What’s the best time to start investing?

December 17, 2019

Contrary to popular opinion, investing isn’t just for monocled executives cackling into their Scotch. Nor does it involve pouring your hard-earned cash into a friend’s potato-peeler start-up. It’s actually a responsible way to grow your savings and be prepared for the future.

If you haven’t yet joined the investment world, you probably have an excuse. Perhaps you think that the stock market is too risky. That you don’t have enough money. Or maybe it all sounds too complicated. But here’s the truth: none of those defences would hold up in court. Let’s evaluate the most common fears about investing and unpack why they don’t stand up to scrutiny.

Investing is too complicated. Well, it certainly can be. But we’re not suggesting you become a high-frequency trader. That is complex. Instead, put your money into a mutual fund. A professional fund manager will spread your savings throughout the market, so you’re not depending on the fortune of a single stock.

I don’t know which fund to select. That’s okay. That’s not your job. Our suggestion is to reach out to Lawyers Financial, a brand of the Canadian Bar Insurance Association, which provides access to free financial advisors who can build a portfolio with your long-term goals in mind. The non-profit is exclusively for members of Canada’s legal community — that includes lawyers, as well as their staff and families — and it boasts a wide selection of quality low-fee funds.

It’s too risky. Many potential investors, afraid of losing their money, hoard cash in low-interest savings accounts. If you’re building a rainy-day fund, that makes sense. If you’re investing for the long term, however, that’s a mistake. “There will be periods of short-term volatility,” says Michael Holmes, a vice-president with Lawyers Financial. “But historically, markets have performed well in the long term.”

I don’t have enough money. “It’s a misconception that investing is only for the wealthy,” says Holmes. If you set aside a small amount each month — say, a few hundred dollars — it can make a big difference. The earlier you start, the better: the original amount will be compounded year over year, so you want it to grow in your investment account for as long as possible.

I’m too busy. If Salim Khot can do it, so can you. The family lawyer in London, Ont., started investing with Lawyers Financial in 1997. He didn’t have time to investigate every option, but his advisors had plenty of experience working with lawyers. “They knew what my struggles were,” says Khot. “I didn’t have to sit down and spend hours with somebody who, after hours, still wouldn’t get it.”

Because he’s self-employed, Khot was especially concerned with retirement. The advisors put together a package with everything he needed. “They did all the running around, so I didn’t have to take time off from my practice.”

Khot emigrated from India in his late 20s and didn’t start investing until his late 30s. Now 55, he wishes he had begun earlier. “If I could live my life again, I would start at 25.”

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