Do Young Investors Really Have to Risk It for the Biscuit?

Investing is a powerful tool that can help you grow your wealth and achieve financial goals. It can provide opportunities for your money to work for you. However, it’s not as simple as putting money into the market. It’s important to educate yourself about the world of investments and understand your own financial goals and mindset. As a young investor, now is the best time for you to start learning and investing.

In this episode, we welcome Parween Mander, founder of WealthyWolfe.ca, to the Half Banked Podcast to share her insights on starting your investing journey. As an accredited financial counsellor, she helps us understand the world of finances and investments from the lens of women with immigrant upbringings. We dive into understanding risk tolerance, investing methods and the importance of education about investments.

Join us in this episode to find out how to start your journey as a young investor.

Here are three reasons why you should listen to this episode:

1. Understand the investing journey through the lens of young investors, women, and people with an immigrant upbringing.
2. Learn about risk tolerance and other must-know information about the world of investing.
3. Overcome your fear and uncertainty by building your confidence as a young investor!

Resources

• Live a richer life today with Money.Ca
• Visit Wealthy Wolfe, founded by Parween Mander

Answer your money questions on money.ca 

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Transcript

Parween Mander: If you log into your investment portfolio, if the balance has gone up, we don't have to be excited about that because it doesn't mean anything. Same thing, the balance has gone down, it doesn't mean anything, unless you choose to take action, unless you choose to sell at a loss and make that a realized loss or sell out at gain and earn that profit.

Bethan Moorcraft: Young Canadians are some of the most avid investors around.

Cadeem Lalor: Three-quarters of Gen Z here own at least one investment. According to data from the CFA Institute and FINRA Foundation. In China, the US, and the UK, it's closer to half.

Bethan: But the data shows that young Canadians might be risky investors as well. The most popular investment they're starting with- cryptocurrency.

Cadeem: Not exactly the most stable, tried and true asset. 

Bethan: So are new investors taking on too much risk? Or is that just what you need to do today in order to make it in the face of today's financial challenges? I'm Bethan Moorcraft.

Cadeem: And I'm Cadeem Lalor.

Bethan: And this is the Half Banked Podcast brought to you by money.ca.

Cadeem: To help us get more comfortable with all this risky business. We'll be speaking to a Vancouver-based financial counsellor who built a net worth of $200,000 by the age of 28.

Bethan: Parween Mander, she's an Accredited Financial Counsellor and certified Trauma of Money Facilitator, as well as the Founder of the Wealthy Wolfe. Inspired by her own South Asian upbringing, she now focuses on helping women of colour from immigrant backgrounds achieve greater financial freedom. Parween, welcome.

Parween: Thank you so much for having me, Bethan and Cadeem, excited to be here.

Bethan: Oh, we're very happy to have you on the show. So, Parween, you've spoken publicly about almost losing your home when you were younger, and the fear that was instilled in you. You say on your website that you were frugal, and you saved the majority of your money and really hated to part with it. How did you go from someone who was afraid to spend their money to becoming a confident and successful young investor?

Parween: Ooh, it’s a good question. I would say it took a lot of psychological work to unpack what was money trauma that occurred during my upbringing and understanding the true impact of the scarcity mindset on my money behaviour. So things like that frugality with, parting with the money. So I couldn't really even enjoy Starbucks coffee without feeling guilty. And so really understanding the impact of empathizing with myself that I was overly exposed to adult financial matters at a very young age as the eldest daughter in an immigrant household and how that played out in these money behaviours. 

In terms of the strategy that I used to really start to let myself enjoy my money was having a separate spending account. And so every time I was paid for my nine to five, I put in a few $100 into a separate spending account. And then I was like, “okay, Parween, your savings goals, money went that way. Your investment goals, your money went that way. So this is money that you can spend now guilt-free.” And it was only when I started to implement that system that I started to loosen the reins a little bit and starting to feel comfortable. I can enjoy my money. I don't need to be stuck in that anxiety and frugality mindset.

Cadeem: Perfect. I mean, you touched on also being the eldest daughter in an Indian household. I'm wondering in terms of investing, were there specific hurdles, or manners you kind of fell into due to that immigrant background? And ones that you see perhaps clients go through as well?

Parween: Yeah, absolutely. I think this idea, as a daughter of immigrants. I always witnessed my parents work hard for their money. It was always that they had to trade their time for money. And with investing, it's very much the opposite. You invest your money and then you don't actually have to do anything actively. It grows for you. And so that was a concept that I think I struggled with to understand, which is that I thought in order to gain wealth, you had to work really hard for it and work long hours. 

Another thing too, is that specifically within the South Asian community, investing in the stock market doesn't really necessarily exist, I would say. Our elders, people, our community, that's not what they did. Instead, it was more things like real estate or gold which are both sort of really hot commodities, but also really expensive to enter especially as a now millennial or being part of this generation. And so even as having the capital, the sort of money to get a real estate investment or any of these things is really difficult. But what I see with a lot of my clients is that they're so heavily focused on saving for that downpayment, trying to get that first, “investment,” without truly realizing the cost of homeownership and the idea of investing in the stock market isn't as appealing.

Bethan: That's really interesting. I like what you said about kind of learning to enjoy your money and splitting it between two accounts. One that you put towards saving living expenses, etc, and another that you use to invest. Just wondering, do you remember, once you made that decision, the first thing that you invested in or the first investment that you made?

Parween: Yeah, I had started with a robo advisor called Wealthsimple and I'm not promoting them by any means, but they were just the first ones that I started with. And so I opened an account with them. I opened a TFSA which is a Tax-Free Savings Account, which is a tax-sheltered account. If you want to start investing, your first step is to open a tax-sheltered account. Well, that's the TFSA, or the RRSP, the Registered Retirement Savings Plan. 

And so I opened up a TFSA. And then essentially, I picked my risk tolerance. Typically with robo advisors, they already have pre-built portfolios of investments that you can invest into, which makes it very, very easy as a young person to get started with investing because I don't have to pick who I'm investing in. So I was able to pick a very diversified stock portfolio. I think I chose the balanced portfolio. And that's where I started my investing journey with.

Cadeem: So I was wondering, you know, you talked about starting places, but for Gen Z, about 35% of them, the most common investment that they have is in crypto. So how do you feel about crypto as a starting place?

Parween: Oh, I don't love it. I don't love it. I think the volatility of crypto makes it a really difficult investment, to begin with. I think, in the age of social media and the age of the sensationalism around crypto in the crypto “boom” has sort of led to this idea that it's the way to go to grow your money the fastest. But when it comes to investing and investing for the long-term, it's actually supposed to be quite boring. And it's also supposed to be sort of a slow wave. Your investments will go up, they'll come back down, they'll go back up, they’ll come back down. That is the natural cycle of the stock market and has been for the past 100 years. 

And so I think understanding that true investing, strategic investing, is quite boring but also strategic and the safest for you in the long run. Versus crypto, which there is no regulation of what's gonna happen in that area. People have lost lots of money, or they're holding on to what could be remaining balances in that account when they could have just earned more returns in the stock market. And it's actually something I do see with my clients as well. I'll be reviewing their finances, they'll have debt, and then they'll have money in crypto. There'll be no money in savings. there will be no money in a TFSA or an RRSP. And so again, it's just where that information comes from for them? “Oh, so and so said I was supposed to do it or this person on social media said I was supposed to do it.” They just fell into the hype. And I think that is very dangerous.

Cadeem: So there is some info from a CFA FINRA study that shows for about 56% of Gen Z investors in Canada, the lack of knowledge is their main barrier to diving in. So with all that bad information around, it's easy to get sucked into that. Where do you recommend novice investors actually get started?

Parween: So you'll be starting with picking your tax-sheltered account, the TFSA, or the RRSP. I then always recommend to my clients who are just starting with investing to start with a robo advisor. And so depending on where you're based, whether it's the US or Canada, there are now multiple robo advisors available. So I will start there because again, robo-advisors take the guesswork out of investing, and on top of that they are a cheaper way for us to invest. I think we also need to kind of step take a step back here, which is people, when they think about investing, think they have to go to their bank and invest in mutual funds as the way to start investing. But that can be again, an expensive form to start investing because of something called MER, which is your management expense ratio. 

I'm saying these terms, and it may sound a little bit overwhelming, but it is also some important information to know before you dive headfirst into maybe walking into your neighbourhood bank branch and giving them your hard-earned money, right? And so with a robo advisor, it's actually a cheaper alternative in terms of that MER. It's easy to get started, and you will pick your risk tolerance. And so risk tolerance really refers to how much you can stomach personally in terms of riding the waves of the stock market. 

I want to reiterate that the stock market going up and down is a normal cycle, and has been for the past 100 years, I think a lot of fears young investors have is why lose my money if I invest in the stock market. And so let me really preach here the idea of neutrality, which is when you log into your investment portfolio if the balance has gone up, we don't have to be excited about that because it doesn't mean anything. The same thing if the balance has gone down doesn't mean anything unless you choose to take action. Unless you choose to sell at a loss and make that a realized loss, or sell out at a gain and earn that profit. But remember, investing is for the long term, right? And so we want to leave that money alone. 

So risk tolerance, again, is just how much you can stomach in terms of running up the weight of the waves of the stock market. You can go conservative, you can go with a balanced approach, or you can go aggressive. And so you just pick one of your portfolios, and then you just set up automatic payments into that account each month to be deducted and you're investing in the stock market.

Cadeem: So you mentioned risk tolerance. So how should young Canadians determine what theirs is?

Parween: I think the first thing is understanding what you're investing for, if you have specific goals for it, and what the timeline for those goals are. So things like retirement are ideally you know, 30, 40 years away. You have a lot of time to ride out the natural waves of the stock market. So you can afford to be more aggressive with that. Ideally, you should be as a young investor, be able to have a higher risk tolerance than that. But one thing I understand is that there may be some factors there that prevent you from being maybe comfortable with that risk. So maybe it's stuff from your upbringing, maybe it's certain money scripts that you hold. And so again, wherever you are comfortable to get started, let’s just get started. 

If it's goals that are like you want to save for a down payment or something that's maybe within a three to five-year range, that's money that I would say, you typically don't want to invest in the stock market for the sole reason that it's really unpredictable, where the stock market may be in that timeframe. So if you were to go pull that money out for a down payment, maybe the market is down. And so again, you are selling at that loss. When it comes to investing in money, and any money that you're putting into investing, it should be 10+ years away. Or over five years away, so that you have time to ride out any of the waves of the stock market.

Cadeem: So Parween for your early experiences, you've mentioned your saving method, and so forth. But then how did you go about really just dictating what your risk tolerance was? 

Parween: I think when I first started investing, I was really aware that it was a brand new territory for me. And so even though intellectually, I knew that as a young investor, I should be really aggressive with the portfolio or types of funds that I own. I couldn't stomach that. And so I just picked a balanced portfolio to determine and that sort of got my feet wet in the realm of investing. 

Another thing I want to stress here, which was a lot of my early 20s, and mid-20s, was saving for life events, such as my wedding or a downpayment. Because I knew I had those immediate goals coming up, that was money that I kept out of the stock market. That was money that I did not invest because I knew I needed to have access to that right away. And so that also made me feel comfortable with investing. Because whatever I was putting aside into my TFSA, that’s what I started with, it was money that I actually didn't need access to.

Cadeem: So although we have been advocating for kind of slow and steady, I'm wondering, do you have any regrets about not being more aggressive with your investments when you were younger?

Parween: That's a good question. I think yes. When I look at the value of my portfolio, I would have been like, well, had I been more aggressive, this probably would have been a higher balance today. And just from a purely numerical standpoint, that would have benefited me. However, when I think about where I was emotionally, and mentally in my 20s, and just dealing with the idea of investing, and getting comfortable with it, I think that was the right call for me at that time. 

So I wouldn't say I necessarily have any regrets. I think more so maybe what it did was really solidify that idea that I've already been investing for five years now. And I'm going to continue with the same long-term strategy. I can afford to be more aggressive. And it actually makes me more excited too. I don't think I have as much fear when it comes to investing. I'm very, very comfortable taking on a higher risk tolerance because I've spent so much time in the market and educated myself because I got started a lot earlier. So that I got a lot more comfortable and built that confidence for myself.

Bethan: Have you found that some of your clients come at you with some of these regrets in terms of “I didn't start off with enough risk, or I started off too aggressively?” What do you hear from clients?

Parween: It's very much a mixed bag. I hear a lot of while I did invest, but then I lost my money and then I just took it all out, and I haven't been back in. And so again, the education piece of understanding how the stock market actually works, and so that we can actually just stay consistently in the stock market. Another thing too, is that a lot of my clients fell into the need to individually pick stocks, “so I hold Apple.” Or one of my clients, she lost about half of her portfolio because she invested in this one stock that she thought would do really well. 

And so I think it's understanding the different risk tolerances, but also the different methods of investing. And recognizing that we don't have to pick one stock, we don't have to pick a couple of stocks. You don't have to actually do that actively. Strategic investing means you're investing in thousands of companies all at once through things like robo advisors that are already established for you. 

When it comes to risk tolerance, as long as you're going about it in a way where it's a pooled amount of investment, there's all diversification. That's a different conversation when it comes to risk. Then it's like, yeah, you can probably afford to go from conservative to balanced or balanced to aggressive. But if you're starting as someone that has maybe not great experiences with investing in a stock market, because your education, the knowledge piece wasn't there, I do see mistakes with just taking on too much risk in putting all their eggs basically in one basket.

Cadeem: So speaking of too much risk, with some of the financial challenges young people face today. There's debt. It could be student debt. And then so forth it could be possibly being a bit house poor. There's dealing with inflation, maybe stagnant wages. Does all of that in your mind make accepting a bit more risk, kind of more necessary nowadays?

Parween: I think when we think about that question from the angle of, okay, the money that you're investing is separated from your daily living expenses. You're not reliant on it, I think that's the key difference here. Then yes, there is an argument that the economic times we've been in today has that push to be like, well, you can afford to be more aggressive because inflation is just going up higher and higher. Or it's staying at these rates and it's making it more difficult to earn a living and all these things. So I would say that argument does exist. I think that's the real power of investing which is that your money grows and outpaces inflation, versus you just trying to save every dollar and then ultimately lose purchasing power and time.

So there is an argument to be made, I think. Given where everyone's at with their finances today. If you are living paycheck to paycheck and maybe can't even put money into investing, I want to stress that is okay. That is okay to meet you where you are. But if you are someone that is able to start investing, now, again, the argument can be made that maybe we can go a little bit more aggressive. If that money is not needed within a certain timeframe, and you're not using as an emergency fund. All those things.

Bethan: Once a young person has kind of figured all of that out. They've nailed down their risk tolerance, and they know their financial goals. How should they then going about determining what kinds of assets they should invest in to achieve their goals?

Parween: Yeah, I think this is where working with a robo advisor takes a lot of the guesswork out, which is that you don't necessarily have to pick. And I think that's what keeps all people from entering the stock market, which is “how am I supposed to pick the best investments and the best stocks and the best sectors and the best countries.” Luckily for everyone is that's already done for you when you go with a robo-advisor route. 

But if you are someone that maybe wants to learn a bit more about what exactly am I investing in? How do I determine the differences between a balanced portfolio and an aggressive portfolio? Then you want to look at what's called the fact sheet for that fund. In that way, you can see a breakdown of the different sectors. Maybe it's at 20%, financials. 10%, maybe it's Canadian, or whatever it may be. 

You want to look at the breakdown of the sectors, the countries. And the main thing with investing is that you just want to be diversified. I think maybe a lot of people have heard this phrase, that you don't want to put all your eggs in one basket. And so diversification means that you are owning thousands of companies, and a wide range of sectors or countries to spread out that risk. And so that's one way you can start to do that. Just looking at the fact sheet or the specific breakdown will give you what some of these funds your robo advisors are offering.

Bethan: That's good advice. Thank you. Hold on to that thought, everybody. We're just going to take a very quick break to hear a message from our sponsors.

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Bethan: Especially in the last few years, since the pandemic, there's been a lot of scary headlines. Talks about recession, inflation, and rising interest rates. A lot of things that people may not understand completely, number one. And number two, they look at it and think, “Oh, that's scary. I'm just going to put my money in the bank and put it in my savings account and then I'm done.” Have you noticed changes in terms of how your clients are thinking about investing with all of these kinds of big themes in the background?

Parween: Yeah, I think one thing that kept coming up for a lot of my clients last year was, “hey, a recession is coming so I'm just gonna wait until we hit the bottom.” And this is a mistake a lot of people make, which is that you think you can time the market. Like, “Oh, this is when it's going to drop, this is what's gonna go back up.” But I think as investors, we need to release some of that control that we think we're going to have with the stock market because it's completely unpredictable. 

And so some of my clients actually missed out on grabbing securities at a lower price point, because they just kept holding on and waiting for what this sensationalized recession, or these headlines that kept saying certain things. And so as an investor, you actually really want to tune out that noise to the best of your ability, and you want to take part in something called dollar cost averaging. 

So if you're someone who started investing, and you have a certain amount that you put aside each month, just the fact that you're able to put that aside every two weeks or every month on some sort of consistent basis, you're doing something called dollar cost averaging. And so one month of the stock market might be a bit of a high and so you're grabbing those securities at a higher price point. A few months later, maybe it's a bit lower, and so you're buying these securities on average points. I think this idea is when you're just investing consistently, there's no need for you to time the market. And you also don't have to listen to all the sensationalized noise that all those newscasters have made.

Cadeem: That also touches on another interesting question how do you decide the right amount to save versus the right amount to invest?

Parween: As a money coach, something that's really close to my heart is cash flow management. And what I mean by that is really budgeting. A mistake I see with all my clients is that they overshoot what they can realistically put aside into financial goals like savings or investing or debt repayment because there were so gung ho to like just get those things done, but they're not adequately putting money aside for living expenses. Or acknowledging that there are certain things that want to buy themselves month over month. 

So when it comes to determining how much you need to put into those goals, I always say first start with doing a financial audit. So download your past three months of bank or credit card statements and start to highlight them in different categories like how much you typically spend on eating out, on personal care, on shopping, and on all these things. 

Get those numbers, and for the most part, it will be shocking while you go through the exercise. But the point of that exercise is that it tells you just realistically how much it costs for you to live your life and again, an opportunity for you to start maybe reducing some spending in some areas. But we need those numbers to back that first and then you can start making a budget. And then when you have that money adequately set aside for those expenses, and day to day living expenses, whatever is remaining is a realistic amount that you could put aside into savings or investing. 

Now, if you have more immediate savings goals, and this all comes down to timeline and priorities in terms of do you put more into investing or do yout put more into savings? It depends. So it depends on who you are, what your goals are, and what's going on in your life. If it is a down payment, if it is a wedding, maybe it's travel, and it's all these things that you want to prioritize for us, okay, maybe we're putting a little bit more into savings. 

And maybe we're starting with just 50 bucks a month into your TFSA or your investment account. The point is that there's no wrong way to do this, as long as the amounts are realistic. And on top of that, with investing, as long as you are investing. So as an investor, the phrase always hit. It's time in the market versus timing the market or time in the market over how much you're investing. So just investing any amount if you can get that in your 20s, or early 30s will set you up for that money to grow over time.

Bethan: Do you feel like Canadians are taking on enough risk? Too much risk? These young Canadians at the start of their journeys.

Parween: I think that's a good question. I don't want to generalize because obviously, I don't have any studies available to me. But I think based on what my clients are or who my clients are, I think most of my clients are very hesitant to invest. And because of that, they pick the conservative risk tolerance or the balanced risk tolerance. That's where they're comfortable with. 

I think another thing I mentioned here is that most of my clients are women. Women from an immigrant upbringing. And so again, there is sort of an embedded aversion to risk because of that. And so a lot of my clients, they need a bit more time with getting comfortable with the idea of investing and getting comfortable with the idea of like, “hey, if I put this money away, it might lose value.” Because of that, the main things is that my clients start investing, and we've talked about through kind of logistics and the education of how the stock market actually works. In time, maybe now that you've gotten comfortable, you can maybe switch things to a little bit more of an aggressive portfolio. 

I think Canadians or millennials do have the opportunity to take on more risk but with a big caveat of as long as the money that's for investing is not needed for any other aspect of your financial life. It's not money that you're banking on as an emergency fund. It's not money that you’re using to pay off debt. It's money that you can just keep to the side for the purpose of it growing.

Bethan: Yeah, it's interesting what you say about young women in my late 20s, and a lot of my peers, female peers, young professionals in Toronto, they all say the same thing. “We want to invest our money. I've got all this stuff and savings, but I don't know where to start. And I just don't really know what to do.” That seems to be the general message. So I said, “listen to Half Banked.” But it's definitely a very common theme. And I've sort of party to that, too. Do you have any thoughts on why maybe there is some sort of gender difference there between kind of young men and young women at this age because I think my male friends are probably a bit further along this journey?

Parween: Yeah. I think it comes down to the idea well, how money in general has been gendered in our society. Typically, it's like the men are the breadwinner. The men control the finances, they know what's going on with the numbers and women are supposed to take a backseat and they're not as capable to manage their finances. So I think when we have all those embedded narratives, it's gonna show up when it comes to the world of investing as well. 

And I think another thing, too, is also understanding that the world of investing when we see the representation of maybe who's working on the stock exchanges, all these things, these hedge funds, it's typically men, right? And so it doesn't really feel like a welcoming space, as women. And I think there's also this fear of like, “I don't want to make a mistake, I don't want to be stupid, or any of these things and all those things prevent women from investing.” 

Now, what's interesting is that a study has been done to show that women are better investors over time than men because they have more patience and they're not as quick to make self-investment or take rash decisions. So I think that's also something interesting that I found through that study. But I think it's also this idea that women are more than capable of starting to invest. You don't need to get the help or the advice of a male in order to do so. But again, it starts with obviously taking that first step.

Cadeem: So confidence is a huge issue. And there is a 2023 study by Cooperatives that shows that 26% of Gen Z as a whole or 18 to 44-year-olds are unsure basically. They're not confident in their ability to choose investments that will actually make money. So then you might be dealing with decision paralysis, if you're trying to start out. That lack of confidence. How do you go about building that confidence? 

Parween: You go about building that confidence by just starting with investing. When I started my investing journey in my early 20s, I had learned just enough. This is the platform. This is what it means to invest. This is what risk tolerance and diversification mean. Hey, a robo advisor, is someone that already picks everything for me. There are thousands of companies in this one thing I'm about to buy. And so that was not for me to just get started with investing. I think that's an analysis paralysis. 

I think we're in an age now where there are very millennial-friendly investing solutions, like the robo advisors, that's 10 to 15 years that those have really sort of popped up and become a formidable investing vehicle for a lot of people. But I think there's just a lot of fear still of like, what's a robo advisor? Should I not just go to my bank and just open a mutual fund? But people hear that that's really expensive. 

So you just get stuck and then you can be stuck there forever. Which is like, well, “I'll just do it next month, or I'll look into that thing next month.” You just need enough information to get started. And as a young investor, I think it's also the expectation that you might make mistakes. You might sell investments at a loss. You might get a little bit scared. But like I said, it's time in the market that's most important as a young investor. So if you can just begin $50 a month, $100 a month, right? Just get your feet wet. It's really really important as a way to build up confidence and evidence for yourself that you can do this.

Cadeem: So Parween, thank you very much for your time much appreciated. This is a great look at the mentality of investing. To have the sense of looking inward, not outward, your reasons and goals, is kind of the way of the buyer when it comes to investing as well. And also the idea that it's time in the market, not trying to time the market. Understanding it's a long-term process, and just be patient. And then also looking at how we can start with baby steps and how that is kind of enough sometimes if we feel like we don't have enough cash on hand to invest like we want to.

Bethan: Absolutely. Learned a lot of great lessons there between. So thank you very much, and lots of great takeaways there for our listeners. Also, go girl power! Thank you so much for joining us on the show.

Parween: Thank you for having me. I think it was a great discussion. So hopefully your listeners all got some key takeaways.

Bethan: Cadeem, what was your sort of biggest takeaway from that?

Cadeem: We have mentioned net worth by 28 was $200,000. And that's also without crypto. That was a very slow, balanced approach, which is very interesting to me, I think. Typically you hear numbers like that, that's going to be basically the tease for a video on TikTok by someone who's telling you about the latest NFT or whatever. So it was an interesting take from someone who was more of an accredited financial counsellor and also took her slow approach, mostly focusing on robo advisors.

Bethan: One thing that she said that stood out to me was, she was talking about some clients, and how they were investing in individual stocks. So you know, I bought stock X. I bought stock Y. I think that's the scary point that puts off a lot of beginners. Myself, certainly, if I were to go into a sort of online brokerage, and just try and pick one. Sure, I could do it, I'll read the information sheet, as she said, but you just can't guarantee when you put all your eggs in one basket, that that's going to be a good choice for you. That would be an aggressive move, in my opinion.

Cadeem: 100% Because I was thinking she mentioned that the client thought that would do well, maybe that client tried to look up news on new products and different business reports and so forth. There are things that can happen that are out of your control. I mean, we look at COVID as a whole for how it can affect investments.

Bethan: Yeah, exactly. I actually have a friend who sold their Tesla stock during COVID because there were all of the issues with the car industry, supply chain disruptions, shortage of chips, etc. And so everything was looking pretty gloomy. They sold their stocks. And then within a few months, everything was back to sort of record highs and they sold at a loss. We were talking in the garden, and it was one of those sorts “oh no, what have I done?” But that's one of those short-term decisions that people make that then you talk to your friends about it. And that puts your friends off from investing in the stock market because they think, “oh, well, Johnny just lost a lot of money by making one bad decision.” So it's interesting.

Cadeem: No, definitely, I feel like doing it properly, when you're picking individual ones almost becomes a bit of a full-time job in itself. I feel like that's kind of daily updating, kind of checking in on the market and so forth. And I feel like that just can add a lot more stress, especially if you're already sort of tight with money and then you don't have as much to put away. Because we also touch on the point where like any money you put there, should basically be money that you're okay with losing. And that's kind of like the old advice, I think, for gambling investing. But for some people, they might be trying to make more money off of it. Putting away stuff that they should not be investing in the first place and then that adds more stress to it as well.

Bethan: But the idea of losing money is always horrible. I would say that I'm quite cautious. It was interesting what she was saying about picking your risk tolerance and how she started off as quite a cautious investor as well. I do wish I'd been a bit more aggressive in the early days. But I also agree with what she said about kind of learning, getting into your comfort zone, and just being more educated about what you're doing will kind of increase that confidence and enable you to make more aggressive decisions with potentially more likely a better outcome. 

Cadeem: Yeah, I had to deal with that too. And I think a big piece for me was just starting earlier. That just motivates me to keep taking baby steps and not be discouraged that I can't do more at the moment.

Bethan: If you liked this episode, be sure to subscribe, rate, and review us on Apple Spotify or wherever you're listening to this podcast. If you want to get in touch with us. You can email us at hello@halfbanked.com

Cadeem: Special thanks to executive producer Samantha Eamon and producers Kevin Hamilton, Shane Murphy, James Battiston and technical producers Mary Alcober and Muhammad Tabish. This episode was edited by Lead Podcasting. Until next time.