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How to start investing

Ask yourself some basic questions about your goals, financial situation and risk tolerance to determine how investing can work for you.

By ATB Financial 10 November 2022 3 min read

What are you saving for? Whether you’re dreaming of traveling somewhere new, seeing your kids off to university or stepping into a new phase of life after employment, investing creates endless possibilities. But how do you start investing?

The first step is simple: build up knowledge about yourself and your financial situation. An expert can always explain unfamiliar terminology, but only you can decide what your goals are, how much you can afford to invest and how comfortable you are taking risks.

We’ve compiled the top seven questions to ask yourself before investing. They’re questions an advisor might ask when deciding what investment options are best for you.

1. What is your investing goal?

Whatever you want to make possible, there’s an investment that can help you get there. Identifying your intentions at the outset will make later decisions simpler, and will help a financial advisor recommend the best course of action for you and your needs.

2. What is your timeline?

When do you want to meet your goal? Investing for something you hope to achieve in two years will look quite different than investing for your retirement 20 or 30 years down the road.

3. How much can you afford to invest?

Once you’ve deducted your basic monthly expenses from your monthly income, how much do you have left over? You get to decide how much of these “left overs” will go toward immediate wants, and how much you’ll invest for the future.

Use our budgeting worksheet to simplify this process.

4. What is your risk tolerance?

Many types of investments are characterized by their risk factor. Liquidity, industry sector, credit worthiness and maturity that can determine how likely an investment will be impacted by market volatility, and the likelihood of gains or losses in any given situation. 

While the idea of risk can apply to your financial ability to handle ups-and-downs, there’s also an emotional element. How will you feel if the value of your investments takes a temporary dip? Will you be comfortable staying the course and giving them time to recover? 

You know yourself best. Whether your comfort level for risk is higher or lower, what matters is that your investments work for you.

5. Do you need access to your invested funds?

Some investments allow you to withdraw funds quickly and easily, making them ideal if you feel like you have to choose between investing and maintaining an emergency fund.

6. Are you hoping to use investing to get a tax break?

Some investments are registered through a government program, offering you the ability to either defer income tax on the money you invest or avoid paying tax on the interest you accumulate.

To learn more, read our article on the difference between RRSP, TFSA and cash accounts.

7. How do you want to manage your investments?

Online or in-person? Independently or through a portfolio manager? How you’ll track and make changes to your investment portfolio can be a conversation to have with a financial advisor. Whatever you decide, our advisors are available Monday through Saturday to go over your options at no charge.

Now is the time to start

Once you know the answers to these questions, you can take the next step in investing. There are many ways to personalize investing, both online and with an advisor. 

Whether you go with a financial advisor or online investing, select an investment provider that offers the advice, experience and customer service that best suit your financial goals. The choice is yours.

If you weren’t able to answer all of the questions, that’s okay. Our advisors are here to provide the expertise you need throughout your investing journey and find solutions that suit your needs.

Interested in learning more about investing and reviewing your options? Call our Wealth Advice Centre at 1-855-541-4387.

Become money minded.

Grow your financial knowledge with resources built to answer your questions. This short quiz is a great place to start.

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