Hey – thanks for stopping by to read about single women and investing! The third in the series of becoming a financially savvy single woman. This series is aimed more at lower income women. Women who are high income earners will probably have trouble relating.
Read Part 1: Single Women and Banking
Read Part 2: Single Women and Choosing Basic Financial Services
Some of us women are single by choice and others by life circumstances – divorced or widowed. Many of us are living a bare bones existence and don’t have disposable income to invest. Hopefully, we have a small savings account, but with interest rates paying out less than 1%, we need to find more effective ways to make our money work for us. When we invest, we want the value of our investment to increase and we probably want and need dividend income.
That little dividend income helps support my little family.
One of the steps to becoming a financially savvy single woman is figuring out how to invest money where it will grow faster than in a bank’s saving account earning half a percent interest.
With puny interest on savings accounts, it’s unlikely our savings are going to grow into anything substantial. We’ve got to do something else with that cash, and that means getting into the stock market and choosing investments.
Becoming an investor involves risk, so it’s scary.
And it’s tough. Most of us single women don’t make a lot of money. We struggle to pay our bills and if we’re lucky there might be a little money left at the end of the month to set aside.
We don’t want to lose any money!
Here’s the thing to remember about investing money: you only lose or make money on paper. Until you sell the stock, you’re not actually making or losing money. Just think of it that way.
In the Spring of 2020 I watched all my investments tumble in value. I didn’t panic and sell. Many of them have bounced back and some are higher now than when they were two years ago. It was sickening to watch, but I didn’t lose money because I didn’t sell. I only lost money on paper.
Most stocks you wouldn’t lose all your money anyway, but let’s pick on Sears. We’ve all shopped there. On April 17, 2007 Sears stock closed at $197.00, the highest it ever got. On September 3, 2021 Sears stock closed at .41¢. Today, November 22, it closed at a penny. It’s still being publicly traded because the bankruptcy isn’t complete yet and apparently hope springs eternal for some investors. Maybe that Reddit group will get ahold of it!
I don’t normally give stock tips, but I’ll go out on a limb here – don’t buy it!
What about paying fees to financial advisors who tell us where we should invest our money?
Who says we need one? Financial advisors are for the wealthy!
A couple of years ago the choices included the mutual funds at Tangerine Bank, but that’s dropped out of the picture. The Couch Potato now recommends asset allocation ETFs (Exchange Traded Funds) as an easy way to get introduced to investing. The account management balances the portfolios for stocks and bonds coverage. There are several companies offering these asset allocations ETFs with different allocations, depending on where you are risk wise.
If you’re in the states, couch potato investing moved to a new website: https://scottburns.com/
I recommend reading more about ETFs on the Couch Potato’s website to decide if this is the right investment product for you. If you’re considering mutual funds, you should lean towards ETFs instead. They are very similar products, the difference being ETFs are traded on the stock market and have lower management fees than mutual funds.
I have several ETFs in my portfolio creating dividend income for me.
I buy my ETFs and other stocks on an online Canadian brokerage called Questrade that gets high points for their low trading fees. It’s free to buy ETFs! Yay! So you can see why this is a popular choice for me. It’ll cost a small commission, around $4.99 to sell. Questrade charges a $4.99 trading fee to purchase stocks (that aren’t ETFs), and also about $4.99 to sell.
Investing to grow your net worth and/or create a dividend income is a big step to becoming a financially savvy single woman.
Invest your money yourself!
Yes! Did you know you can do that? DIY our investments!
There are a number of ways you can invest your money, but mostly it’s going to involve getting an online trading account so you can bypass the middleman financial advisor and stock broker and their fees. With an online trading account, you buy and sell the stocks you choose.
How do you choose?
When I say “choose” that means both the online trading platform and the stocks to buy and hold in your account.
It’s called research. And often in my case, watching what more experienced investors are doing and copying them.
Open an online trading account with Questrade
If you’re in Canada and interested in opening an investing account at Questrade – which I really recommend as you take the steps to become financially independent – please use my “refer a friend” code 415632012426909 when you sign up. We will both receive $50 in free money to trade on stocks! Yay! To qualify, you will have to transfer in at least $1,000 within the first month and make your first stock purchase.
If you have cash sitting around an investment account at your bank or credit union, you should consider transferring it to Questrade and actually start making money for you. Same thing if you hold mutual funds at your financial institution. Close them and transfer to Questrade where you can buy a low-cost ETF. Questrade has online forms to help you do this. And even better. If your financial institution dings you with a service fee for transferring out your money, send a copy of your statement to Questrade, and they’ll refund you that money into your trading account.
What a deal!
Here are a few places online that I used for guidance and advice when putting together my portfolio.
I lurk on the Canadian Money Forum where the users talk about personal finance, investing, retirement, and other topics. No charge to read or sign up for a free account to post and ask questions. Very friendly, encouraging group of knowledgeable savers and investors here. Even if you’re not investing in Canada, post your question and you’ll get answers.
I follow a few blogs and websites and get email notifications of new posts and newsletters.
I hope some of these links help you out with learning to DIY your money.
More posts in the Becoming a Financially Savvy Woman series
Part 1: Single Women and Banking
Part 4: Single Women and Busting Debt
Part 5: Single Women and Paying Bills
Published by Cheryl @ The Lifestyle Digs on November 22, 2021.