Young money: How to start investing as a young adult (even with little money) – News and Events

This article is for informational purposes only and does not constitute financial advice. Always consider your personal circumstances before investing.

Young adults today think about money differently. It’s not just about how to stretch your pay cheque, it’s about how to make your money grow. If you want to improve your finances, investing could be a smart place to start.

But for many young people, starting to invest feels confusing and scary.

Young Canadians aren’t imagining this knowledge gap.

A 2025 Fidelity Investment Canada study found that half of Canadians aged 18 to 34 think people should start investing between ages 18-24. But only 8 per cent feel they know enough to actually begin. 

So why does investing feel so hard to start?

Professor Yuanshun Li is a tenured finance professor at TMU’s School of Accounting and Finance, Ted Rogers School of Management. He says the problem isn’t lack of interest, it’s lack of knowledge and confidence.

“Financial literacy is more important than ever because today’s investment landscape is full of so-called ‘opportunities’ that are actually traps,” says Li. “Young investors are increasingly exposed to speculative products. Without a solid understanding of investing basics, it becomes very easy to confuse speculation with investing and to underestimate risk.”

Why investing matters, even if you are starting small

People avoid investing for many reasons. Some think they don’t earn enough money yet. Others worry about losing what they have. Many feel overwhelmed by confusing advice.

“The biggest barrier is fear,” adds Li. “The fear of losing money and the fear of not fully understanding what they are investing in. When people don’t understand an investment, uncertainty turns into anxiety.”

But waiting comes with its own cost. Rising living expenses make it hard to think long-term, but Li says time is one of the most powerful tools investors have.

“This concern overlooks the power of compounding,” says Li. “The earlier you start, the more time your money has to grow, even if the initial amount is small. Time in the market matters far more than the size of the initial investment.”

Understanding bonds and stocks: the basics

Understanding investing starts with the core building blocks: bonds and stocks.

When you buy a bond, you’re lending money to a government or company. They pay you interest and promise to pay you back later. Bonds usually have lower risks, but also lower returns.

Stocks work differently. When you buy a stock, you own a small piece of a company. If the company does well, your shares go up in value. If it struggles, they can go down.

Those ups and downs can feel stressful, especially for new investors.

“Risk is often defined as volatility, but volatility itself is not bad,” says Li. “For young investors with a long time horizon, short-term market fluctuations matter far less than long-term growth.”

Spread your money around and avoid the hype

In the investing world, you’ve probably heard the phrase “diversify your portfolio”. This means spreading your money across different investments. You don’t want to rely on just one company or type of investment to succeed.

For students with small amounts to invest, diversification can sound impossible. Li says pooled investments (like index funds) help solve that problem.

“Diversification is about reducing unnecessary risk, not about picking winners,” he said. “Low-cost, diversified investments allow people to stay invested and avoid emotional decision-making.”

People also invest in real estate, commodities or cryptocurrencies. Each comes with its own risks, costs and levels of accessibility.

Li warns against chasing trends. “Long-term discipline and valuation-based thinking are far more powerful than short-term excitement. Always invest based on the intrinsic value of an asset, not hype.”

Be careful with social media investing advice

As more people get interested in investing, many turn to social media for financial information. Li encourages students to be critical of online advice. 

“Some influencers benefit if you buy before others do, while others benefit if you buy what they are promoting,” says Li. “A critical question should always be: who benefits if I follow this advice?”

Financial literacy helps you slow down and ask better questions. It helps you separate real investing principles from online noise.

Final tips for beginners

Li says one of the most common mistakes new investors make is waiting for the “perfect” time to start.

“There is rarely perfect certainty in markets,” says Li. “Waiting often leads to missed opportunities. Investing gradually and thoughtfully is usually more effective than trying to time the market.”

Li says education is the best place to start. “Build a strong foundation by taking introductory finance and investment courses to understand how markets and securities work,” says Li

Students can join program-specific groups through the Ted Rogers Students’ Society to learn more about financial literacy and investing.