A Money Coach in Canada

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This one’s for you, Telly 😉

stock-market-bull.jpgSo, a lot of the time when I’m a guest speaker and tell my story about my own foibles with money, what I HOPE people will grab onto are the little habits and changes-of-thinking that got me turned around. What most people DO seem to get all excited about is that I learned how to do my own investing via a group of about 12 women who taught ourselves how to invest. (we called ourselves Twanda, for anyone who’s seen ‘fried green tomatoes’).

The world of investing seems to be an area of confusion, intimidation, and yes, boredom for most of us. We know it’s important, but our eyes glaze over, and the thought of reading financial pages is right up there with listening to MPs in parliament. bored

Here is an Extremely Brief explanation of how we did it.

1. There were about 12 of us, who committed to stick together for 5 years. This long Is NEEDED, trust me on this, to make it worth it. None of us had any financial background at all. No financial planners. No book-keepers. No econ majors in the group (we were a lot of film types and health care, and educators).

2. We formed a limited partnership and got set up with a bank account at our local credit union, with the Chair and Treasurer as signing officers. We got a self-serve brokerage account too.

3. We each paid $30 per month into the kitty. Every 6 months or so, we had $1500 (about the minimum you’d want to aim for) with which to invest.

4. How did we choose what to invest in?

a. We read the Beardstown ladies, and read a lot of The Fool. We also checked out ChicksLayingNestEggs.

Note: These days, these are all still good starting resources, but there is a rich mine of DoItYourself information available from your fellow Canadians who blog about their personal investing. It takes a while to develop the vocabulary and get the significance of their posts, but over time, it will become easier. Money Relations is a great place to start – my favourite, and uses layperson’s language. More technical/advanced blogs include CanadianCapitalist , FinancialJungle and GuerillaInvestor (very manly, that one!). There are lots out there – poke around.

Anyway, we taught ourselves some of the basics: how to evaluate a company. Key ratios like P/E, Margins etc. It sounds complicated, but honest, once you get it, it’s sooooo easy. Kinda like learning to ride a bike.bike

b. We kept our eyes open for companies we used in our regular lives, that we liked, and believed had a future.

SunRype made us a ton of money. Rona did even better. Avon would have done well, but the currency fluctuation held us back (oops! hadn’t thought of that. Live and learn!). Le Chateau also did us very proud. Each person would take a turn presenting a company including the financials.

c. Every 6 months we’d review the companies presented and debate which one to buy this time ’round. These debates got intense! I wanted starbucks, but other people didn’t like their ethics. Another member wanted Weightwatchers, but we only liked companies that had been public at least 5 years. As it turned out, we could have made a chunk of change, and the member didn’t let us forget it!

Mostly, we used a lot of common sense. Has the company been around a while? Is it a fad, or here for the long term? Do they have a good enough cash flow to keep going for the forseeable future? Do we like the people managing it? All of this took research of course, but isn’t too much different than simply checking into an individual’s personal finances – do they overspend? Do they have savings? Do they have debt? Is their networth growing or diminishing – are they making something of themselves? And are they good citizens?

5. If I recall correctly (I think I do) we never made less than 18% in any given year. This included the 2000 disaster. But more importantly than the money, we each developed a sense of competence and enthusiasm for investing.

Please, oh please – none of the companies above are my recommendations (we bought – and sold – them years ag0) and none of the above should be in any way construed as advice. I’m a money coach, not an investment advisor. It’s simply the experience I had that taught me how to make my own investing choice.

Twanda!

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

7 Comments

  1. Hi Nancy: Thanks for the plug. And thanks for sharing your interesting story.

    [Reply]

    Jan 18, 2008
  2. Excellent step-by-step. I’ll link into it as a follow up to your guest blog. Thanks!

    [Reply]

    Jan 18, 2008
  3. Hey, thanks for the mention!

    I have loads of questions 🙂

    I’m assuming you’re no longer with this club? Why? And the follow up would be why not start another? Is it better to invest with others to hold you accountable or was it a stepping stone?

    Why only women? Was it a conscious decision for empowerment or were men not interested?

    How many companies did you hold overall during this 5 years?

    A lot of DIY are indexers. What do you think about this now that you found success with picking your own stocks?

    Okay, I’m out of questions.

    Great read, Nancy!

    [Reply]

    Jan 18, 2008
  4. @canadian capitalist and @thickenmywallet – tx to you, for being solid resources for people just dipping their toes in
    @mariam I have loads of answers!
    I left because the 5 year term of commitment (and we didn’t hold fast to it – one woman became convinced that capitalism was dirty and didn’t want to participate anymore; another woman was not delightful and just left period) – anyway, the term was over. I left because I wanted to pull out my share to use to launch my business. Several are going strong to this day. I miss the group!
    The benefit of working within a group was partly the discipline, but also, sharing the work of research and most of all, other women would think of companies it didn’t occur to me to check out.
    Women only – yes, to keep the dynamic clear and comfortable. Having said that, I launched another group, and although it was open to anyone, only 3 of the 18 were men, and they left. I honestly don’t think it was the other people, so much as I think more women acutely feel their disempowerment and want to do this, whereas men maybe feel more comfortable going it alone (just conjecture)
    I think we held about 10 companies or so (remember it’s been 5 years since I left). Index funds? They were very, very new then. I suspect it would take an element of the fun of it out – ie., really digging in and getting to Know an individual company, and tracking all the gossip about it in the financial pages (how juicy is it when M. Stewart goes down; or Jobs gets fired and brought back; or Howard Schultz is pulled out of retiement etc.)

    [Reply]

    Jan 18, 2008
  5. telly

    Thanks so much Nancy!!!
    Your story is great and very inspiring. I definitely think I could get a women’s investment group together!
    It’s been ages since I’ve seen Fried Greeen Tomatoes but it was one of my all time favourite movies. 🙂

    Thanks for the awesome post and for answering mariam’s questions as well.

    [Reply]

    Jan 28, 2008
  6. @telly – my pleasure! And best wishes if you proceed with creating your own investment club.

    [Reply]

    Jan 29, 2008

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