Teachers Changing Lives

As we grow older, we often reflect on the moments that have shaped our lives. For me, one of those defining moments was in grade 12 when my capital market teacher advised us to open a Tax-Free Savings Account (TFSA) and invest in low-cost, index-tracking ETFs like $VTI. It was a simple piece of advice, but it has had a significant impact on my financial future.

$VTI, or the Vanguard Total Stock Market Index Fund ETF, is a popular investment option for those looking for broad market exposure with low fees. As of April 25th, 2023, it's top holdings include some of the most successful companies in recent years like Apple Inc., Microsoft Corp., Amazon.com Inc., Facebook Inc. and Alphabet Inc. Class A. $VTI has delivered impressive returns for investors over the years, with its 1-year return at 24.10%, 5-year return at 17.95%, and 10-year return at 15.13% as of April 25th, 2023.

Since following my teacher's advice, I've been consistently maxing out my TFSA with $VTI contributions, which has allowed me to build wealth over time while also providing me with some financial freedom. However, investing in a TFSA and low-cost index-tracking ETFs like $VTI requires discipline and restraint.

One of the challenges I've faced is the temptation to withdraw the money and spend it on something frivolous. To overcome this challenge, I've limited the number of times I access my account each year, which has helped me avoid making impulsive decisions and stay committed to my long-term financial goals.

Another challenge I've encountered is the tendency to become complacent and take unnecessary risks knowing that I have a safety net to fall back on. This recklessness is something I've noticed in myself, and I have yet to find a solution to it. However, being aware of this tendency has helped me take a more measured approach to my investments and avoid making rash decisions.

It's important to note that this blog post is not intended to be financial advice. Rather, it's an opportunity for me to share my personal experience with investing in a TFSA and low-cost index-tracking ETFs like $VTI. I strongly encourage anyone interested in investing to do their research, seek advice from a qualified financial advisor, and make informed decisions based on their individual financial goals and circumstances.

When it comes to investing, there are many pitfalls to avoid. One of the most common is falling for the "get rich quick" mentality. Investing is a long-term game, and there are no shortcuts to success. It's important to be patient, disciplined, and focused on your long-term financial goals.

Another mistake to avoid is falling for online investment gurus or paid courses promising to teach you the secrets of successful investing. While there is certainly value in learning from experts, it's important to be discerning and do your due diligence before spending your hard-earned money on these services.

Finally, it's crucial to avoid jumping in on trends and making impulsive decisions based on market fluctuations. Investing requires a level-headed approach and a long-term perspective. By staying focused on your goals and avoiding short-term thinking, you'll be better equipped to make informed decisions and achieve success over the long haul.

In conclusion, investing in a TFSA and low-cost index-tracking ETFs like $VTI can be a great way to build wealth over time. However, it's crucial to exercise restraint and avoid making impulsive financial decisions. By being mindful of these challenges, we can make more informed decisions and achieve our long-term financial goals. I am grateful for my teacher's advice and would encourage anyone interested (in his class) in investing to consider low-cost index-tracking ETFs like $VTI as a way to achieve their financial goals.