Okay babes, let’s, like, totally talk money, because honestly, nobody wants to be, like, broke and stressed when they’re older, right? So, investing sounds super scary when you’re young — like it’s just old dudes in suits shouting on Wall Street — but actually, it’s sooo not.
But First Things First, Why Start Young?
Girl, time is your BFF here. Compounding interest is, like, the most powerful force in the universe (Einstein even said that, and he was a genius). If you invest $200 a month starting at 22, by the time you’re 60 you could easily have over a million dollars. If you wait until 32? You’ll have, like, half that. Time is literally money, the whole compounding magic thing means your money grows while you’re literally sleeping, scrolling TikTok, or sipping iced lattes.
So, like, what’s the move? There are tons of options, but the three most popular for young people are mutual funds, ETFs, and index funds — and, like, yes, they all sound the same but they’re sooo not. Let me break it down.
Mutual Funds
So mutual funds are, like, the OG of investing. Basically, a fund manager takes your money, combines it with a bunch of other people’s money, and invests in a mix of stocks, bonds, and stuff. The idea is that someone smart does the work for you.
But here’s the drama: mutual funds often charge, like, high fees (called Management Fees). Those little fees seem small but over, like, 20 years, they can steal sooo much of your gains. So if you’re young and don’t have, like, a million dollars yet, paying a manager to pick stocks might not be worth it.
ETFs (Exchange-Traded Funds)
Now ETFs are, like, the cooler, younger cousin of mutual funds. They’re also a collection of investments — like stocks, bonds, or commodities — but you can buy and sell them on the stock exchange just like a regular stock. That means they’re usually cheaper than mutual funds because there’s less active management.
ETFs are amazing for beginners because they can be super broad (like buying the entire Canadian stock market in one fund) or specific (like only tech companies, or only green energy). You don’t have to stress about picking single stocks, because the ETF already spreads your money around for you. Bonus: fees are, like, soooo much lower than mutual funds because most of them are passively managed, meaning they just track an index instead of paying expensive managers to pick individual stocks.
Index Funds
Okay, index funds are basically ETFs but without the trading part. Instead of being bought and sold all day, you just buy them once per day through your broker or bank, and they literally just copy an index (like the Toronto TSX). They’re simple, boring, and usually dirt cheap. And honestly? Boring is, like, good in investing.
Other Stuff to Know
- Stocks: If you’re feeling spicy, you can buy individual company shares. But warning: this is, like, high risk. You could pick a winner (like Tesla before it blew up) or a loser (ugh, MySpace vibes).
- Bonds: These are like IOUs from governments or companies. Safer, but way less exciting, and usually less growth.
- Robo-Advisors: If all this sounds exhausting, robo-advisors like Wealthsimple or Questrade will, like, do the work for you with automated portfolios of ETFs. Think of it as investing on autopilot.
- Cryptocurrencies, like Bitcoin or Ethereum, are super high-risk sexy digital assets that can swing wildly in value, making them exciting but way less stable than ETFs or index funds for young investors.
So babes, the bottom line? Investing isn’t about being rich right now. It’s about making sure Future You is sipping rosé on a yacht, not stressing about bills. Start small, stay consistent, and let compound growth do its thing. Seriously, your 40-year-old self is going to, like, thank you so hard.
XOXO,
Valley Girl News
Where wealth is, like, the ultimate glow-up.
