Most of us work hard for the money we have. It can be difficult picking investments for your financial portfolio since it’s hard to distinguish between a sales pitch and an investment consultant selecting a stock. Those of us who don’t have the requisite financial literacy will struggle to differentiate between the two. It has been said that you never get a second chance to make a good first impression. For the top financial advisors and consultants, it’s all about looking the part to convince investors to part with their money and invest in funds, ETFs, individual stocks, and the like. If you choose not to go with a traditional broker, there is always the default option of banks and their investment consultants.
Don’t Waste Money on High-Fees and Commissions
All of the aforementioned options are disingenuous, expensive and inefficient. For starters, there’s no point entrusting important work like investing to others who don’t necessarily have your best interests at heart. Traders and investors pondered long and hard about finding an alternative to brokerages and banks. Fortunately, it is possible to develop a basic understanding of the investment landscape and applying that knowledge for investment purposes. There are several terms given to personal investing, such as couch potato investments or passive investments. The best advice for anyone looking to build a retirement nest egg at low cost is this: educate yourself and take control of the reigns.
Depending on which investment consultant you use, you may find yourself subject to company bias. In other words, consultants may be promoting company-selected funds for their own ends. One way to avoid this sales bias is to use Robo advisors, non-bank brokerages such as Questrade and Wealthsimple to name but a few. The goal in all cases is to reduce your investment fees. Believe it or not, the costs of maintaining an account with a traditional broker can become exorbitant over time. The investment juggernauts of the world have billions of dollars’ worth of assets under their control, and they got that way by charging their clients through the roof. If you minimize your investment fees, you can use those cost savings towards your investments.
Making Financial Sense of Your Portfolio
In Canada, investors are subject to some of the highest fees in the world. Many brokers charge a variety of fees such as account maintenance fees, commissions on trades, minimum account balance fees, annual fees, trade fees and the like. Taken together, these can sum to a hefty figure – and it is certainly not beneficial to the client. Becoming a do-it-yourself investor does not require as much work, time and effort as the investment gurus want us to believe. A rudimentary understanding of mathematics is needed – ratios and probability – to make the right decisions for your stocks. Unfortunately, investing is not typically taught to us during our formative years in middle school and high school. Safe investments abound, and it’s not necessary to line the pockets of consultants and advisors when you can do all of this activity for yourself.
This topic is largely off-limits for many educators and even tertiary educators. We learn about the theory, but not the practical applications thereof. Fortunately, there are brave people among us, and YoungAndThrifty’s investing tips have saved the day for many Canadian investors and others around the world. Information like portfolio management, high interest savings accounts, portfolio makeovers, avoiding fees, bank versus non-bank brokerages, modern investing practices, dividend investing, self-empowerment and more are discussed at depth. These topics were taboo in society, but they are absolutely vital components of our well-being in a modern-day society. Financial stability is a core component of everything that functions in society. And it all begins at the individual level.