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This Padlet will explore different methods individuals can use to earn extra income and improve their finances. It will include various videos, images, and a reflection on the Padlet wall at the end, providing an overall summary and practical tips for financial growth.

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Earn extra $2000 per month in Canada | Top Side Hustles in Canada for Students & Immigrants

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This video explores various passive income streams in Canada, including dividend income, rental income, affiliate marketing, and creating digital products. It highlights the potential for financial freedom through passive income.

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How To Make Passive Income In Canada - 10 Passive Income Sources 2020

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This video provides tips for saving money on a low income. Key points include shifting one's mindset to focus on saving, setting up a separate savings account, budgeting to track expenses, reducing non-essential spending, and increasing your income through investment and seeking new opportunities. The video gives a very practical approach and recommends starting small and building good financial habits.

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How I Save Money on a Low Income In Canada (Money Saving Tips)

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The video covers how to wisely invest a $65,000 salary, which is an average canadian's pay. It begins by detailing the net income after taxes and deductions. This net amount is then split into essential expenses (like rent, groceries, and car payments) and other expenses (such as entertainment and investments). The video highlights the necessity of building an emergency fund before proceeding to invest. It recommends diversifying investments across stocks, bonds, and real estate, and also stresses the importance of regularly rebalancing your investment portfolio.

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HOW TO INVEST A $65,000 SALARY TO BECOME A MILLIONAIRE IN CANADA 🇨🇦 ? | Piyush Canada

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This website offers an extensive overview of passive income in Canada. It defines passive income and presents various strategies to generate it, such as investing in stocks, bonds, real estate, peer-to-peer lending, creating and selling digital products, and renting out property. The article also highlights the advantages and disadvantages of each method.

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12 Smart Ideas to Make Passive Income in Canada | Wealthsimple

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Passive income is the Holy Grail of the business world—it’s income that takes little or no effort to bring in. This is the kind of income people make without doing a large amount of ongoing work. It includes renting out real estate, selling digital products, or selling ad space on a blog.

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Rakuten is an online shopping website in Canada that helps users earn cash back on their purchases. It partners with various retailers, offering a percentage of the purchase amount back to users when they shop through Rakuten's website or app. The website not only highlights cash-back opportunities but also provides coupons and promo codes, which can serve as a great way to save money and improve finances.

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Shop. Earn. Get Cash Back. | Rakuten Canada

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This website on The Motley Fool Canada offers a guide for beginners on how to start investing in Canada. It covers the basics of investing, including setting investment goals, choosing the right investment accounts (like RRSPs and TFSAs), understanding different asset classes (stocks, bonds, ETFs), and building a diversified portfolio. The website emphasizes the importance of developing a long-term investment strategy and avoiding emotional investing.

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Latest posts by Steven Porrello ( see all)

Last Updated

How to Start Investing

So, you want to start investing in stocks. Maybe become a stakeholder in some of Canada's biggest companies? Capitalize on their growth and build long term wealth that will change your family's financial outlook?

But investing in stocks is a big decision. If you are like most Canadians, you may not know where to start. Will you manage your own stocks or let a robo-advisor do the work? Do you want to handpick them or pool your money with other investors in a fund? Buy-and-sell frequently, or "set-it-and-forget-it"?

If you don't have answers to these questions, don't worry-The Motley Fool helps thousands of investors just like you around the world answer questions like these every day.

Investing in stocks starts with the right knowledge. We'll take you through the basic steps to investing in stocks in Canada.

9 easy steps to start investing in Canada:

Let's break it down.

1. Assess your risk tolerance

Risk tolerance is hands-down the most important consideration when building an investment portfolio. In a nutshell, risk tolerance is basically an investor's capacity-emotionally and mentally-to stomach losses and handle negative movements in their overall investment portfolio.

For example, if you have a high-risk tolerance, then you can more easily brush off a period of negative returns. Losing thousands of dollars in a short period won't phase you-at least not as much as those with a low risk tolerance, who might sell out to avoid further loses.

The following are some risk profiles that you might find yourself more or less aligned with:

Conservative investor. You don't want to lose money. Period. Just the thought of market volatility makes you squeamish. You would rather put your money in slow-growing bonds and safe investment vehicles (like GICs) rather than invest it in stocks. You might be retired, a few years away from retirement, or in need of a large sum of liquid cash.

Moderately conservative investor. You're okay losing some money, but not anymore than 60% of your total investment portfolio. You would like to invest in some stocks, but mostly in companies that are large, predictable, and very stable, such as Royal Bank of Canada, Enbridge,and other blue-chip stocks. You might be nearing retirement, or you would like to hold-on to as much of your money as you can, while also capitalizing on some growth.

Moderately aggressive investor. You're okay losing money in stocks and other investments, even if your profile goes into the red. You want to capitalize on the upward growth potential of new, unfounded companies, but you also want some stability from well-known brands. You're likely not going to retire anytime soon and have some time to take risks with small- or micro-caps.

Aggressive investor. Losing money in the short-term is a part of your investment strategy. You know that short-term loses can be balanced out by long-term growth. You want to invest in up-and-coming companies that have exciting new products but little revenue to sustain their growth. You have little interested in well-known companies that have no upward growth potential. You're likely far from retiring and have plenty of time to balance out your loses with gains.

2. Choose Your Investing Style

Before you start investing, you need to decide what kind of investor you want to be.

Some people like to be very involved in their investments. Others prefer to step back and let others manage their money. While everyone approaches stock investing with different objectives, most fall into two big camps: active and passive investing.

Active Investing

Active investing is as DIY as you can get. You set your own objectives, then find the right stocks to meet (or exceed) them. You'll buy stocks through an online broker (as opposed to a robo or human advisor), and you'll most likely choose individual stocks over baskets of investments (mutual, index, or exchange-traded funds).

When done well, active investing can yield some extraordinary gains. When done poorly, however, it can lead to some disappointing losses.

Passive Investing

The passive investor wants to take advantage of growth, too, but they don't have the time or knowledge to do it by themselves. Even if they have the time to learn, they may not want to. They probably have better things to do than analyze the market.

Active investors might balk at this, but passive investors achieve long-term growth by using robo-advisors to manage their stocks and mutual, index, or exchange-traded funds to diversify them. They're fine with moderate growth, since they know employing a "set-it-and-forget-it" strategy will yield better long-term gains than anything they could do on their own.

Our Foolish Advice on Investing Styles

As a beginner, engage in active investing only if you have the time and patience. If you're too busy to spend hours on investment strategy, start with a more passive approach. You can always become more active as you learn more about stock investing.

As you continue to learn about investing, we do encourage you to become an active investor to better manage your finances.

3. Decide How Much You Can Invest

Most beginning investors assume they need a large lump sum to invest in stocks, but that's not true. What you actually need is the dedication to invest frequently and consistently, over a long period of time, ideally until retirement.

To be in that position, you should have:

a steady flow of income

enough money to cover your monthly expenses

extra cash for investing

Additionally, you should have a solid emergency fund, savings account of liquid cash that can cover three to six months of living expenses. Having an emergency fund will help you resist the urge to cash out your investments if you lose your job or experience a market downturn.

With these in place, you can decide how much to invest in stocks. The amount you invest monthly can fluctuate over time, sure. For now, you're just trying to establish a habit of investing frequently.

Can You Invest in Stocks with Little Money?

Yes. You can buy shares for as little as $10 (some even less). As you might expect, buying stocks with little money comes with some caveats.

Here are some things to keep in mind before you buy smaller stocks.

With little money, you won't be able to buy as many stocks as diversification requires.You might have trouble diversifying.

Certain stock shares and mutual funds have high minimum investments. As a result, your fund choices might be limited.Some stock investments (like mutual funds) have minimums.

You could get bogged down in fees and commissions. Investing a small sum may not be worth the cost (though nowadays low or no fee stock trading is becoming more common).

One way around these problems is to invest in a low-cost index fund or exchange-traded fund (more on these below). These funds help you diversify at a low price. Plus, they almost never have minimum investments.

You should have three to six months of expenses saved before you start investing. Realistically, you can get started investing with as little as $1,000. When you have more money to invest, you can slowly add to your positions over time.

If you're an active investor, you can start buying stocks you believe will be winners after doing the right research.

4. Pick the Right Kind of Stock Investments

Stock investing isn't one-size-fits all. You can buy stocks directly, or, if you want to take a passive approach, you can buy a fund (which essentially chooses them for you).

Let's take a closer look at these two approaches and see which is better for you.

Investing in Individual Stocks

The first option is the one most people think when they hear stock investing: buying an individual stock. If you're interested in buying individual stocks, find companies you believe will perform well over the long-term. Buy a share (or several) through an online broker.

Additionally, you need the time and desire to research, analyze, and pick out the right companies. If the thought of reading balance sheets and flow charts makes you yawn, you might want to invest in funds.

If, on the other hand, you're the DIY type who's excited by the idea of getting extraordinary gains after combing through companies and picking the best deals, á la Warren Buffet, by all means-go for it.

Our Foolish advice: Don't let big numbers alone guide your decision and don't be discouraged to take control of your financial future.

Always scrutinize the companies behind the numbers. Use an independent credit-rating agency, like A.M. Best, to analyze each company's financial standing. Additionally, look at their historic performance, especially during market downturns.

Investing in Funds

Mutual Funds

The most common type of fund, though not always the best, is the mutual fund A mutual fund is a collection of investments (stocks, bonds, and other assets) packaged under one price. Mutual funds allow investors to pool their money and buy numerous stocks, many of which they wouldn't have bought on their own.

Most mutual funds are actively managed. That means a financial professional is responsible for managing the fund's investment, rebalancing if necessary, and making sure the fund meets its financial objectives.

Because of this active management, mutual funds often have higher fees. In addition, the fund manager's frequent buying-and-selling triggers more tax events (read-more capital gains taxes). If your mutual fund has an excellent manager, the gains you receive may exceed the extra costs.

Index Funds

Index funds are somewhat similar to mutual funds: for one price, you get a basket of investments, which helps you diversify your portfolio and avoid market risks. But aside from being a basket of stocks, index funds differ significantly from mutual funds.

Exchange-Traded Funds (ETFs)

Like mutual and index funds, exchange-traded funds (ETFs) offer you the opportunity to invest in numerous companies, industries, and sectors for an affordable price. And, like index funds, ETFs operate under passive management, tracking an index rather than a fund manager's strategy.

But ETFs have their own twist, and it's in the name- exchange-traded. Like buying and selling stocks, ETFs are traded on an exchange. Unlike mutual and index funds, which can only be bought and sold the market closes, ETFs can be traded during normal market hours (4pm EST). For beginning investors interested in day trading, ETFs can give you a taste of both worlds: trade like a stock by day, diversify like a fund by night.

Just don't overlook the costs. Trading an ETF typically involves paying commissions. These are often low-ETFs are extremely affordable-but if you trade frequently, they can add up. And don't get too carried away with the day trading, either. Taking advantage of short-term gains might sound appealing (and if you do it right, it can be) but if done frequently it can hurt your portfolio's long-term growth.

RELATED: ETF vs Index Fund: Which Should Canadians Invest In?

5. Choose a broker

Once you've figured out which stock investments are right for you, you have to decide how to buy them. That's where a broker comes in. Brokers are intermediaries who connect you to stock exchanges, like the TSX. You give them an order, and they'll execute it on your behalf.

In Canada, you have three main options:

Online Broker

An online broker gives DIY investors a place to pick, buy, and sell individual stocks, all without the guidance of a financial professional. Because you buy and sell your own stock investments, you don't have to pay commissions to an broker, or someone who does the trading for you.

This is an offer from one of our affiliate partners. For more information on why and how we work with partners, click here.

Robo-Advisor

Unlike an online broker, a robo-advisor chooses and manages stock investments for you. When you open an account, your robo-advisor will gather information about you-your income, financial goals, and risk tolerance. Based on that information, your robo-advisor will build an investment profile designed to achieve your objectives.

Financial Advisor

If you would prefer a personal touch, hire a financial professional.

Some services offered by a financial professional include:

Financial professionals can be a valuable asset to your finances. They're especially helpful during a financial downturn: When you may be tempted to panic and sell your stocks, a professional can calmly remind you that holding is a better long-term strategy.

However, they come at a steep price.

Typically, financial professionals charge a percentage of your investment portfolio, or an hourly fee. And they may require a large investment portfolio-it's not uncommon for professionals to ask for a portfolio with at least six digits.

6. Open the right investment account

Inside your brokerage account, you'll find numerous investment accounts at your disposal, such as a RRSP, TFSA, or unregistered account. These accounts not only hold your investments, but they might apply certain tax benefits to your earnings, helping you save on taxes when you sell for investment gains. Though there are several accounts, let's take a closer at the three most common.

Registered Retirement Savings Plan (RRSP)

An RRSP is a retirement account that allows you to invest in most securities while also saving money on dividends and capital gains taxes. RRSPs come with two major tax benefits:

Tax deductions. RRSP contributions can be deducted from your taxable income. This could potentially put you in a lower tax bracket, thus helping you save on your annual tax filing.

Tax deferral. You won't pay taxes on investment gains, dividends, or other earnings until you withdraw money. When you withdraw, you'll pay taxes at your marginal tax rate, which, if you withdraw in retirement, should be lower than your tax rate in your working years.

RRSPs are best suited for Canadians in high-income brackets who expect to be in a lower tax bracket when they start withdrawing money. For 2023, Canadians can contribute up to 18% of their 2022 income (for a maximum of $30,780).

Tax-Free Savings Plan (TFSA)

RRSPs have great tax benefits. But they're not ideal for short-term goals, like saving for a car or a vacation. For these goals, you're better of with a TFSA.

Like RRSPs, investments held inside a TFSA are tax-sheltered, meaning you won't pay a dime in capital gains or dividend taxes. Your contributions aren't tax deductible, however, but you also don't have to pay taxes when your withdraw from your TFSA.

TFSAs are better suited for Canadians who want to use their investments to fund short-term projects, or who anticipate needing quick access to their investment money. For 2023, Canadians can contribute up to $6,500 in their TFSAs.

Non-registered accounts

A non-registered investment account is your basic investment account. It does not have tax benefits-like tax deferral on gains or tax deductibility-but it also doesn't have contributions limits, either. These accounts are better suited for Canadians who have maxed out their registered accounts or who want to engage in investing practices that aren't allowed in TFSAs and RRSPs (like margin trading).

7. Diversify Your Stocks

Diversification is the practice of investing in numerous companies, sectors, and even assets (bonds, commodities, real estate) to lower your portfolio's market risk.

When you diversify, your money is spread among several companies and industries. As a result, there's less of a risk that one company's downfall becomes your downfall, too.

What's the best way for Canadians to diversify?

If you buy any of the three funds listed above (mutual, index, or exchange-traded), you have nothing to worry about: your fund manager diversifies the stocks for you.

DIY investors who want to pick their own stocks, on the other hand, have a steeper task. One rule of thumb: buy individual stocks in at least 10 to 15 companies across multiple market sectors.

Don't miss that: multiple sectors. You might feel tempted to buy stocks in only the best financial companies, since the financial sector dominates the Canadian market. But all it takes is one recession to crush a sector. Multiple companies, multiple sectors: that's diversification.

8. Keep a Steady Eye on Your Portfolio

If your stocks have a great year, your asset allocation can become unbalanced. More money in stocks means, proportionally speaking, less money in bonds. To rebalance, move money from your stocks to your lower risk investments until you have the right ratio.

9. Invest Consistently for the Long-Term

Whatever your reasons for investing, remember-a surefire way to build wealth in stocks is to invest in great businesses and stay invested for the long-term.

Trust us: you'll experience quite a few market corrections and bear markets, maybe a recession or two (or three). You'll feel the temptation to abandon your long-term goals to avoid further short-term losses.

You may only have a little money each month to invest to start, but consistently investing a little bit every month grows over time.

That's the beauty of investing in stocks: you start out with a hundred, maybe a thousand dollars, and after years and years of investing, you look up and see you're near seven digits.

Advice for Beginner Canadian Investors

Canada has the strongest banking system in the world, and an equally strong resource market - not to mention some of the best tax breaks the stock investing world has to offer. Here are three ways you can start taking advantage of the Canadian stock market.

Open a Registered Retirement Savings Plan (RRSP)

An RRSP is a tax-sheltered retirement account. It allows you to contribute pre-tax dollars from your paychecks and let them grow tax deferred. That means you won't pay taxes on investment income inside an RRSP until you withdraw money from your account. The advantage of tax-deferral: by the time you start withdrawing money (ideally in retirement), your income will be smaller, your tax rate lower, and the taxes you pay significantly reduced.

Don't miss tax advantage opportunities

Dividends are basically a portion of a company's profit paid out to shareholders. If you own dividend stocks, you'll get paid (usually cash) quarterly, semi-annually, or annually. In Canada, many dividends are eligible for a tax credit, which reduces how much you're required to pay for taxes on dividend income.

Don't try to time the market
Online brokerage services are offered through Qtrade Direct Investing, a division of Credential Qtrade Securities Inc. Qtrade, Qtrade Direct Investing, and Write Your Own Future are trade names and/or trademarks of Aviso Wealth Inc.
Frequently Asked Questions

You must be 18 years old to start investing in stocks if you live in Alberta, Manitoba, Ontario, Prince Edward, Quebec, and Saskatchewan. If you live in British Columbia, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Nunavut, or Yukon, then you must be 19.

You can start investing with as little as $10, though larger amounts are preferable since you'll likely pay trading commissions.

How much you invest each month is totally dependent on your personal financial situation and investment goals. The goal is to find an amount you can commit to investing every month. Putting in a lump sum once and forgetting about it could pay off in the long run too, but your best bet is to invest something every month. Maybe that amount is $2,000 a month. Maybe it's just $10 a month. Whatever is right for you is what you should invest per month.

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How to Start Investing in Canada: 9 Steps to Success

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Latest posts by Steven Porrello ( see all) Last Updated So, you want to start investing in stocks. Maybe become a stakeholder in some of Canada's biggest companies? Capitalize on their growth and build long term wealth that will change your family's financial outlook? But investing in stocks is a big decision.

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Freelance is a website designed to connect Canadian freelancers with businesses seeking skilled professionals. It provides a marketplace for various freelance projects across design, IT, marketing, writing, and other industries. Freelancers can create profiles showcasing their skills and experience, while companies can browse through freelancer profiles and post projects for interested candidates. The website emphasizes finding high-quality project opportunities and facilitating collaboration between freelancers and businesses.

While there are many freelance websites available, this site specifically caters to the Canadian market. This means it focuses on connecting Canadian freelancers with Canadian businesses, potentially offering a better chance of finding relevant projects or hiring qualified local talent. Additionally, the website offers both free and premium membership options, allowing freelancers to choose a pricing plan that suits their needs.

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Projects for freelancers and independent professionals

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We connect companies with freelancers to create the best opportunities.

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The given picture lists different side hustles one can brainstorm and implement to increase their income. These side hustles range from various activities, allowing individuals to find their own niche and earn extra income to boost their finances. Many of the side hustles listed in the picture are very easy to start, such as taking surveys and doing photography, and can add to an individual's income.

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The image outlines 25 practical tips for saving money in Canada, organized into three categories: shopping, home practices, and financial management. It offers practical advice such as avoiding unnecessary purchases, buying in bulk or during off-seasons, cooking at home, budgeting, and making small investments. The tips highlight how minor adjustments can lead to substantial savings over time, like adjusting thermostats, utilizing cashback programs and also negotiating credit card rates.

I chose this image because it offers straightforward, relatable strategies for saving money tailored specifically to Canadians. A particularly useful tip is the suggestion to buy seasonal produce and holiday decorations during the off-season, promoting advanced planning which I had never thought of before.

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1. What did you learn about your topic that surprised you the most?

My topic, which focuses on ways to increase an individual's finances, was a great subject, and researching it enabled me to learn a lot of things. What surprised me the most was the vast amount of online resources available to educate and utilize by individuals who wish to save money and grow their finances.

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