Your podcast feed and Youtube stream are often interrupted by promises of dreamy retirements and passive-aggressive shaming about how you really need to get started saving.
Yup – it must be “RRSP season” again.
I have never liked RRSP season.
There is no logical reason why the date for which you can “count back” RRSP contributions – and get a deduction on the previous year’s income tax bill – should signify a “season” of any kind!
It’s high time that Canadians stop packing away their thoughts about money and investing at the end of every March, and then taking them out again at the start of every February. Investing is not like that half-broken artificial Christmas tree that never-quite-fits back into its box!
We need to start looking at our RRSPs, and investing in general, a simple process that you should pay attention to in small bursts throughout the year. Sort of like cleaning out your junk drawer or ordering new socks – except that it can make you a millionaire.
The 2-hour lowest cost way to do your RRSP right
I could lie and tell you that it will take you “30 minutes or less” to open a discount brokerage account & begin investing.
Truthfully, it’s possible to go online, read a Questrade Review, decide that it sounds good, sign up online, open your RRSP account for free – and then start investing – in under 30 minutes. It’s possible – but unlikely. There is a bit of digital paperwork involved, and you probably don’t want to start throwing cash around until you have some idea of how to buy a stock or ETF.
Please don’t be intimidated by this initial two-hour time commitment. It really isn’t that bad, and the good news is that once you put in that initial block of time, you can handle your RRSP investments in as little as 15 minutes per year.
If you want to fully understand the entire stock market, you might have to do a smidge more reading. If you want an award-winning, yet incredibly simple way to invest, all that you need to do is pick one of Canada’s all-in-one ETFs, and then re-buy it over and over again every few months until you’re ready to retire. It’s honestly that simple. These all-in-one ETFs are massive collections of bonds & stocks from all around the world.
The idea is that you’re not going to pay anyone a lot of your hard-earned money to go and do a really bad job of picking stocks. If you’ve watched this scene from The Wolf of Wall Street you know what I’m talking about. Instead, you’re going to pay a very small set amount (that is upfront and easy to understand) in order to buy a piece of almost every company in the world – thereby ensuring that you get exactly the average investment return of what all of these companies produce. When it comes to stock market returns, the average is great. Average would have more than doubled your money the last 10 years. The key when it comes to this math-supported lazy person’s way to invest is to understand that owning pieces of all of the world’s largest companies – while paying next to nothing in investment fees – is a good thing!
The 20-minute absolute easiest way to RRSP
If you read the section above and decided that it seemed like something that you might get to later – STOP!
Statistically speaking, you are unlikely to ever get to “later”.
You probably need an even easier way to invest. That way is Wealthsimple Invest. Wealthsimple is going to put your money in almost the exact same investments as the all-in-one ETFs that we just told you about, but they’re going to do it for you. You can even set up an automatic contribution system where you set your investing on complete autopilot.
Wealthsimple really does simplify everything about investing. Their online platforms are not only designed to be super simple, but also look really pretty, AND you can legitimately sign up in under 30 minutes. Now, you will pay a little bit more for that convenience (somewhere around 25% of what your parents pay their high-priced financial advisor) relative to the Questrade + all-in-one ETFs combo that we started with, but if that’s what you need to get your RRSP started, then it’s well worth it.
You’ve likely been hearing a lot about Wealthsimple lately (their ads are the least cringe-worthy out of the RRSP ads). This is because they have been adding new features faster than our Prime Minister changes his facial hair. Check out my Wealthsimple Review for more details on the company’s investing options. Wealthsimple isn’t magic, it certainly won’t let you get rich quick, and it doesn’t have a secret sauce. What Wealthsimple will do, is lower or take away all of the little barriers to getting started with investing – for a very reasonable price.
Don’t Fall Into the Paralysis by Analysis Trap
If your BS detector goes off every time you talk to a commission-hungry “financial advisor”, or you sometimes leave your bank branch more confused than when you went in, don’t discount your instincts. You’re not wrong to be highly suspicious of the financial industry!
But if you stop there and decide that this is a problem for Next Year You, you’re not doing that person any favours.
I get it. I do.
The path of least resistance is most certainly to put this RRSP thing on the back burner and worry about it “next season”. The problem is that the longer you wait, the harder this whole saving + investing thing gets. When you can get started for free, in as little as a half-hour, then there aren’t many excuses left. (Ok – if you’re in crippling credit debt, that’s a good excuse – but get that taken care of immediately and then come back and read this article.)
Next Year You is calling. They’re feeling guilt-free and are going out for a drink with friends to celebrate the fact that they just did they only have to spend 15 minutes on investing this year. They wanted to say thanks for taking two hours of time during this “RRSP Season” so that they never have to worry about seasonal investing ever again.