If there’s 1 thing the analyst me could tell the broke and broken me of 10 years ago is that being an investor is not difficult. It’s a perspective shift.

I remember holding my son at the age of 2 having no idea how I was going to support him alone. His dad completely cleaned out our accounts and left me with the family debt before disappearing to evade child support obligations.

I was a desperate mother determined to learn everything I could to become a specialist in this complex, Greek letter laden language of finance. After all, this is what an investor knows right? So, I started learning how to speak Greek letter with the ultimate intent of teaching women like me how to better support their families. So, I went to work.

It took me 10+ years to learn that being an investor is not about knowing the technicalities of finance; how to structure a theoretical bond, learn to build a portfolio, the intricacies of the efficient market hypothesis etc. It was a “ruby slipper moment”. Everything I needed to know was inside of me all along; it just took me a trip to Oz to figure it out.

All the knowledge in the world doesn’t guarantee you financial success. What does (mostly, well almost completely) guarantee you financial success is doing “reasonably good things” for long periods of time. You don’t need a finance degree or an analyst’s designation to do that. You need just a little bit of confidence and self-discipline.

Just do it.

After realizing that you have all you need to get started, the best, and simplest advice I give anyone getting their feet wet is just to get started, and get started today. That’s all that makes you an investor; doing it.

You are now an owner, not just a consumer. Instead of buying the latest apple product, buy shares in Apple. What would you rather do, buy your kid a lego set or part of Lego – the company? This is what I mean by mindset. You don’t need huge amounts of money.

Diversification

Diversification in investing is the idea of not putting all your eggs in 1 basket. Baskets (and companies) break. If you put all of your money into 1 company’s stock, sure, it could do great, but you could also lose all of your money. I have learned this the hard way.

Instead, I always suggest investing in index funds. Indexes (commonly called ETF’s or exchange traded funds) track all of the top companies and spread your investment over them. If 1 of the companies in the “basket” fails, it’s not the end of the world for your portfolio. The idea is that the broader “market” has always gone up over long periods of time and if you get yourself into a good habit of investing every month little by little, and not touching it for many years it will grow. Small fluctuations up and down are inevitable, but in the grand scheme of things you want to set it and forget it (I’ll talk about the world of compounding another time).

Credit cards are not friends

Credit card debt is the devil. Clear these first if you can. You’re paying about 20% in interest on credit cards, so there’s no logic in investing into something that pays you 4-8% while costing you 20%. Do you best to pay your credit cards off in full every month.

Investment hype

Don’t get caught in the investment hype. Most of the time, in the investment world, when is sounds too good to be true it is. There is as a constant dance between risk and reward. If I’m going to put my money in a risky place, I better be compensated for it through the “chance of” a high return. “Chance of” is the key here. Sure, you could effectively double your money in a day, but a great expected return like that ALWAYS comes with obscene risk. There is a good chance you could lose everything. The greater the “expected reward”, the greater chance you could lose it all.

This was a simple introduction. The point I’m making is that the people who need the finance industry most (like us) are the ones who tend not to play. I want to change that. I will start teaching you the language of finance and get you identifying as an investor. But for now, just know that you CAN do it. You can and you must. 

Spend a little bit of time today learning about exchange traded funds (ETF’s). The Vanguard S&P 500 is a great place to start. Also look up “discount brokerage”. In Canada, Wealthsimple is a great one. Open an account. Choose an amount, whether $50 or $5000 (I know right?) per month that you could reasonably commit to investing into one of these funds.