# I just got $30 000 to invest in stocks. Need help on where to put it please!!



## jpajel (Oct 12, 2020)

Hi everyone,

Feels great to be part of this community and your feedback would be most appreciated. My mother today just gave me a $30 000 check for me to invest and grow for the long term. Only problem is that I'm fairly new to investing in stocks and I don't really know what stocks to buy especially during these times. I am also 38 years of age.

I currently have $10 000 in credit card debt and have a brokerage account already set up with Questrade. Does anyone have any good tips or stocks to purchase? If so, how many of each and what markets would you recommend. My friends tell me to buy Apple or Tesla since that is what everyone is talking about but I feel it might be for a short term gain. What do you think?


----------



## james4beach (Nov 15, 2012)

Hi there, welcome!

When you say there's 10,000 in credit card debt. Is that typically something you can pay off every month, or does the debt linger? If it lingers then I would strongly recommend using some of the gift money to pay off the debt and commit yourself to not building up large credit card balances. If you ask people on this forum you will see a pattern... most of us are extremely allergic to debts. I pay off my CC every month.

Since you're new to investing, I would strongly recommend being extremely cautious with individual stocks. It will take you a while to really learn how all of this works so keep in mind that you might make a lot of mistake in the first few years of investing. I lost a lot of money in my first few years of stock investing (many people do).

My suggestion: let's say with your 30K, you use 10K to pay off your debt and then have 20K to invest.

I would then take half of that, 10K, and invest in VBAL, which is a moderately aggressive passive all-in-one ETF. Buy it and then don't touch it again. You might ask, what is the reasoning for this? Well the reality is that many people who first dabble with stocks end up losing money, so it's possible ... after the years go by ... VBAL might perform better than your other investments. The other reason is that "active" stock picks tends to involve buying, selling, changing one's mind, etc. Keeping some money in something you can "set and forget" often works out better. It's kind of like protecting you from yourself.

But that's what I would do. Then proceed learning to invest with the other 10K, while leaving the VBAL alone.


----------



## AltaRed (Jun 8, 2009)

The OP has a lot more work to do to establish an investment plan before even thinking of investing in a product/asset/holding. Picking a holding is the last step in an investment process. Suggest spending some time on Finiki or if the OP thinks A-T steps can be skipped, perhaps go straight to Canadian Couch Potato

Oh yes, get rid of that CC debt if ANY balance is being carried over.


----------



## jpajel (Oct 12, 2020)

Yes, this credit card debt has been lingering and I am usually just paying the minimums so I will use 10k to clear it off. This is some great advise. I will definitely put a chunk of it into an ETF and do some research and read up more on where to put the rest of it.

Any ideas for potential individual stocks?


----------



## AltaRed (Jun 8, 2009)

jpajel said:


> Any ideas for potential individual stocks?


You are not ready to buy any single stock. What is your investing strategy? Growth? Value? Momentum? Dividend Growth? What is your risk management process for buy/sell? What is your asset allocation equity/fixed income, and why? What will be your geographic distribution in equities, vis-a-vis Cdn vs US vs International.....and why?

You cannot buy ANYTHING without knowing what your plan is.... and that is called an Investment Policy Statement (IPS). It can be 2 pages or 5 pages, but you have to write down your goals and objectives, expected returns on your portfolio referenced to back tested norms, investing strategy, etc. 

P.S. Coming to anonymous forums or CNBC, or BNN or any talking heads for stock pics is simply rolling the dice without knowing what game you are playing. If you insist on buying something, then do the least damage possible by buying into an Asset Allocation ETF such as VBAL (already recommended) or VGRO at a higher equity component. Start here Vanguard asset allocation ETFs | Vanguard Canada Individual Investor and save you from yourself.


----------



## Eder (Feb 16, 2011)

Your mom is crazy to gift you cash if you owe 10k on CC's. You should give it back before you lease a BMW or something...sorry.


----------



## james4beach (Nov 15, 2012)

AltaRed said:


> The OP has a lot more work to do to establish an investment plan before even thinking of investing in a product/asset/holding.


I agree.

Why not keep the amount in cash (in a savings account) for now, and spend some time reading about investing and developing a plan?

We can help point you to good resources. I realize it's hard to know where to get started and I wish they'd teach this stuff in school, but they don't and it takes a while to decipher the whole thing.


----------



## cainvest (May 1, 2013)

What AltaRed and james4beach said, pretty much covered all the bases.


----------



## MrMatt (Dec 21, 2011)

Make a plan.
1. Risk tolerance, really understand what yours is.
2. Consider the time horizon of what you are investing for, is it 5yrs for a house? emergency fund, 20+ for retirement?
3. Consider using a TFSA for your Canadian investments to maximize tax benefits.


----------



## Danny (Oct 17, 2012)

James had excellent advice for you. I would not buy individual stocks for quite a while. Do not run up credit card debt....You are looking to invest long term to make some money. You can make probably 25 % percent interest on your money buy paying off your credit card debt. Hard to beat that. I would invest $20.00 and purchase the book "The millionaire teacher" by Andrew Hallam. Very easy read and explains basically what James had suggested.


----------



## MrBlackhill (Jun 10, 2020)

Your post contains many red flags. I'll be harsh, sorry.

You'd be investing money money you didn't earn. _Some_ people are less reasonable when investing money they didn't earn.
You have a credit card debt.
You are seeking to invest while you _seem_ to have poor knowledge of money management, poor knowledge of investing and poor knowledge of how your react to risk.
You are seeking stock ideas when you _seem_ to have no critical thinking to challenge those ideas.
You _seem_ to have no goal, no plan and no strategy.
A few things you should do before investing in the stock market and stock-picking.

Read about the basics of money management and take notes
Read about the basics of investing and take notes
Read about the basics of investing in the stock market and take notes
Read about the basics of stock-picking and take notes
If you haven't read at least 100h of content, read more and take more notes
Read your notes
Get to know yourself as an investor; how do you react to risk
Write down how your money should be managed and the reasons why
Write down your investment goal and the reasons why it's your goal
Write down your investment strategy and the reasons why it's your strategy
Write down your investment plan and the reasons why it's your plan
Write down your investment choices and the reasons why you've made these choices
Read your goal, strategy, plan and investment choices again and again
Start investing
Reassess your decisions at least once a year


----------



## Mortgage u/w (Feb 6, 2014)

Pay off your credit card debt and sit down to figure out how you got yourself into credit card debt. Then figure out how not to get yourself in the same situation again. Not sure if you generate income.....if you do, you need to establish a budget because if you can only manage to pay the minimum on a $10k credit card balance, you're not managing your income properly.

Where to invest the money is the least of your worries right now. Get rid of your debt, let the extra money sit in a savings account for now, thank your mother and reassess your finances.


----------



## Spudd (Oct 11, 2011)

I would propose you use 10k of the money to pay your credit card debt. That's accumulating interest at 20%-ish per year, you can't beat that return. And it's tax-free! 

For the remaining 20k, I would put it in a high-interest bank account (check here for rates) and use it as an emergency fund. You must not have an emergency fund right now since you have 10k in credit card debt. It's important to have one, so that in the future if something happens (car breaks down, etc) you don't need to rack up more credit card debt. If all your money is invested in ETF's, you might be reluctant to withdraw it because of market conditions, or capital gains taxes, or whatever reason, and then you end up stuck in the credit card trap again. A fund of 6 months expenses should do. If 20k is more than 6 months expenses, you could think about investing the rest.


----------



## :) lonewolf (Feb 9, 2020)

Is the money for you to invest for your mother or for you to invest for yourself ? If it is to invest for your mother do not pay off the credit card debt use your own money. If your mom wants to gamble on you I would buy now TQQQ hold until Feb 2 Would also buy JKS now sell Feb 21


----------



## jpajel (Oct 12, 2020)

This are all great ideas and I'm learning a lot today. Thank you all for your expert advice.. The money is to invest for myself and grow it for the long term for my retirement so I'm fairly moderate to risk. I decided to use 10k to pay off the credit card debt. With the money I was using to pay the interest on my credit cards I will allocate those monthly payments to pay back the 10k and continue depositing the money even after it has been paid. I'll also cancel one of the cards as well and reduce my limit on the other one.

For the remaining it looks like and ETF or Index fund would be best for now or perhaps sit in a money market or savings account until I reassess, educate myself and compile all this feedback I was given in this forum.

I was hoping to use the growth from this portfolio for retirement and use the dividends to provide an income when i'm in my 60s


----------



## Eder (Feb 16, 2011)

Good thinking...more important for your retirement than dividends or growth is eliminating and controlling credit card debt...


----------



## AltaRed (Jun 8, 2009)

jpajel said:


> I was hoping to use the growth from this portfolio for retirement and use the dividends to provide an income when i'm in my 60s


You can but you need to learn what you are doing first before throwing mud at the wall. The market can be very unforgiving


----------



## MrMatt (Dec 21, 2011)

Pay credit card debt, and learn.
Only buy stuff that you understand and makes sense.
If in doubt, put it in a TFSA high yield savings account while you learn.


----------



## cliffsecord (Jan 10, 2020)

I'm going to stick my neck out here. I feel that you should put $5k~$7k into the market after doing some "research." During that time, watch it like a hawk and do as much reading and learning as you can about those stocks.

I find that you can read as much as you want, but until you put it into practice you don't really learn because no one tells you that you misunderstood the concepts or what you are missing. It's just like why you need to do homework after the lecture to really see if you understand the stuff. In addition, just like school, it will take years before you even begin to understand. Just make sure that you do it with money that you can lose, because you probably will lose half of it within six months. Be honest with yourself on how you feel as you see your equity move up and down - everyone feels that they can stomach the volatility until they can't. To quote a famous boxer - "Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze."

For some background, when I graduated from university in 2000 with an Engineering degree, I thought I knew it all. I sold all my dividend MFs my Dad managed for me into tech stocks. I quickly tripled it up to $100K and I thought I knew it all. A year later, I was down to $30k and going lower.  After that, I did a lot of soul searching and took a much more balanced approach and back into dividend growth stocks. Luckily, I was just starting my career so I had a lot of time to recover. Even now, I keep thinking I should switch over to VBAL and be done with it.


----------



## james4beach (Nov 15, 2012)

@jpajel please don't find the responses too discouraging. I'm the same age as you so I understand where you're coming from.

We all have to start investing, somehow. But many of the people on this forum are very experienced investors. They are right about everything they say ... and I suggest listening to @AltaRed @MrMatt @Danny @Spudd and others ... it's good advice.

At the same time I understand that everyone has to start somewhere. It is often said that new investors pay a "tuition" to the market while they learn about investing. The "tuition" means that they lose money. Most of us around here have paid this tuition somehow.

So you really do have to be careful as you start. Investing is much harder than it looks. It's fine to start and try things, and that's the only way to learn, but DO NOT deploy all your money into these early investments. That's the best advice I can offer.


----------



## MrMatt (Dec 21, 2011)

I think the most important thing is to only buy what you understand.
That means you understand how the investment will give you money back.

The case for investing in Fortis is very simple and clear. As regulated utilities they are very predictable.
My first "big" investing win was buying Lakeport Brewing (Ontario Buck a Beer), it was very simple exactly how they made money, and what they would make.
For some other companies, it's very confusing, don't buy those companies.

Never buy something you don't understand, and if it sounds too good to be true, you're likely missing something.

Everyone has a story of losing money on a poorly understood investment.


----------



## Kilbarry20 (Aug 19, 2020)

A few things you should do before investing in the stock market and stock-picking.

Read about the basics of money management and take notes
Read about the basics of investing and take notes
Read about the basics of investing in the stock market and take notes
Read about the basics of stock-picking and take notes
If you haven't read at least 100h of content, read more and take more notes
Read your notes
Get to know yourself as an investor; how do you react to risk
Write down how your money should be managed and the reasons why
Write down your investment goal and the reasons why it's your goal
Write down your investment strategy and the reasons why it's your strategy
Write down your investment plan and the reasons why it's your plan
Write down your investment choices and the reasons why you've made these choices
Read your goal, strategy, plan and investment choices again and again
Start investing
Reassess your decisions at least once a year.
These are fabulous ideas from Mr. Blackhill. Wish I had them, before I started. Once blew through a combined $60k in an RRSP nest egg, in one day- with the infamous NORTEL. With this, I wouldn’t have! 

All is more than well today through that School of Hard Knocks and pre digital, Self Directed Accounts.

Excellent advise.


----------



## GL from QC (Nov 18, 2021)

That is excellent advice indeed. 

The vast majority of people out there (95%? 97%?) should just stick with index funds. It's possible to learn how to invest in stocks - any skill is possible to learn from scratch - but that requires a lot of work. Whenever my friends and family ask me about that, I tell that to read "The Intelligent Investor" by Benjamin Graham first. It's 600 pages of concentrated knowledge, and it's definitely not an easy book to get through...

Of course, that's only for value investing, but it still gets the message across: if they don't do their homework, they'll be more likely to hurt themselves than to beat the market. 

There's a very terrifying genre of literature - the so-called "loss p o r n" on Reddit's r/wallstreetbets community. (Spacing out the letters just in case some words are auto-moderated haha) If you know someone that's simply dying to go full-on YOLO on stocks (or options, or crypto, for that matter), show them some of those posts... It's about people who lost everything with their oh-so-brilliant bets, where they state that was their house downpayment money, or their kids' college fund, or even their next month rent money.

Here is a random horrifying example from one of the subreddits I post on from time to time: here and here.


----------



## l1quidfinance (Mar 17, 2017)

Hmm this was from OCT 2020 so the OP has maybe doubled his money or bust by now.


----------



## GL from QC (Nov 18, 2021)

LOL! Takes even less time than that if you start gambling with weekly (or worse, 0 days till expiration) options.


----------



## james4beach (Nov 15, 2012)

GL from QC said:


> LOL! Takes even less time than that if you start gambling with weekly (or worse, 0 days till expiration) options.


It's sad when people gamble away money in stocks & options. Really what they are doing is handing their money over to Wall Street's richest people (the professional traders).

This is what's so beautiful about just holding onto something like XIC or XAW for the long term. There's no better way to screw Wall Street elites than to hold onto a super low fee index ETF, which you *never* touch or trade. As an additional benefit, it also screws over the mutual fund industry and hedge fund industry.

With good rewards to the patient investor, as well. How about 6% to 7% long term return in XIC, after fees. See the Morningstar page on XIC.


----------



## Kilbarry20 (Aug 19, 2020)

In a moment of sanity yesterday, I grabbed 500 of VFV as a consolation for Monday’s OMyGod Variant Armageddon! While the 5k I was “down” in one account, all returned today, decided to lock this in for awhile.

In 2 days, I’ll be 70, so it’s time to slow down a bit!😜


----------

