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Listen up Gen Z: How to invest as young person


Types of investment services available in Canada—a comparison chart

If you’re ready to take the plunge to start investing, here is a breakdown of the three most popular options: self-directed investing, using a robo-advisor and hiring a financial advisor. 

Self-directed Robo-advisor Financial advisor
Financial knowledge needed Intermediate to advanced None required  None required
Minimum amount required ~$5,000 to $25,000 $0 to $5,000 $1,000,000+
Fees Trading: $0 to $9.99Annual: $0 to $125Management expense ratio: ~0.30% to 1%, but can go up to 2% † 0.4% to 0.8% • Hourly rate of $250 to $500 • Flat fee from $1,500 to $5,000 for a plan• Fees of 2.0% to 2.5% of assets 
Use of registered accounts Yes Yes Yes
Portfolio  You create Algorithm-based build Human creates and manages
Your involvement High Low Medium
Human interaction and customer service None Rare Always

† Fees can also depend on the types of investment products purchased; for example, 0% for stocks and up to 2% for mutual funds.

Taking the DIY investor route

DIY investing is when you take on the responsibility of your assets by “doing it yourself.” DIY investing involves using an online broker. Here are the pros and cons for this style of investing. 


  • You can be in the driver’s seat when choosing your investments if you are comfortable with risk and have a solid foundation of investment knowledge under your belt. 
  • You’ll be able to tap into the lowest fees available on the market.


  • A big drawback is that you won’t receive any professional advice to help you reach your financial goals. 
  • You’ll need to keep your emotions in check, especially when the market goes south. 
  • You will also need to be cautious of making frequent trades or tinkering too much because those transaction fees can creep up on you.

Where to find an online broker: Here are the best brokers in Canada. Looking for model portfolios? Check out the Canadian Couch Potato too.

Going high-tech with a robo-advisor

A robo-advisor allows you to have investments without having to manage them, without the higher fees that are usually associated with hiring a professional advisor. Here are the pros and cons. 


  • You can be hands-off with your investments and let technology do it for you. 
  • It’s a great option for young investors who may not have acquired basic investing knowledge yet. 
  • Some robo-advisors don’t have a minimum amount to open an account, but some do require between $1,000 to $5,000.


  • The fees with a robo-advisor will be slightly higher compared to what DIYers use with online brokers, but they are more affordable than a financial advisor. 
  • Because it’s a laissez-faire approach, you won’t have much control over which funds your money will be invested in. 
  • Typically, there’s a select number of model portfolios to choose from and not much customization. 
  • Generally, you wouldn’t have access to a human with a robo-advisor, but some platforms offer a hybrid model where you can speak with someone during special hours. Know what access you’re comfortable with and choose accordingly.

Where to find a robo advisor: Here are the best robo-advisors in Canada.

Finding the right financial advisor 

If you think you would benefit most from a professional person you can talk to or meet in person, consider a qualified financial advisor. They have the education and experience to look at your investments more closely than robo-advisors or online brokers. But here are the pros and cons for advisors. 


  • They can manage complicated financial situations with specific goals, such as receiving an inheritance. 
  • You have the ability to ask questions about your investments. You can also have input into the investments that you hold in your portfolio. 
  • They can react to the markets and economy if you need them too. When the market starts lagging, they will help to keep you on track of your financial goals and help you avoid panic selling.


  • Since they provide highly personalized advice, their fees will be higher compared to choosing a robo-advisor or an online broker.
  • Typically, they take on high-net-worth clients, so hiring an advisor may be out of reach for some Canadians. Some advisors may have minimum investments of $250,000 or more. A fee-only advisor is an option, but they are generally limited to financial planning and investment “strategy”, so cannot advise you on the purchase or sale of specific securities.

Where to find one: Use the MoneySense Find A Qualified Advisor tool to help you find a list of credentialed advisors. Consider these questions you should ask when choosing a financial advisor.

What are the risks for young investors?

Are you the type of person who doesn’t like to see your portfolio’s value drop? Or are you someone who doesn’t bat an eye when you see your portfolio drop by as much as 34%? Remember March 2020

Well, if you are just starting out and getting your feet wet, it wouldn’t hurt to take a more conservative approach, which means taking on lower-risk investments, such as guaranteed investment certificates (GICs). Or you may decide to be more aggressive since you have decades ahead of you and want to add riskier but higher return assets to your portfolio, such as stocks. 

Bonds and GICs tend to be on the safer side, whereas stocks are more volatile, meaning the ups and downs could be concerning to investors. Stock investors generally need to have a long time horizon. Either way, generally a sound strategy is to have a mix of stocks and bonds to balance out your risk. Having many eggs in many baskets will help to provide diversification, so that any impacts will be softened and won’t affect your bottom line. 

4 questions young investors often ask

  1. Should I buy dividend stocks?
    Personally, I’m a big fan of dividend stocks because it’s a predictable way to earn income. Simply put, dividends are regular payments of profits distributed to shareholders. Let’s say, you owned Canadian bank stocks. Every quarter, you would receive an amount of money per share that you own. You can also enroll in a dividend reinvestment plan (DRIP) which takes those dividends and reinvests them by purchasing additional shares of the same company. Some enthusiasts keep track of their dividend income and take time to grow it. Some have the goal to live off their dividends during retirement.
  1. Should I buy bonds?
    Traditionally, bonds have been a low-risk investment because they tend to generate lower returns compared to stocks. Although bonds haven’t shown stellar results in the past few years due to interest rate increases (bonds go down when rates go up), it shouldn’t deter investors from adding them to their portfolios. In the long run, bonds help minimize the risk and provide stability when the market goes through a downturn. Plus, the interest rates are now more attractive. 
  1. Are mutual funds good for me?
    Mutual funds have been very popular among investors for the past several decades. The good thing is a mutual fund can hold many companies in one fund. However, ever since index funds and exchange-traded funds (ETFs) made it onto the scene, it now means that you can buy very similar diversified funds but for a fraction of the cost. That’s why mutual funds have been given a bad rep lately because they are known to have high fees that may not leave much return for the investor. Active mutual fund fees are generally higher than index funds and ETFs because they require a larger team and more research into which stocks to buy and sell than a passive option. If you’re looking for diversification and a simple way to invest in ETFs, a good solution is to consider all-in-one ETFs
  1. Are REITs worth it?
    A real estate investment trust (REIT) is a company that owns and may operate income-producing real estate or real estate-related assets. There are a few advantages when it comes to owning a REIT. First of all, it gives you access to invest in the real estate market without having to own physical property. Second, it provides a low barrier to entry since it requires significantly less cash since you are one of many investors owning the real estate. Lastly, this type of investment is a much more hands-off approach compared to being a landlord or real estate agent. REITs can also provide diversification and help to reduce overall risk.

Investing is a lifelong journey

Everyone’s investing journey is unique. Just because something works for a close friend, family member or a “finfluencer,” it doesn’t mean that it’s best for you. Choose the path that makes sense for your financial needs and current situation. 

Once you get started, investing can be a key part of how you grow your net worth and fund the lifestyle you want. Continue to learn about stock market investing through blogs, podcasts, YouTube and TikTok videos, but be sure they are from reputable sources. Once you know the investing basics it’s easier than you think!


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