Earlier I had mentioned that investing your money is the start of becoming financially independent. Making your money work for you is the best way of spending your money. If your money is working for you, you will have more time to play video games.
But Murasa, I have no idea how to invest my money! Here’s a simple way of getting started.
** Note: This post contains a referral link that lets me get some nice benefits when you sign up. They don’t add any additional costs in order to accommodate me, the price you see is what you pay and I wouldn’t be recommending it if I don’t like it. Anyway, more info over at my Affiliate Disclosure page.
WealthSimple is a robo-investor that manages your investments. It diversifies your investments into many, many stocks. Traditionally, a person who knows way more about money than you or me tells your money where to go, but with robo-investing, a robot does this for you. Basically, by putting your money into many little egg baskets which runs around and does stuff for companies that own those baskets, your money is passively earning income! That sounds pretty great, doesn’t it? You also have the benefit of not talking to another person, which means more time playing games.
Usually, you start by going to your local bank branch and tell them that you want to open up an investment account. They’ll book you an appointment with one of their financial advisers and tell you what you can do. Their advice is pretty solid until you realize that they follow the old tried and true thinking around sticking to your good 9-5 job to get enough money to retire. Following this means you’re going to retire at 65! That’s not what you want to do!
I don’t deny that they give really good advice, but you have to also realize that they’re also working for the bank. The bank is interested in taking some of your hard earn bucks for their own! We want to really minimize this! WealthSimple actually minimizes this by charging you only their management fees; they don’t charge you for withdrawals, transfers or if you forget to put money in your new account (or close it after transferring out, leaving $0). In short, they only charge you 0.5% to your account based on how much money is in there. It’s so cheap it’s relatively free*.
* Well, that’s again based on how much is in your portfolio; which by the time you’re financially independent, this is literally pennies for you. Also, your money is working for you so you need to invest some to get some. Here is WealthSimple’s Management fee breakdown. Also, clicking on my referral link saves you from these fees for your first year! Talk about a deal!
Unfortunately, WealthSimple is currently only available in the United States, Canada and the United Kingdom. They do have a mailing list to let people know that they’re opening up business in your country!
If you’re in any of the countries above, let’s talk about getting started.
How to Get Started
First step is to make an account on WealthSimple using your email. Follow the prompts; they will require you to input your employment and your social insurance number (or taxpayer information number, whatever they use for taxes).
Once you create and confirm your account, then you will need to start answering their questionnaire about you. This includes stating how much debt you have, how much you earn, what will you do if the market crashes, etc. This will help WealthSimple figure out what your account will look like and the type of investing style. They will also go through the trouble of linking your bank accounts with your WealthSimple account if you provide them your information.
This is pretty simple and easy to do from your couch on your phone, or having it done on your second screen while you sit in respawn after you died in DOTA 2. They even have a mobile app on both Google Play and on iTunes!
You will be eventually greeted to a screen where you will be asked to create an account type. You can open all the accounts, but it’s best to start with one. Since I’m in Canada, I will recommend opening up an RRSP and a TFSA. Canadians, please look forward for my reasoning in a later post! If you’re in the US or UK, please do some research on what type of accounts are available. Fortunately, WealthSimple has provided Investing 101 pages for Canadians, Americans and Brits.
As always, I highly suggest doing your own research before deciding upon an account.
Now Give your Money to a Robot and Not Worry About It
Now that you have your account set up it’s time to tell the robot to invest your money into the great beyond. Your bot at WealthSimple works for you and mostly you. (We just have to pay the management fees as discussed above.)
Because we’re gamers, and we tend to handle money kind of frivolously, I will recommend doing an automated approach. WealthSimple can be set up to automatically withdraw money from your bank account at a timely interval and at a set amount you tell it to. As long you have money in your bank account, WealthSimple will withdraw your amount from the account and tell your dollars to do work. Easy!
If you also wanted to transfer an account over, that is also available to you. Not only that, if you do transfer another account over to WealthSimple, WealthSimple handles the transfer process very easily! And at no cost! They’ll do it for you! They can expedite the process (and with less errors) if you provide your information about the account to them.
It’s pretty easy to save!
WealthSimple proves to be a pretty simple way for people start investing. Especially with no initial investment, you can easily do it from the simple comfort of your couch. (Most financial advisers that aren’t with a bank tend to tell you that you need a really large portfolio (like $100 000) before they deal any business with you and banks charge you too much.) Once you set up automated transfers, you are well on your way of being free to play video games.
It’s just getting started in the right direction is hard.
Just in case you missed it, here’s my referral link to WealthSimple. If you sign up with my link, you will have your money managed for your first year for free (for real, no caveats)! Those fees do add up, and will multiply the longer you go. I’m just paying it forward and I wish you guys success.
EDIT: I found out that my link gives Americans $100 bonus for signing up. Please confirm in the comments below! For you Canucks and Brits, you still get your year free if you click!