Q

How do I start investing?

A

It depends on how knowledgable you are, and how much time you want to spend. You can do it all yourself. Or you can find an advisor — or a less expensive automated advisor — to get you started.

Perhaps you have a little pile of money and figure it should be growing. The best advice, because of something called compounding, is to start investing as soon as you possibly can. But how do you get started? There are three basic options. To do it yourself, you can open your own brokerage account. Brokerage firms are easy to find, and it takes just a few minutes to open an account. Though you will have to have your own investment strategy in mind and know how to execute it.

The second option is hiring a person called an investment advisor. It’s important to vet this person rigorously— you’re placing a lot of trust in them. The downside with advisors is that they make their living by charging you a fee for every dollar they manage, and those fees can be more than 2% annually. Take a cut out of whatever growth your investments make each year.

The third option is something called an automated investment service. These services, like Wealthsimple, are engineered to offer the benefits of a financial advisor — like building balanced portfolios and providing human assistance to get your plan going — but at lower fees than a traditional investment advisor.

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