Today I was going to write about how I started investing – inspired by Krystal at Give Me Back My Five Bucks (the very first financial blog I ever found, and still read). Then I started compiling a time line of all the big financial decisions I’ve made, and their outcomes. I realized my time line looks like a rather grim story – a roller coaster ride of stops and starts. Regular readers know my adult life hasn’t been smooth sailing. I felt discouraged when I looked at the overview of my financial life on paper, and debated cancelling the post. But I thought that you, my frequent commenters, might like to read about it anyway. You know that I never give financial advice, and you would not be likely to mock me for my past mistakes! First-time visitors to the blog can come along for the ride and be forewarned that this is a What Not to Do post. So here goes.
I’ll start with a good, but difficult, situation. I lived at home until I was 23, and received free room and board there while taking two university degrees back to back. By combining this free living arrangement with scholarships, fellowships and numerous part-time and summer jobs, I graduated debt-free. However, I am not bragging or suggesting that today’s students do the same. It’s a different world out there, and you can no longer earn a year’s tuition with a four-month summer job, as my generation did. The negative for me was that I didn’t learn any real-life skills in my early 20s, such as living on my own, living with room mates, or household budgeting. I know lots of adults who share a home with their parents and have mature living and budgeting arrangements. I wasn’t in that category – I had younger brothers and sisters at home with me, and I think it extended my adolescence by 5 years!
After university, I was so desperate to be independent that I moved across the country for my first career job, with my then-boyfriend, carrying along my aforementioned lack of life skills. I had saved for a few months to cover new apartment start-up costs, and my new employer was to cover moving expenses. I was floored when I found out that my first pay cheque would not be issued for four weeks – and the library reneged on its moving expenses offer, eventually settling on paying just half of my receipts. (A misunderstanding of the policy, I was told). I was immediately plunged into debt and had to borrow from family members, as well as putting everyday expenses on my graduating-student credit card. I like to think I could have pulled myself out of it if it weren’t for my BFs spendthrift ways. That may or may not be true, but one year later we had been married and divorced and I was left paying off his impulsive car purchase, the credit card, and the bills for both a divorce and an annulment – gulp!
I moved twice, into successively cheaper apartments, and was promoted twice at work. I was on the right track and perhaps should have stayed there. But I met a man with a professional career, from a good family, who also wanted to settle down and have children. I knew my life would be so much better if we went forward together. In retrospect – what can I say? I am still privileged to know his lovely family. My heart was in the right place. But I was gullible. Mr. Right proved to be Mr. Train Wreck, no disrespect intended. Despite living on my own and functioning so well at work, I explained away all signs of trouble. We got married, had a child, bought a house, and moved across the country for his career, suspending mine. I found myself and our child financially dependent on someone with a serious substance abuse problem that soon claimed his life. By this time we had even followed his job from Canada to the US, where we had no legal status after his death.
Life insurance proceeds allowed us to return to Canada, get settled again, and for me to re-establish my career. I have now been happily employed in the same library system for 10 years, my child has been launched (so to speak), and I’ve been remarried for 5 years.
Getting back to my original idea for this post, to ask “What was my first investment?” seems like a farce. Investing money implies being successful at saving money. And how can you save money when you are busy downgrading your apartment and surviving romantic entanglements and paying lawyers? It took me forever to start saving for the future. Before that I was always saving for the present – for the first and last month’s rent on an apartment, or moving expenses, or new baby expenses, or legal bills. My one “indulgence” was that I lived thousands of miles from family and visited them once a year, forgoing all other vacations.
My early attempts at investing didn’t pan out. Pre-motherhood, I started my own RRSP account (private retirement savings), but cashed in my lone $2000 contribution to pay legal bills. In Year 2000, I ventured into the stock market with $3000, and we all know how that ended – with my capital taking a hit post-9/11. My first employer pension was locked in and is still getting good returns today. My second career job was in the US, and when I left the country, I couldn’t transfer it tax-free back to Canada. So I reluctantly paid the taxes on it and re-invested it – and fortunately, that fund is making steady returns as well. Then I spent 6 years saving for Link’s university costs, only to have said child not pursue a college education. So that money is now in TFSAs and is being used as a help-out and emergency fund.
It’s really only now that I have income surplus to needs on a regular basis, so I can top up RRSPs and TFSAs on a regular basis. It is hard to get past the mindset that some calamity will happen and I will need to cash in my investments. I have worked with a financial advisor to set an appropriate risk profile, but I leave more in cash and short-term GICs than most people would. And I am sure I pay a higher expense ratio too.
Rather than concluding “There’s no point in saving because life gets in the way,” any little pockets of saving I had softened the blows of hard times, so I could recover and move on. I’m glad I didn’t treat my investments as sacred, and they were available to tap into when I needed them.
In retrospect, I wish I had taken the standard financial advice that you should make a habit of saving, no matter how little. At age 25, I didn’t even have $20 left over by payday. But as my fortunes waxed and waned, I wish I had put aside even $10 a week, because it would have given me a feeling of accomplishment. And I could have practiced investing while the stakes were still small – instead of when I had to cash out a pension plan!
So as you see, it was quite a road to become as Exacting as I am now 🙂
Has anyone else started investing and then been derailed, like I was?