More Money Podcast - 413 How to Become a Self-Directed Investor in Canada - Business Development Manager at National Bank Direct Brokerage, An Le

Episode Date: November 20, 2024

I became a fully self-directed investor in 2021 and no exaggeration, it was one of the best financial decisions I've ever made! Up until then, I'd used an advisor, then switched to a robo-advisor. But then I came to a point where I wanted more control over my investments, not to mention wanting to save more money on fees. Even though the transition from leaving my robo-advisor to going self-directed through a discount brokerage was fairly seamless, making the switch was still intimidating and I know that's been a common sentiment from students in my Wealth Building Blueprint for Canadians course as well. That's why I wanted to invite An Le, Business Development Manager at National Bank Direct Brokerage, on the podcast to discuss all the ins and outs of becoming a self-directed investor from setting up your account, developing an investment strategy, and placing your first trade. This is an essential listen to anyone who wants to start investing on their own but isn't sure what steps to take. This episode of the More Money Podcast is made in collaboration with National Bank Direct Brokerage, the first broker from a Canadian bank to offer online trading of stocks and ETFs for zero commissions. To learn more and open an account, visit nbdb.ca. Follow me: Instagram @jessicaimoorhouse Threads @jessicaimoorhouse TikTok @jessicaimoorhouse Facebook @jessicaimoorhouse YouTube @jessicamoorhouse LinkedIn - Jessica Moorhouse For full episode show notes and transcript visit jessicamoorhouse.com/413 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, and welcome back to the More Money Podcast. This episode is for anyone who has been wondering about self-directed or DIY investing, but has no idea what it really is or how to do it and the mistakes to avoid. Now, I often get questions about this on my Instagram or YouTube because I got some videos about it, but I've never done a full podcast episode about it. So I'm really excited about this and I know you're going to love it, especially since I am a self-directed investor, have been for a number of years, and it was honestly one of the best decisions I've ever made. Now, to talk about this important topic with me,

I'm partnering with National Bank Direct Brokerage for this episode and have invited Anne Lee, she's a business development manager at NBDB on the show, to really do a deep dive with me. And you know, she's the perfect guest because she often does webinars about this and educates users of the platform about all things self-directed investing. And if you're not aware, I'm a really big fan of National Bank Direct Brokerage. You know why? Because they charge zero commissions on stock and ETF trades. And you know how I hate fees. And I'm always telling you to find another bank or financial institution that does not charge you fees. Well, NBDB is one I've been recommending for years because of that. So

if you want to learn more about National Bank Direct Brokerage, because you want to get started and you want to do it the smart way and not pay a bunch of fees, make sure to go to their website, nbdb.ca. They have a lot of great resources in their learning center so make sure to check those out as well i will link to a bunch of important things that you may want to check out in the show notes for this episode so you can find that at jessicamorehouse.com slash podcast or jessicamorehouse.com slash the number of the episode it's always linked in the description of every episode no matter where you're watching or listening this but. But we have a lot to cover in this episode. So without further ado, let's get to that episode. Welcome, Anne, to the More

Money Podcast. So excited to have you on the show to talk about a topic that I sort of talk about on the show often, but not in this kind of way, because I've got a lot of questions that I've been getting from people, like very practical how-to questions about self-directed investing that you're an expert in so I'm excited to have you on the show to really do a deep dive into that specifically for Canadians as well well I guess for Americans too but and before we get right into all of the questions I have about what people need to know if they want to invest solo on their own. Tell me a little bit about yourself. I know you've been with National Bank Direct Brokerage for a number of years. And you know, tell me what kind of

got you interested in working in this field. Absolutely. And I'm really excited to be here, Jessica. So thank you for having me. And I guess a little bit about myself. My name is Anne and I'm one of the business development managers at National Bank Direct Brokerage. And I've been doing this for a little over six years now and counting. And what that actually means in my role, what does it entail is I like to call it a fancy title to say that I help grow our business and brand at National Bank Direct Brokerage across Ontario and Western Canada, whether through education by hosting webinars or networking with internal and external partners who are ultimately interested in self-directed investing. Amazing. And just for people who aren't super familiar,

because you know, when you are just learning about your options and how to go about investing, you know, one thing you'll obviously start doing research on is what are the different discount brokerages in Canada? National Bank Direct Brokerage, I feel like has definitely been making a name for itself over the past couple of years. And we'll kind of get to that why in a moment. But you want to kind of share a little bit more about why or how National Bank Direct Brokerage kind of is setting themselves apart from other brokerages that are currently out there. Yes. I mean, at National Bank Direct Brokerage, we are proud to be a leader in innovation and change in the overall direct brokerage industry through our pricing and overall service

offering. So as you may know, we do now offer our zero commission trading. So that was kind of the catalyst for the change, if you want to call it that. Yeah, I mean, that's probably when I started paying more attention to National Bank Direct Brokerage, because I'm always looking for what are the cheapest or, you know, best options, save those fees, so we can put it back into our pocket. Now, it's been when when do you remember that they started offering no commission trading and specifically on stocks and ETFs? And why did they want to do this? Because, you know, from an economic standpoint, you're like, oh,

you're leaving money on the table company, like why you want to get rid of those fees? I remember this clear as day. So it was definitely an exciting time for us when we announced our zero commission trading in August 2021. And that made us the first broker affiliate to a big bank to offer free online trading. And the thing is, we were already offering no fee trading on ETFs in 2017. And then over the years, we reduced our stock trading commissions from $9.95 to $6.95 to $0.95. So our reason for going to zero finally, it's quite simple, really. The self-directed investing industry is constantly evolving. And we wanted to evolve with it for the benefit of, of course, our own clients and

all investors across Canada. And our zero commission pricing is another step in our efforts to both being innovative and competitive in the overall industry. Yeah, and definitely competitive because, you know, even though there's a lot more options in terms of where you can invest your money or do it on your own than there was, say, like, five, 10 years ago, even still, a lot of the options out there can be kind of expensive. And so there's still not a huge pool of, you know, organizations or institutions where you can find no commission trading. So I think that's, again, why I've been kind of talking a little bit more about it to people who are like, hey, where should I go? It's like, here's another option besides some other ones that you may be more familiar with. I want to talk more specifically about self-directed investing. Now, this is a term I use often. There's lots of terms for it, DIY investing, things like that.

I want to talk a little bit more so people can kind of get a better understanding of how it works. Now, I know from talking to so many people and investors over the years, typically people think their only options when it comes to investing are I have to work with an advisor or professional, or maybe a robo advisor, you know, but they don't realize, you know, you can do this on your own. And you don't have to be, you know, maybe what you see in the movies or social media, a day trader, or make this your full time career, like you can do it and it can take hardly any time

and you don't have to become an expert exactly in everything under the sun investing. So I think that's really important to talk about. But can you share a little bit about what it means or looks like to be a self-directed investor and what are some of the advantages to doing so? Yeah, I mean, I love this question because it brings me right back to my own experience of self-directed investing and placing my first trade. And I remember being quite nervous about clicking that submit button after filling out my order ticket, but I was confident in the research that I did beforehand. And of course, the risk to reward made sense to my own circumstance at the time. But I'll never forget that feeling of empowerment.

So I look back at that experience as the spark that ignited the flame. And I have not looked back since. So I've been self-managing my own investments ever since. That was a couple of years ago when I placed my first trade and I see DIY investing self-managing your own investments as empowering as you do have the flexibility to invest in what you want when you want and with NBDB in particular you do get to do that for free especially nowadays there are so many useful resources and tools that make learning about investing and building your own portfolio simpler than it

actually seems. Yes, this will take an investment of your own time initially, but depending on your strategy, I find do-it-yourself investing can be as high maintenance or as low maintenance as you make it. Yeah, I think that's a big concern from people about you know should I go that route or should I go a different route with my investments I think a lot of people are concerned how long is it going to take me to learn how to do this um you know there I think fear for sure like like you said I also have like just physical memories that are in, like, I'll never forget of putting that first trade for myself. I'm like, I hope I didn't mess it up.

I hope I'm not making a mistake. Because it is kind of scary, especially when I feel like for so long, there's just a lot of characters out there that are saying, you can't do this on your own. This is very difficult. It's very complex. You should not do this on your own. When it is absolutely something that you can learn to do and you can do it strategically and people do it all the time. You may just not be aware of. And, you know, just touching on some of those

benefits, you know, I've been a self-directed investor, I think for now, I want to say almost eight years, if I have that right. I think that's right. I actually don't know. Now it's been too long. Now I actually don't know how many years, but's been a long time it's been a long time no it's probably been less maybe it's been like five years or something like that I kind of anyways and it was a really scary transition but once you do it then you're like I should have done this sooner it's so much easier than people make it out to be especially too when you have that specific investment strategy you're following you have the rules of this is what I do. These are the companies I'm buying, or these are the ETFs that I'm buying. And you have that guide. So you don't

feel like you're just making random choices, which I think is really important. But for me, I really like the freedom flexibility that it gives me to make choices to and also to like just you know talking to so many friends who are really focused on say you know the environment esg you know sometimes if you're working with an advisor a rope advisor they may not have those options for you if you're doing on your own it opens up this whole category of investments that may be more in alignment with your value so it just gives you more options and And especially too, I'd say the cost. Now that's the number one reason why I was interested in becoming a self-directed investor was I'm always cognizant of costs, bank fees, any kind of fees. I don't like paying fees. No one does. Because I feel like we're paying fees for everything these days or subscription

fees and stuff like that. And so if we can really lower those fees, minimize them. And there's so many great books that are all about this, but also calculators that show you if you choose this investment versus this one, one with a higher fee than this, you can literally have hundreds of thousands of dollars extra in your investment account if you make this one choice. And the other thing that I always like to remind people of, especially when we're kind of entering uncertain times. Once again, I think it's always been uncertain, kind of honestly, but especially with our investments. There's always something. You can never rest. There's always something coming. The only thing that you can control, because we cannot control the market, is the fees that we pay. We can make that choice of to do that or not do that. So that's just another kind of proponent of why you may want to kind of investigate self-directed investing. Now, let's talk about some specifics. So I've got some questions that I get all the time that hopefully you can help me answer.

Yes, try your best. So let's say someone is listening right now and they've decided that, you know, after this episode, or maybe they've already made the decision a while ago and they just haven't hit the go button, they want to become a self-directed investor. What should their first step be in getting started? And let's assume they don't have any other investments anywhere. They're just starting from scratch. It's a great question. And I would say, well, I guess this is my belief, but I believe that the behind the most successful outcomes is a well thought out plan. So naturally, I think it's beneficial to follow that same practice when it comes to being a self-directed

investor. And it may sound basic, but before you start investing, before you binge all the content that's out there, I think it's important to make personal finance personal to you. And to do this first, you might want to establish an investment plan. Are you trying to invest towards a down payment for your first home? Do you want to pay for your children's education in the future? Maybe you want to save for retirement. Does retirement come earlier or is it the typical 65 years old? So this is where you get to decide what your investment plan is. This is the personal part of personal finance, but keep in mind that each of these goals, they come with their own set of investment choices and strategies. I think another thing to keep in mind is that don't worry, your decisions are not set in stone as your life

plan changes. So will your priorities and then in turn your investment goals might change as well. So I would say one thing to keep in mind is stick to your plan. You could have multiple plans, but those plans are not concrete. And also there are different account types that can help you meet your different investment goals too, which I mean, at NBDB, you can easily open up the different types of accounts on our website at nbdb.ca. So I guess the core of this is as long as you have a plan, you can adapt to it. You can adapt to your changing goals and targets. You can shift your time horizons. And then of course, the different levels of risk tolerance that you might come across throughout your life as well.

Exactly. So just to kind of reiterate for everyone listening, the first thing is you need that plan. And what that plan is comprised of is you figuring out why am I investing this money. And it may be for different reasons. I think a lot of people get hung up on the idea that investing is just for retirement. But like you said, it could be for a home down payment. It could be for I want to go back to school and it's going to take me a while to save up for that extra degree. There's so many or kids college fund. There's all these different reasons that you may invest. But I think a lot of people just think, oh, no, it's just for retirement. It can be for so many different reasons. So figure out those different reasons. And you can have five different goals at the same

time. However, because you mentioned you need to have different investment plans for those goals. That means you need to figure out what's the goal? What's the timeline? So when do I want to reach that goal? If you're saving for a home down payment, that's going to be a very different timeline than retirement. It's going to be five years, maybe compared to like 30 years. So when do I want to reach that goal? If you're saving for a home down payment, that's going to be a very different timeline than retirement. It's going to be five years, maybe compared to like 30 years. So that's going to change what you're investing in, and what's the asset allocation, the mix of stocks and bonds. So there's a lot of decisions you have to make. And then lastly, like you touched on, you need to also then determine what is the appropriate account type for that plan. So for example, if you're

doing a home down payment, TFSA could be a really great place to park that money so it can grow tax free. However, you may have already started investing in your RRSP and you may want to use that for the first time homebuyers plan, or maybe, hey, you're eligible for the FHSA. So you need to look at the options out there before opening the account, putting cash in there, and then deciding. Because then it's harder to be like, oh, shoot, I put money in my RSP and I actually don't need it there. Guess what? You don't want to take that out. There's consequences for taking that out. There is. So it's important to know what you're doing. Write it down, honestly. And there's lots of great resources. I know there's lots of great

educational resources on the MBDB website. And so do your research, make that plan ahead of time before taking action. But I know that's difficult because so many people get excited and they want to take action right away. I'm telling you, if you take action before you're ready, you're going to make a mistake and you're going to be like, shoot, you know, and then it's going to cost you money likely. Exactly. Speaking from experience on my own, I mean, same, same. We've all done that. We've all made those mistakes. And we're telling you this, so you don't have to repeat some of those. So I think that's kind of where you want to start. Now, the last thing I just want to touch on is once you've got that plan, you're ready to

go, you know what to do, then obviously, the last step is to decide where you want to invest your money, what institution. And again, I think it should also be clear because sometimes people don't know. There's national bank direct brokerage and then there's national bank. They are separate, similar to, there's lots of other discount brokerages that are, they sound like they're the bank, but they're not that particular bank. So I think that's important. And the other thing we didn't really touch on, but it's important is, say you open an account with like National Bank Direct Brokerage, you put your money in, you're ready to go. Guess what? Like, you are your own portfolio manager. So I think sometimes, if you're looking for help, National Bank Direct Brokerage can't

provide you advice. That is not the role. So make sure if you need investment advice, then you have to find a professional to help you with it. But that's some people are like, I thought, you know, talk to their customer service and asking them, is this the right portfolio? They can't tell you they can't give you advice. So that's really important. Yeah, customer service and financial advice are two very different things. Two different things. There's all these licensing things. Like there's systems in place that you can't just do that. So that's really important.

Okay, so now I think that sets the foundation for everything. I now want to kind of talk, and it's kind of easy when you're starting from scratch. Honestly, it's so much easier. Most of us aren't though. We've probably opened up an account somewhere and then we want to move it. Most of us aren't though. We've probably opened up an account somewhere and then we want to move it. Most of us have done that. Or even like you had a group RRSP with the workplace you no longer work with. You want to move that somewhere and manage it on your own, which you

absolutely can do. Now let's kind of talk about that scenario a little bit because I think people get really confused. And also like I hear from people all the time, they don't think they can move their money if it's already somewhere. Like you said, you are never stuck. You can change anything and move anything at any time. There's just sometimes some paperwork involved, which is never fun. So if someone, let's say, had a portfolio of mutual funds at XYZ Bank, but they realize, I want to do this on my own. I want to buy ETFs. I want to do my own portfolio. I want to move it to National Bank, direct brokerage. How do I do that? And what if it's in an RRSP? Can I actually move that? I don't want to touch it. On our end, transferring from another brokerage or another investment arm to NBDB is as simple as visiting our website at nbdb.ca. And what you

first want to do is open an account. So that's step one. And once that process is started, once the account is open, then you can start initiating a transfer. And I would say a few things to keep in mind about the overall transfer process is one, it should be an apples to apples transfer, I like to call it, which means that the account types should match one another, especially when it comes to registered accounts. So these would be considered rollovers and should have no effect on your contribution limits. Because you're not withdrawing money, you're just moving an account one place to another place. That's it. Exactly. Apples to apples transfer. Now, in most cases, you also have the option to transfer either in-kind, which is when the investments are not sold and they get transferred

over as is, or you can do it as an in-cash transfer where the investments will be sold and then the cash proceeds will be transferred. Or you could even do a mix of both. Now for non-registered accounts, a big FYI is that if you're looking to do an in-cash transfer, it most likely will trigger a capital gain. So just something to keep in mind when it comes to taxes at the end of the year and the overall transfer transfer process from brokerage to brokerage this can take about 7 to 15 business days in total and maybe even longer if you're dealing with pension transfers like you mentioned so kind of be wary about that especially if you wanted to maybe make some changes to your investments. Maybe it might be better to do that before initiating a whole brokerage to brokerage transfer. And one thing I do want to mention is that at NBDB,

we do reimburse the transfer out fee. So fees are another thing to keep in mind. So on our end, we do reimburse $150 plus tax per account, as long as the transfer amount is more than $20,000 and you place any buy trade within six months of the transfer being completed. So a couple things to just look out for for the whole process is do the account types match? Is it apples to apples? Keep in mind your different options of transferring over. Do you want to do it as is or in cash? The timeline of transferring as well, and then any applicable transfer out fees. Yeah, I think a lot of people aren't aware

that they will likely be charged a fee from the place that they're leaving. That's number one. A lot of institutions do cover that transfer fee because they're getting your business. They're like, oh yes, but not all of them do. So again, when you're doing your research about places, make sure that might be something that's important to you. The other thing I want to make note of is because you mentioned

the in-kind transfer, depending on what kind of investments you have, whatever institution, sometimes they don't transfer over because they may not be available to you. Who knows what you're invested in? But for example, I know you have specific mutual funds at some bank you want to transfer over to a discount brokerage. They may not transfer over and thus it'll be a forced sale of those mutual fund units so you can get cash and move that transfer. So just be aware of that because you may not be aware of that. And that's really important, especially like you mentioned in that unregistered taxable account, because that could trigger a capital gain and that's more taxes you have to pay, which necessarily isn't necessarily a bad thing, but just be aware of that for tax planning purposes. These are things that I

literally talk to people about every single day. So I'm glad now I have a podcast episode to send to them. They're like, we go through everything here. Okay, so now I want to talk about what to do once you have set up your account. Have you got your cash in there? Or maybe you've got your other investments in there. They've transferred over in kind. Let's say you've decided what stocks or ETFs that you want to buy. How do you actually go about doing that? Because I know that's the number of questions like, great, ready to go. How do I buy something, please? Like, it's not as easy as going to the cash register and someone helps you. And, you know, it's very easy.

You kind of have to figure it out on your own. There's lots of different order types, too. And you're like, which one's the right one? A market order, a limit order? Do you want to kind of share a little bit more about that process? Assuming this is ideally after you have already established your investment plan, right? That's, in my belief, the important step one. So your next step should be to do your research. And that's not just limited to research on what stock or ETF to buy. This is when you want to educate yourself on the common terminology when it comes

to the world of self-directed investing. What are the different types of orders that exist? The pros and cons of each type of order? I wouldn't say one is better than the other, as it just really depends on what your intentions are behind every trade. So is your intention to buy or sell a stock immediately and price is secondary? It's not your priority. If that's the case, then you can consider market orders. If you do care about the price, then maybe you should take a look at limit orders, stop orders. Those can also come in handy if you already own the stock and you're looking to form some sort of safety net while you're watching the price go up and down. So there are a lot of new terminology to learn in the world of self-directed investing. Definitely a ton of research and resources on the different types of order types like we mentioned.

All of this is included in our learning center on our website which i find is a great starting point for new investors and there's a lot to learn out there it's not just what's my next stock to buy what etf should i purchase i think the pre-step before that is getting to know the inner workings of what it truly means to be self-directed, which means what are the different order types there are? What does the quantity mean? Even though to us now, it seems really simple. It's just the number of shares we're looking to buy, but you don't normally come across how many shares when you're doing simple investing, like putting everything in a savings account. So basic terminology,

I think is a good start for new investors out there. Yeah, I mean, that's the I think, intimidating part is there is a whole like kind of dictionary for financial terminology. I mean, I use Investopedia all the time, quite honestly, so my go, there's a new one, okay, and then I just Google it and see what comes out. But then eventually, it part of your own language and it doesn't seem super intimidating. But that was a big thing when I started self-directed is just really getting comfortable with the different terms and, you know, not feeling like, oh my gosh, I should know this stuff already. It's okay if you don't, you can learn it.

And just talking about the different order types in general, like I honestly always just do a limit order and that is for my own sanity. I like that certainty of knowing how much I'm going to buy or sell something for that peace of mind. So that might be something if you're getting started to maybe like, maybe that's the right fit for you. Market orders again. Yeah. Like you said, if you don't care about price, but yeah, I think a lot of people that will think a market order is just means like I'm selling it in the market. So that's just a regular order. And they do it. They're like, what? I bought that for way more expensive than I thought. What the heck is going on? Yeah, there's a little bit of risk there. So you just got to be aware of the pros and cons of each of

them because they all exist for a certain reason. So you got to figure out which one is the right fit for you because you may do it and you're like, that is not what I want to do. Now, I also get a lot of questions about USD because I think up until this point, we've pretty much just been assuming you're just buying Canadian securities, stocks, bonds, ETFs, all that kind of stuff. But a lot of people want to buy US stocks, US listed stocks,S. listed ETFs. And unfortunately, we have to do some annoying things of currency conversion and stuff like that. If someone does want to buy U.S. stocks, U.S. ETFs, what does that look like with, you know, especially too with national bank direct brokerage? How does that happen? Do you, you know, because I think

a lot of people like, oh, I could just do a normal order and buy that, you know, whatever us stock Coca-Cola. It's not that simple. I mean, you could do it that way. But there are better ways to go about getting that USD exposure. So the majority of accounts like cash accounts, TFSA, RSP, and many others, they are also available in U.S. currency. And what that means is you can invest in U.S. stocks and ETFs with the benefit of not having to go through a foreign currency exchange back and forth each time you place a trade. So ideally, you would convert, let's say, Canadian to US once. And then as you're trading, buying and selling throughout the days, the months, the years, your US dollar will stay as US dollars. So you don't have to go through that foreign exchange each and every time. I would say another benefit is that US stocks, they are generally subject to a 30% withholding tax on dividends for anyone that's

not a US resident. So many countries, including Canada, we have tax treaties with the US to just ensure that there is a reduced rate for that withholding tax. So for qualifying Canadian residents, the tax can be reduced to 15% overall. Or if you're doing any U.S. investing in an RRSP, then that tax is reduced to 0%. So I think that's something to keep in mind, especially if someone wants to do a dividend investing plan, which account type is better for that. Yeah. And I think in general, it's best to do it in the RRSP or to do it in your taxable account. Not as ideal in a TFSA because I don't believe, and correct me if I'm wrong, that that treaty exists within the TFSA. Exactly. Okay, perfect. So make sure, again, you choose the account type based off of your goal, but also what currency are we playing with? Now, I'm curious now,

when it comes to currency conversion, or how do you actually facilitate that with, say, national bank direct brokerage? Is there, you know, obviously, there's probably a currency conversion fee. And is it a common practice? I know lots of people do it, doing Norbert's Gambit, that kind of way to kind of lower those fees. I mean, both options are available at NBDB. It just depends on, I guess, the convenience of it and how long are you willing to wait depending on which method you choose. So we do offer a way to just do a straight exchange. You see the quote and then whether you choose to do the exchange, you see the quote, and then whether you choose to do the exchange, everything is instant. So you get your US cash instantly ready to trade. You could also do Norbert's Gambit. So that is an option on our end. But because of settlement times and whatnot, there is, I guess, a time delay.

A couple days for sure. Yeah. And for anyone who's listening who doesn't know what that is, I do have a video on my YouTube channel all about it. But basically, it is just a strategy to take your Canadian cash and buy an ETF, transfer it over to the US side of your account, and then sell those ETF shares for USD cash. It sounds more complicated than it is, and it can be inconvenient if you need something right away. Like if you need something right away, you shouldn't do that. But if you have time on your side and want to lower those fees or save some money in currency conversion fees, it may be something you want to look more into. When we're talking about some things that self-directed investors should be tracking since they are effectively their own wealth managers. And I want to just really say that again, because you are your own wealth manager. So it is all up to you. So you do need

to be nice and organized. What are some things that people should track? Some examples I'd say is like your contributions. Most people, I was just talking to this here for another reason, was sort of related. And I mentioned like, oh, yeah, I have a spreadsheet because I'm a nerd and I track my TVSA and RSP contributions. So I never accidentally over contribute. I always know at every point in time in the year, I know exactly how much room I have. And he's like, wow, no one. I've never heard of anyone doing that. So tell me what are some really important things people should be organized about and keeping track of when they're their own wealth managers? Yeah. And I love that you mentioned, you know, or you emphasize the self-directed part of

managing your own investments and tracking contributions, registered account contributions. I would say that's pretty important. So knowing what type of accounts there are and their intended purpose, that's important as there can be costly consequences if you don't really understand the different account types and what their intended usage is for. For example, you mentioned the TFSA. So TFSA, it's great for growing your savings as the gains and earnings are not subject to tax, but you can't just deposit a million dollars in your TFSA for most people. And what happens if you over-contribute to a TFSA? Do you know what your TFSA limit is? If you accidentally over-contribute into a TFSA, then you can be

penalized a certain percentage on that excess amount. So contributions, withdrawals, and returns, those are all important things to keep track of, which you can easily do on the NBDB platform, while things like tax documents, tax slips that can help with tracking capital gains, dividends, and then of course, comes in handy during tax season as well. And definitely like, you know, tracking your returns. Most people, you know, tracking your returns. Most people, you know, when you're working with an advisor or robo-advisor, they make it really simple, like here are your returns for the year. But if you're your own manager and you're doing a lot of different, you know, buying and selling and stuff like that, really important to also keep track of the dividends you're earning, your overall total return, things like that. One

thing I do want to mention when it comes to specifically tracking when it comes to your RRSP. So a lot of Canadians have a registered pension or a group RRSP. It's really important to know, okay, how much room do I have for my personal RRSP? If I have a pension, that pension reduces your personal RRSP contribution room because it takes up some of it. But if you have a group RRSP, it doesn't make it as simple when you get your tax return to be like, this is how much is for your pension and this is how much for your personal RRSP. So it's so important that if you have a group RRSP with your work to track your personal contributions, if you have it with National Bank Direct Brokerage with your own portfolio,

but then you're also making contributions to that group RRSP because they're assuming that you're keeping track and that you're not going to over-contribute. And again, factor in if your employer is matching your contributions. Because again, I see this all the time where people are like, I didn't know. And then they like over-contributed and then they have this big penalty, this interest that they have to pay. And they're like, oh shoot. And then they like over contributed and then they have this big penalty, this interest that they have to pay. And they're like, oh, shoot. And it's avoidable if you just keep track of things. So, you know, to help tell people all the time, have a little spreadsheet. I've got one in my investment course that helps people. And this also goes for RSP contributions, our ESP

contributions and FHSA contributions, because there's always some limit and everyone's, you know, amount is different. So please keep track of things. I know it sounds tedious, but your accountant's going to be happy, you're going to be happy. It's worthwhile for everybody. I want to kind of shift and talk a little bit about some mistakes that self-directed investors make and should avoid. And no shame, because we've all made mistakes. And as long as you use it as a learning lesson and you don't do it again then you know it is what it is that's life but tell me some of the most common mistakes that you see new especially self-directed investors make and shouldn't yeah i mean as much

as us investors would love to have a perfect mistake-free experience, I do believe that experience, both good and bad, is one of the greatest lessons to learn. And I know, personally speaking, I've learned both the good and bad when it comes to managing my own investments. And we're all susceptible to making decisions based on our emotions. But as most of us have experienced, letting feelings of fear or greed drive our decision making usually doesn't turn out too well. So the same principle applies when you are investing. And even for seasoned investors, relying simply on that gut feeling, not really the best strategy out there. So investing objectively helps ensure that self-directed investors, they're motivated by rational decisions and fact-based choices.

I would say some tips and tricks would be to take a rational approach when it comes to your investment decisions. So this allows you to make sound choices based on facts rather than impulsiveness, emotions, and you kind of avoid that behavior bias as well. Another tip would be to just be impartial about your investment choices. Again, remove the emotions out of it, the bias out of it, and kind of tying into this, but maintain your composure during market highs and market lows. So remember that investment plan that we spoke about sticks to your plan. And I would say another thing is to just distance yourself from market hype, rumors and misinformation, because not all information, not all research is good or at least reliable out there. And it's

critical to avoid making impulse choices because decisions based solely on emotions that can lead to, you know, financial disaster if it really gets too out of hand. So rely on those fact-based decisions and invest objectively. I will say it's sometimes it's easier said than done because we are all human and we do have that human behavior. Those biases come into play all the time, especially when there is a lot of uncertainty, a lot of volatility in the markets. So it's one of those things where you may make some mistakes at the get-go and that's just part of being a new investor, but you will build, I feel like, that resilience to it as long as, again, you remind yourself, okay, I made that mistake. I hit sell instead of just doing nothing and buying when the market was

a bit crazy. I don't want to do that again. I regret that decision. So the next time it happens, because it will happen again, don't make sure you stick your guns and you just like, yeah, I'm going to not do anything or I'm going to actually hit buy even though it's just psychologically, it's so hard to hit buy when everyone's selling because you feel like I should be doing what they're doing, right? No, that's called herd mentality. We don't want to do that. So, so important to remind yourself of what you're doing. And I'm telling you this because I know we're going to see a lot of volatility likely in the next little bit. And what I always remind people of too is if you need a reminder of that, look at history. Like literally look at the stock market

charts, the Canadian stock market, US stock market. And whenever it goes down, it goes back up eventually. But then you can kind of all see, you know, when are people panicking, you can easily look at the stock market chart and look at the financial news of that day and see like, that's why people panic because there is an article that said panic. Right? So we need to just be aware of that. With that, I'm curious, do you have any suggestions on how people can kind of regulate their emotions a little bit more? Did you ever have any situations that you experienced? You're like, oh, I let my emotions take the wheel. Wish I didn't do that. I guess to avoid that is I like to take a step back sometimes.

I like to reevaluate. What am I actually doing in my accounts? What was my original plan should I be taking this amount of risk if I want these savings here to go towards the down payment of my first home and then I plan to purchase a home in one to two years so taking that step back and just nice little breather that's usually pretty helpful to regulate your emotions. And like you mentioned earlier, mistakes are prone to happen to everyone. We're not all immune to it. So being able to learn from those mistakes, I would say is really important. And I mean,

emotions, they'll get the best of everyone. But like you mentioned as well, it's all about the learning experience and taking that step back. Yeah. And just to jump off that, that just reminded me, I've been obsessed with this real estate selling show. It's like Million Dollar Listing New York. I don't know. I just can't get enough of it. I'm obsessed. And I've watched way too much. And there's this one episode where this person was going to buy this really expensive condo, and they seemed to have a lot of money. And then they had to pull out of the deal because they had all of that, like a good majority of their wealth in one stock that then tanked. And then they couldn't buy the house.

And we, when it comes to like a goal where you need the cash to then do the down payment or whatever the case, you need to have a kind of, I'm going to get this wrong, but it's like when you're landing the plane, you need to have a plan to land that plane. And you can't land that plane like the day before you're going to make an offer. Like you need to make sure, and the same with like retirement, you're not going to just keep all of your money in 100% stocks and then retire the next day, you need some cash in the bank for what if the market dips tomorrow? And then that means you have to work another six months. So again, that's another element to add to your plan is when we get closer to that target date

of our goal, when do we need to land this plane? We want to give ourselves some breathing room because again, we can never predict what's going to happen with market. You want to make sure you are prepared for whatever happens. And that goes the same with when you are deciding how much risk to take with your portfolio. Really know how much can you stomach. And sometimes- And be honest with yourself. Be honest with yourself. Because it's one thing to be like, oh, I've taken all these questionnaires and they say

this and I've got a high risk tolerance. But you really have to live through something to really find out what your true risk tolerance is. And there's no shame in then adjusting your asked allocation to something more conservative. If you feel like, yeah, I was in something too high risk, it just didn't make me comfortable. Because then that's going to make you feel like you need to pull everything out. Really, you just need to make an adjustment. Before I let you go, I know we've kind of touched on really key things that self-directed investors need to know.

Is there anything else you'd like to share? Anything top of mind that, you know, when you're talking to investors, you want them to know? Do your own due diligence. That's important. Be disciplined. And don't forget to diversify. And when I say diversify, it means both your investments and your own research sources.

Just because like you mentioned out there, there's a lot that's out there, good and bad. And that could be in the form of your normal type of research mediums like articles, BNN, Bloomberg, but it could also be close to home. Could be your friends and family that are also doing their own investing. Are they reliable research sources? Only you can tell. And that differs with everyone. So do your due diligence, be disciplined, and don't forget to diversify. And that includes diversifying your investments and your sources. Yeah. Don't just get all of your investment information you know, information from Reddit.

We need to diversify that a little bit. Get some other perspectives. That was a time. Yes. That was a time. That was a time. And I don't want to go back there. I do not want to go back to it.

But yeah, make sure you're, you know, there's nothing wrong. Obviously, I'm a person that creates content online. It's, you know, totally fine to get information online, but make sure you're also reading books reading credible resources. Yeah, I think that's a really great kind of note to end on. So before I say goodbye, where can people find more information about National Bank Direct Brokerage? And you mentioned that there's a learning center, what can they expect there? Yeah, I mean, our website is nbdb.ca, so nationalbankdirectbrokerage.ca, but it's just the acronym. And there we have a ton of educational resources in all sorts of formats, which you can

find under the learning center tab. So that's where you'll find some short and sweet articles on different types of investment topics from beginner to novice to expert investors. We also have webinars that if you prefer something that's more interactive or live, we do have a section for that. And we also have our very own YouTube channel. And that's where you can find different videos on how to navigate the different sections of our platform, but also some educational content on there as well on ETFs and options trading. So there's something for everyone depending on how you like to consume your research. Amazing. Well, thank you so much, Anne, for coming on the More Money Podcast. I know a lot of people listening are going to leave having a lot more knowledge than they did before this episode.

So thank you so much for coming on the show. Thank you for having me. It was a pleasure and I had a lot of fun. And that was my episode with Anne Lee, Business Development Manager at National Bank Direct Brokerage. Make sure to check them out, nbdb.ca, where you can find more information about this no commission trade. Amazing Canadian discount brokerage if you want to be a self-directed investor. And they also have a really great learning center. It's free resources, free webinars, things that can help you grow your financial confidence and knowledge base.

I mean, you know I check these things out. You may not know this, but I'm subscribed to so many bank and discount brokerage newsletters so I can watch their webinars and take advantage of all their free content because these people know what they're talking about. And it's free and it's great information. And like we mentioned in the episode, it's really important to diversify where you're getting your information. I'm glad that you're listening to this podcast. I hope you're also reading books and reading other credible resources and learning as much stuff as you can from as many different perspectives and voices as you can. So that's what I've got to say about that. Just a few other things I want to let you know about in case you don't know. First and foremost, and I've been terrible at promoting these and I'm going to start promoting them more on my Instagram. I have a number of budget spreadsheets if you want to get

your financial house in order because maybe you want to start investing, but you know you have, you know, cash flow issues and you're just not ready in that respect. I've got some great budget spreadsheets you can check out at jessicamorehouse.com slash shop. Not only that, and this is whether you buy one of my budget spreadsheets or you're using some other platform or someone else's budget spreadsheet, I don't care. I also am opening up the doors to pre-register for the next cohort, cohort two of my budgeting together accountability group. I'm currently doing cohort one, absolutely loving it. It is really just so we can

get together and do our budgets together. So it's not budget coaching or anything like that. You already know what you need to do. You just need the motivation to do it. And the reason I started it is because I honestly, I was getting lax on my own budget and I wanted a mechanism where I can get together with people and we do our budgets and we see a progress and we cheer each other on and, you know, we have something to look forward to once a month. So you can find that also at jessicmorehouse.com slash shop. And lastly, if you do want to learn more about self-directed investing or even using a robo-advisor, I go through everything under the sun that you need in a very specific guided way in my Wealth Building Blueprint for Canadians course. I've

helped hundreds of Canadians go from, I have no idea what I'm doing to, oh my gosh, I just very specific guided way in my wealth building blueprint for Canadians course. I've helped hundreds of Canadians go from, I have no idea what I'm doing to, oh my gosh, I just bought my first ETF. This is so exciting. Oh my gosh, my net worth has increased by 50%. I don't know. There's been some amazing, amazing case studies and amazing wins that I've seen from students over the years because I've had this course for almost four years now. So if you want to learn more about all that, go to jessicamorehouse.com slash course. It is all about how to be a passive investor, investing in index funds, making that investment plan that we talked a lot about in this episode, and then taking action and then maintaining it. And then

also you get access to so many amazing things, such as a private email to reach me at, but also a private online community you will always have access to with other students. You can ask me any question under the sun at any point. You get lifetime access to this course, what they think is really special and unique because lots of courses are not. And you also get a one-on-one with me after you finish the course. There's a little incentive for you to actually complete it, get it done, and take action. So jessicamorehouse.com slash course is where you can find that. And lastly, don't forget to pre-order my book coming out in a few weeks, well, maybe a month. jessicamorehouse.com slash book is where you can find more information about that.

The title is Everything But Money, The Hidden Barriers Between You and Financial Freedom. And if you pre-order now, you and go to JessicaMorehouse.com slash book, you will get access to a bunch of freebies and extras, things that are, you know, worksheets, videos, audio that are, you know, a companion to the book that you'll only get access to if you pre-order my book. So check that out. Okay, that's plenty, if not too much for me. Thank you so much for watching and listening. I can't wait to see you back here next week with a fresh new episode of the More Money Podcast. Until then, have a good rest of your week, and I'll see you soon. The More Money Podcast would not be possible without the amazing talents of video editor Justice Carrar and podcast producer Matt Rideout, who you can find at MRAVCanada.com. This podcast is distributed by the Women in Media Podcast Network.

Find out more at womeninmedia.network.