We asked: How do you start investing with just $500?

Jan 31 2020, 5:42 pm

Do you ever dream about the things that you could do if you had more money? We’re not talking about the six digits that come with lottery winnings, just enough to cover a dream vacation or a new car — without dipping into your monthly budget.

In reality, you could stare at your bank account balance and simply wish for financial growth — or you can take action and have your money do some of the work for you by investing.

You don’t need to have $50K saved to get started. In fact, you can get going with just $100. But you don’t have to take our word for it; we’ve teamed up with Jeannette Jervis, the Director of ATB Wealth Advice Centre, to get you the need-to-know answers.

First things first

Goal setting/Pexels

Instead of simply investing on a whim, Jervis suggests asking yourself if you have enough cash flow to start. If you have some debt that you’re not in a position to repay, should you be investing? Once you determine this, you need to understand what you’re saving for.

Jervis says it’s important to outline your short and long-term goals. “Typically, investors choose to save for the short-term for things like three months of expenses in case they lose their job, a vacation, or just a rainy day. Longer-term goals are more for children’s education, retirement, or a home purchase,” she explains.

The amount of money to have saved before investing differs for everyone depending on their goal. “Even a little bit of money saved towards a goal is better than no money saved towards a goal.”

How to invest with $500

When you’re ready to invest, you can begin with any amount. Let’s say it’s $500 in this case. First, Jervis recommends heading to the ATB Prosper website to answer the online assessment and determine what type of investor you are, and to clarify what you’re saving for — whether that’s a down payment for a home, retirement (it’s inevitable), or a rainy day.

“Be honest with the seven questions. It will help you determine how much risk you want to take on the investment, and help you to understand what type of investor you are. Based on the answers you provide, it [ATB Prosper] will recommend a suitable mutual fund portfolio for you.”

Know the market

As a first-time investor, understanding exactly how investments grow (and shrink) can be a learning curve. Jervis says any investor can expect fluctuations within their portfolio, at any time. Why is this? Well, there are many factors that weigh in as to why the stock market has its ups and downs.

To protect yourself from these fluctuations, the financial expert suggests choosing a portfolio that matches your personal tolerance for risk. “ATB Prosper will recommend a well-diversified portfolio with the appropriate asset allocation that matches your tolerance for risk.”

High risk, high reward?

Okay, so we know fluctuations happen. Now you need to consider just how big of a storm you’re willing to ride out.

“If you are more risk-averse or have a shorter time horizon for your goal, ATB Prosper will recommend a more conservative portfolio,” Jervis explains. If you’re looking at more longer-term goals and you can tolerate more risks, as well as the ups and downs within the market, ATB Prosper will recommend a portfolio with a higher allocation of stocks that allows for more growth of the investment (and with more risk).

And, while ATB Prosper doesn’t offer stock trading opportunities, if this is something you’re interested in, Jervis says to be sure to do your research before investing.

If $500 is too much, start with $100


Inspired to give investing a go in 2020? Jervis says you can open an investment account (RESP, TFSA, NON-Registered, RSP) with ATB Prosper for as little as $100.

You can also make monthly contributions for as low as $25 per month. With ATB Prosper, you’re not charged registered account fees, and you’ll get a portion of the portfolio management fees refunded back to you each year via the Prosper Bonus. Plus, the ATB Prosper app lets you manage your funds efficiently on the go.

It’s quick and easy to start small with investing for your future, and ATB Financial is here to help. Visit ATB Prosper to open an account and put your money to work.

ATB Wealth consists of a range of financial services provided by ATB Financial and certain of its subsidiaries. ATB Investment Management Inc., ATB Securities Inc., and ATB Insurance Advisors Inc. are individually licensed users of the registered trade name ATB Wealth. ATB Securities Inc. is a member of the Canadian Investor Protection Fund and Investment Industry Regulatory Organization of Canada. ATB Prosper is a product of ATB Securities Inc.

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