On my journey to financial independence, I challenged myself to save $1,000 and contribute that to my Registered Retirement Savings Plan (RRSP) account. This RRSP account sits with Wealth Simple on its trading platform. My RRSP contribution room for 2020 is about $4000.
The goal is to grow my RRSP from $1000 to $5000 by December 31, 2021. Since I earn just over $31,000 a year at the moment, I plan to use up the contribution room for my Tax-Free Savings Account (TFSA) first.
Then, the next plan is to increase the funds in my emergency fund account by twenty percent (20%); only after that will I try to make $500 monthly contributions to my RRSP account. So, for now, I have only contributed $1,000 in my RRSP account in 2020.
One quote from the Bible which encourages me to invest when I want to spend instead is Ecclesiastes 11v1-2, which says:
Cast your bread upon the waters, for you will find it after many days. Give a portion to seven, or even eight, for you know not when disaster may happen on earth.
Hopefully, it encourages you as it does me.
Investing in the Stock Markets Last Week: $1000 to $5000 RRSP Challenge
In this blog post, I will talk about the following things:
Why Invest in the Stock Markets?
The stock markets, if done properly, are one of the few ways you can make 5%, 10%, 20% and sometimes 100% of your initial investment. However, much like buying and selling of visible commodities, I have learnt that you have to buy low and sell high.
Until recently, I had only little success investing in the stock markets. I lost over 20% of my TFSA portfolio by the time the markets recovered in September. I’m not sure how I stumbled upon his YouTube videos, but after monitoring most of Chris Sain’s stock picks, and my account was over 32% by December 1, 2020.
I also joined a Discord group of more seasoned stock market players who have been of tremendous help. The guys on that group have helped me understand stock market terms and taught me to bask in ‘red’ days as those are sale days.
Before the end of the year, I will by God’s grace register for a stock-picking course and hopefully, I’ll be able to make more informed decisions on my own when purchasing a stock.
The Companies I Bought Shares In
I currently have shares in 3 companies in the US stock market. Wealth Simple charges a 1.3229 exchange rate (as at November 25, 2020) on the Canadian Dollar for every purchase made.
Initial Investment: $1000
Purchases: EBAY, At Home and Rocket
EBay Inc.: EBAY
Total Shares: 2 shares x $50.17 (USD)
Total Cost (USD): $100.34 (USD)
Exchange rate: 1.3229
Total Cost (CAD): $132.74 (CAD)
Remember Chris Sain? The stock picking YouTube channel? He recommended this stock because it’s the holidays. More people will shop online because it’s risky going to the shopping centres at the moment.
After Chris had recommended this stock, I did some more research myself on EBAY.
After doing my research, I found that EBAY had a large market cap and had done well with their 3rd quarter earnings. It has also grown considerably as a stock in the last 5 years and brings some competition to Amazon, Etsy and Shopify. And competition is good.
At Home Group Inc.: HOME
Total Shares: 2 shares x $18.84 (USD)
Total Cost (USD): $37.68 (USD)
Exchange rate: 1.3149 (as at November 30, 2020)
Total Cost (CAD): $49.55 (CAD)
Again, this is one recommendation of Chris Sain’s YouTube Channel. Chris said that HOME had made consistent profits over the years, but the stock price had moved little.
After doing some research, confirmed most of what Chris had said. HOME made consistent profits, especially in its 3rd quarter earnings, and projected even more revenue this festive season, same as EBay.
Total Shares: 30 shares x $20.65 (USD)
Total Cost (USD): $619.50 (USD)
Exchange rate: 1.3229 (as at November 25, 2020)
Total Cost (CAD): $819.56 (CAD)
Don’t do what I did on this purchase. I did my research after I purchased the shares. My confidence came from the fact that this recommendation came from a very experienced stock picker. Either way, experienced or not, do your own research.
I will take a stock research and data analysis course before the end of the year. I hope that it will help me research better so I can pick stock for myself and not wait for recommendations.
Don’t be afraid to invest in the stock market or working your way to financial independence.
If you want to mirror my trades before I give summaries at the end of the week, you can follow Chris Sain as 50% of my trades come from him. You can also watch what ARK Invest is buying. In both instances, please do your own personal research. Other YouTube investment channels I follow are Joseph Carlson and PPCian.
If you have questions, leave them in the comments below and I’ll do my best to answer them.