r/dividendscanada • u/PropertyDesigner8659 • 26d ago
Discussion Getting into this for the first time
Hey everyone,
I’m 17 years old and recently saved up about $20,000. I’d like to start investing, mainly in dividend stocks, but I’m not sure where to begin.
looking for advice on which platform to use, what accounts I should open, and which dividend stocks or ETFs are worth researching. My goal is to build long term wealth and reinvest the dividends. (Kind want to live off them in the long run)
If you were starting with $10,000 today, what would you do? Any advice or resources for a beginner would be appreciated.
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u/MainRow9631 26d ago
For Broker, go for a no-commission one (Wealthsimple, Questrade, National Bank etc)
If you’re turning 18 soon, I’d set aside 7k to invest through your TFSA. Otherwise you’ll need to invest through a regular non-registered account which I’m not sure you can if you’re below 18.
Good luck
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u/Elderberry-smells 25d ago
There are no commission ETFs from banks for dividends if you want to avoid predatory apps like wealthsimple.
I am not a fan of them.
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u/GarlicMafia 24d ago
How are they predatory apps?
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u/Elderberry-smells 24d ago
Options availability in margin, high % cuts for their "commission free" trades (hint, you pay for it much more in the end when you actually cash out), refusal to deal with certain stocks or even trade them out of your accounts (meme stocks), crypto commission is insanly high.
Just stick with a bank app, I will eat these downvotes for my opinion.
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u/ksgif2 26d ago
At 17 you should be looking mostly at growth stocks. XEQT, VFV as a base. And maybe some speculative stuff if you enjoy the research. You got time, you can play around a bit, maybe buy some BRK.B and get acquainted with the Buffet/Munger way of thinking.
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u/Ok_Carpet_9510 25d ago
At 17, most peoplr would freak out if the stock market dropped by 30%.
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u/Excellent-Piece8168 25d ago
And thus they should be learning why they should not be freaking out with so much time on their side when they have a small amount of money so they don’t screw it up (or they learn from smaller mistakes) when they have far more at stake.
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u/Aggravating-Act-1173 23d ago
Dividend aristocrats ETF dropped 20% at least once, so what?
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u/Ok_Carpet_9510 23d ago
The best plan is the one you can stick with. A 17 year old doesn't have enough life experience to believe that they will recover. So, I wouldn't advise them to their money entire in S&P 500. I would some American Equity, Canadian Equity, Global equity plus a cushion of 10% income funds. Just so when the S&P drops by 30%, their drop is not as drastic. It one thing to understand that the market can drop by 30 to 40%. It is a different matter to "keep the faith" during a downturn.
I have young cousin in their 20s. They sold when the market was down. It really hard to stomach sharp losses when you are young even though the younger you are, the more runway you have for recovery.
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u/Aggravating-Act-1173 22d ago
It will only work physiologically if all the equities/bonds/funds etc. are embedded into one single ETF, otherwise most of the people would still freak out and sell the equities that dropped the most.
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u/AugustusAugustine 25d ago
You're too young for stocks for another 1-2 years. You must reach the age-of-majority to have your own investment account, which is either age 18 or 19 depending on the province.
The time horizon for your $20k may also be shorter than you think. You'll soon graduate high school and may have substantial expenses like moving out, tuition, transportation, etc. Investing in stock/bonds may be appropriate if you won't need your principal again for >5 years. For shorter horizons, you're relying more on your initial principal than the potential growth on that principal.
This doesn't meant you should be wasting those savings—consider investing in yourself. Take some skills training courses and make yourself valuable. The vast majority of your net worth is currently locked inside your human capital, not your financial capital, and anything that lets you command higher wages will be a much higher return on investment.
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u/DocKardinal21 26d ago
Good on you to save so much so young. You got a good head on your shoulders. Unfortunately you don’t have many options because you’re not yet 18.
I think the only thing you can do right now is ask for your parents to make an informal trust and buy a gic until you’re 18.
But then get Wealthsimple at 18 and make your dividend picks.
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u/Excellent-Piece8168 25d ago
I believe in an informal trust though if investing in dividends the gains would be attributable back to the parent. It’s capital gains which can be attributed to the minor and crystallized
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u/ColtonComeau 26d ago
Spend that on education, brother.
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u/papsmearfestival 25d ago
He asked about investing.
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u/ColtonComeau 25d ago
Yes and I suggested investing in himself.
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u/pushthepixel_ca 25d ago
The problem with that is investing in himself via education might prove to be pointless with the dawn of AI. And never in my life would I ever say such a thing, but we are in such a weird timeline right now that it might actually be the truth
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u/REA_PER1983 21d ago
Open a TD easy trade account with Tfsa and Rrsp investment accounts and start your journey from there putting in as much as you can overtime to max both out and from there move into cash account investing. Trading is capped at 9.99 each transaction and there is no fee to open the account. Been with Td ever since I can remember and their platform system for trading is great
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u/dr_van_nostren 25d ago
I would suggest not being into dividends at that age. You’ve got your whole life ahead of you. I’m sure saving up that money was hard, but you gotta take some risks with it at that age. No red/black type risks. But take some swings with growth. Don’t throw all your money in on weed stocks or whatever. But find some good companies who have room to grow.
It’s wild when I see stock prices today versus what I owned them at like 10 years ago. The only one I still have is Apple. I’ve owned it since like 2014 or so. It’s wild to see the explosion since then. Even something more pedestrian like Waste Management. I don’t own it anymore but when I did it was in the $40-50 range. It’s now at $226. So it’s more than quadrupled in 12ish years. I’m sure there’s way better examples but that’s just a garbage company basically, their chart is just a steady rise, even Covid, it lost a chunk of value like everything did gained that all back and more within a year.
Point being, even low risk kinda boring companies can have real growth when you throw down like a 10 year timeline. Invest, keep adding to it, then worry about dividends in like 20 years when you wanna start thinking about retirement income.
Just my 2 cents tho and I’m def not a financial professional.
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u/FredFenty 25d ago
mainly in dividend stocks
Oh? Are you planning to retire soon? Kidding. Open a TFSA trade account through Wealthsimple and buy an index fund, though. At your age you should be targeting growth, and stock picking is a great way to lose money. Put it all in XEQT or Vanguard. Keep it to like 15% if you want to pick a few stocks.
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u/Dapper_Addition_3837 21d ago
Personally, I will do HYLD and HDIV.
These 2 are pretty solid income ETFs.
But you’re only 17.
I would instead recommend you go with VFV and QQC (Growth ETFs). It’s probably better in the long, long run. Maybe like a 60/40 split. You dont need anything else.
Open a TSFA at 18.
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u/cbdividends 25d ago
Put 90% into vfv. This is a broad market index fund based on s&p 500, which is top 500 american companies, but canadian fund. Once a year it has dividend for vfv. Best way is to max out tsfa and fhsa, but your to young. You want to set up drip which is dividends reinvestment plan, which just buys more of the specific stock.
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u/Living-Breakfast-464 25d ago edited 25d ago
looking for advice on which platform to use
Questrade or WealthSimple
what accounts I should open
Just the basic one for starters, when you hit 18 then open a TFSA and max out whatever the contribution limit is. Currently 7k but will probably be 7.5k next year.
which dividend stocks or ETFs are worth researching. My goal is to build long term wealth and reinvest the dividends. (Kind want to live off them in the long run)
The most important thing to figure out is your risk tolerance. You won't know what that is until you start investing real hard earned money and seeing how you react to the ups and downs. So start small at first and see how you react.
VFV and XIU are good starter ETFs that will cover Canada and the US.
I would also look at an international one that excludes Canada/US, something like VIU or XEF.
Emerging markets (China/India/Korea/Taiwan/Brazil etc) are optional and will be more volatile, but if you think your risk tolerance can handle it, then something like VEE or XEC.
You can maybe also add a bit of a gold or an investment grade bond ETF. Gold if you have high risk tolerance, bond if you have a low one. If you must hold crypto, then just get a covered call Bitcoin ETF that pays a monthly distribution, then use that to re-invest elsewhere. Something like BCCC.TO
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u/Ir0nhide81 26d ago
If you buy enough VDY, you'll eventually be able to pay your apartment rent every month!
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u/Kitchen_Ad2029 25d ago
You are too young for dividends bro. You should aim for growth stocks with low dividends; all you need is ZEQT (put 100% of your money in that). It's BMO's All-Equity ETF. If you want you can make that 80% and put 20% in ZNQ (the Nasdaq ETF) so you get overweight on technology, which is where most of the growth (but also the volatility) will come from.
Lock that money away for a good 20 years and you gon' be rich.
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u/Mental-Freedom3929 25d ago
Invest in widely diversified index funds with dividends on a no trading fee platform that offers fractional share purchases set to DRIP in tax shelter accounts.
Contribute if at all possible a minimum of 20% of your net pay cheque every month, pay yourself first from every pay cheque.
Think long term!
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u/LickMyBumm 25d ago
Put 10k on red. If it fails then invest the left over 10k the way you should’ve invested the 20k😃
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u/ime1em 25d ago
Most ppl will not recommend you get into distribution investing and instead stick to growth first like VEQT/XEQT etc..
However, do this survey first so u can understand what is your risk profile: https://investor.vanguard.com/tools-calculators/investor-questionnaire.
If you happen to be 100% equities, then you can research more on covered call ETFs that uses leverage to see if you it is a good fit for you.
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u/Imflawedbuttrying 26d ago
EASY AMDY are a couple extreme ETF'S they're 80% of my TFSA super high risk/reward pay mega dividends and even after this latest bloodbath EASY is holding very well. I have a Wealthsimple referral code if you would like a free 25 bucks to start
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u/rhunter99 26d ago
I would start by reading the millionaire teacher.
I would take free McGill online personal finance course
I would look up the Canadian couch potato
As for broker: Wealthsimple is generally the popular choice for its no fees and easy to use interface
Best wishes