)


wecandoit21

Also , you will never stop learning when it comes to investing. Wherter your learning new strategies, fundamentals, metrics, analysis and most importantly learning about yourself. Your physiological behaviour have the biggest impact in investing, especially at beginning stages


WooTkachukChuk

You are going to need that cash to set up your life. I highly suggest you listen to your parents and split the difference. Half to moving out and starting your life, half in the bank towards a downpayment. Everyone on reddit is so extreme, this is a true case of Enlightened Centrism, being the best approach.


learn_and_learn

What's your TFSA contribution room ? Working towards maxing it out with a globally diversified portfolio, either through a roboadvisor or self-directed with asset-allocation ETFs, would be a great first step. Open broker accounts and dip your toes :) I started my journey with just 10$ in a Wealthsimple Invest TFSA.


egganarchy

Thanks! Is wealthsimple better than questrade or others in your opinion?


learn_and_learn

Personally, I use both. When I'm buying US-listed ETFs or stocks, I go through Questrade and I convert my currency with a Norbert's Gambit. Much lower fees (<0.5%) than by letting WS Trade do the currency conversion (1.5% both ways) When I'm buying CAD listed ETFs or stocks, i go through Wealthsimple Trade (free of fees) As for their respective roboadvisor products, I've only used Wealthsimple Invest, haven't yet used Questwealth. For me, there are 0 downsides to having my money spread around a couple accounts. I aggregate all of my accounts in Wealthica to get the full picture.


mrbnlkld

Balanced portfolio is what you want, not individual stocks.


icheerforvillains

If you are dead set on investing with your parents blessing, then I would suggest proposing a plan where you make monthly contributions from that 50k into an investment account. Like 1-2k a month. Then you can talk about dollar cost averaging and not losing it all in a crash if it happens near term, and otherwise being able to participate in the gains with whatever you had contributed so far. Remember to use your TFSA. The uncontributed money could go into HISA or some short term fixed rate product.


applesauceblues

You should think. What is their motivation? Is it aligned with yours


ShamPow86

Your parents are idiots My house my rules doesn't apply to YOUR money. Do what you want with your money and don't let your parents tell you what to do with YOUR money. Why do they even know or have details about it. They have no right to know. Stop letting them control you.


ShamPow86

Follow the CCP investment strategy as it is low risk and proven to out perform mutual funds. They show their performance over the last 5 -10 years.


randalman73

1. Have an emergency fund of 6 months spending 2. Don’t invest anything you’ll need in the next 3 to 5 years. 3. Follow a buy and hold strategy 4. Have a diversified portfolio of at least 15 stocks 5. Don’t try to time the market. You, I and anyone reading this can’t. Markets will go up and down but who knows when? Doesn’t matter, long term the market will go up.


slappedsourdough

Personally I wouldn’t. We’re due for a huge crash very soon.


Buckminstersbuddy

You are young. There is certainty that either: A) there will be a crash in 2021 or B) there will not be a crash Both conservative and risk tolerant investors know that timing the market (e.g. wait till after the crash!) is a fool's errand. On your timeline even if it crashes the day after you invest it won't have an impact on a long term strategy. I lived through the dot com bubble, 2008 and 2020. I have learned more about investing since I started so returns are getting better but I never had any stress in those crashes. On reason: you don't lose money till you take it out at a loss and I was in for the long term. Awesome advice in these posts. Wish I had this available in the 90s!


TotalBismuth

> stocks that don’t seem to be too risky (eg CP, BMO, Air Canada) In the past, Air Canada stock has went to $0 before. The company was bailed out and survived, but the stock did not. They re-listed in the exchange some time later, but those previous stocks were still worth $0. I would say that's risky.


Sukhi099

VGRO and chill


lovelife905

the stock market could crash, it did in Mar. 2020. Why would a crash affect you if you have a long investing timeline 7 - 10 + years? You seem to have some immediate plans for some of the money (car, downpayment?) keep some of the money in cash in a high interest savings account or a GIC and then invest what you feel comfortable with in a low fee ETF.


CatchAKeeper

your parents are psychics wow impressive


bobbyflips

/r/JustBuyVGRO


Sorrow2382

So your parents can predict the future ? They must be billionaires


Bottle_Only

I'm huge on advocating the importance of investing to young people. S&P500 (SPY) has a 10 year annualized return of 13.55% while diversified all in one funds like vanguard growth opportunity (VGRO) has been doing around 9%. Meanwhile the buying power of cash perpetually falls. Personally only 1/3rd of my net worth has come from working, 1/3rd from long term investing and 1/3rd was a windfall on options which is likely not replicable. I believe millennials and gen z should/will have half their lifetime earnings come from investment. Start safe and commit to learning at any pace, even if it takes years or decades.


ConnorDZG

It doesn't matter if the market crashes in a year or two, unless your time horizon for the investment is very short. Dollar cost averaging smooths out a lot of volatility over years. So if you need the money within 3-5 years, choose an appropriately conservative investment. If we're talking over a decade, then adjust your risk accordingly.