Back to School: What is Investing?

How hiding your money for a while can get more of it! With Ian Tam and guest host Aaron Tam

Ruth Saldanha 31 August, 2020 | 1:48AM

 

 

Aaron Tam: Hi, I'm Aaron Tam. And today, I'm going to talk to Ian Tam about investing. Hi, Ian.

Ian Tam: Hey, Aaron.

Aaron Tam: What is investing?

Ian Tam: It's a great question, Aaron. Investing is basically taking a little bit of extra money that you have today and putting it away so that in the future you have actually a lot more money. So, what happens is, when you invest, your money grows over time.

Aaron Tam: Is investing just for adults?

Ian Tam: No. Anyone can invest including you. Actually, because you are so young, it actually makes a lot of sense for you to invest because you have a long time until you need to take that money out for when you retire. So, there actually is no age limit for investing. Anyone can invest, not just adults.

Aaron Tam: How young can you be when you start investing?

Ian Tam: There is absolutely no age limit, Aaron. In fact, you can invest today maybe with the help of your mom and your dad or maybe your favorite uncle. But there's definitely no age limit for starting to invest.

Aaron Tam: Why is investing better than spending money on toys and video games?

Ian Tam: Well, it's really not. Having toys and video games today is definitely a lot of fun. But the idea of investing is, if you really don't need to spend that money now, if you put it away, you have a lot more money in the future. So, it's not really better; it's just saving enough so that you can use more of it in the future.

Aaron Tam: When can I have the money I have invested?

Ian Tam: Yeah. So, most of the time, Aaron, you can take your money out whenever you want. But the longer you keep it in, the more you'll have when you pull it out in the future. So, if you can, try to keep it invested for as long as you can.

Aaron Tam: Thank you, Ian. For Morningstar, I'm Aaron Tam.

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Ruth Saldanha

Ruth Saldanha  Ruth Saldanha is Senior Editor at Morningstar.ca

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