My $50,000 Mistake (Kind Of) 😬

Happy Friday! I feel like ‘Friday’ and ‘the 1st of the month’ don’t really go together, but the good news is that it’s officially the weekend - so, we’ll take it! 

We’re back with another issue of Money Convos with Steph & Den, and this one is jam packed full of information and money tips you can use throughout the month. 

Here’s what’s up in this copy 🤑🗞 

• When should you be investing money? ⏰

• Steph’s UberEats challenge is almost over… 🫢

• November = FLM 🤓

• How to do Black Friday the right way 🛍️

• We have a question for you 👀

Money Convo Of The Month

Should You Dollar Cost Average or Lump Sum Invest?

If you have money to invest, should you invest all at once, or slowly over time? 

I had this question earlier this year, when I switched up my investment strategy and had about $50,000 to reinvest - at the time, I felt more comfortable investing it in chunks of $10,000 over five months… based on nothing other than the fear of doing something wrong somehow by investing it all at the same time. But, was that the right decision? 

Well, there’s actually a concrete answer to this question - according to multiple different studies, investing your money all at once, and benefiting from time in the market, performs better over the long-term the majority of the time, as opposed to having it sit in cash and investing it slowly. 

There are names for those two strategies - dollar cost averaging and lump sum investing. 

Dollar cost averaging is a strategy that involves investing a set dollar amount into the same investment option on a consistent basis, regardless of the current price of that investment option. For example, Dennis and I both invest in the same ETF once per month on the same day - we don’t look up the current price of the ETF, we just purchase it monthly on the same date no matter what. 

This strategy takes advantage of the fact the market is sometimes up, and sometimes down, but it generally trends upwards over the long-term. The benefit with this strategy is that, historically, it ensures that you aren’t missing out on the best days in the market - even though you’re sometimes purchasing investments when they’re priced high, you’re also purchasing investments when they’re cheaper or ‘on sale’, and you’re ensuring that your money is invested consistently. 

Lump sum investing is a strategy that involves investing large amounts of money all at one time, and it’s pretty much the opposite of dollar cost averaging. For example, whenever Dennis and I pay ourselves a bonus at work, or we receive a monetary gift, or when we get a tax refund, we invest that bigger chunk of money (or lump sum) all at one time. 

This strategy ensures that your money is invested as soon as possible, and research shows that investing it all at once, and taking advantage of your money being invested in the market longer, is typically better than spreading it out, and having it sit in cash losing purchasing power. Now, this is true the majority of the time, not always - it depends on the specific days that you end up purchasing investments. However, since no one can predict the future, and what will happen in the market, this strategy is the one that has historically led to better results the majority of the time. 

This basically means that time in the market is better than timing the market. Timing the market is what active investors do in an attempt to beat the market’s results. It involves guessing when the market is at its current low point, and only buying investments at that point, but the problem is that it's just a guess. 

But wait a second… what if you don't have a lump sum of money to invest?? 

That’s the reality for most people, most of the time. We make money on a consistent basis (typically on a bi-weekly basis), and then spread it out between our expenses and savings. The good news is that dollar cost averaging is still a great strategy for our consistent, monthly investing. Then, whenever we do receive a lump sum of money, it’s likely better to invest it all at once. Remember, this isn’t financial advice, and nothing is guaranteed with investing - although this is a research backed approach, no one can promise that this will be the best approach at all times in hindsight, so keep that in mind as you invest.

So, back to my original question - no, in hindsight, splitting up my $50,000 into five chunks wasn’t the right decision. Moving forward, when I personally have extra money to invest, I’ll be using the lump sum investment approach. 

If you want to hear more about dollar cost averaging and lump sum investing, check out our recent YouTube video for more information and examples.

$0 UberEats Challenge - Steph’s Monthly Update

I can’t believe this challenge is almost over! 

I set the goal of spending $0 on takeout of any kind this year (aka no delivery apps, including UberEats since it was my main go to) in January, and I honestly thought that it would be hard. I knew that I was really motivated to stick with it at the beginning of the year, but felt like I was probably going to crack at some point as time went on.

Instead, it became easier to do as the months went on. I guess that goes to show that building a habit takes time, but once you’ve built it up, it becomes a lot easier! 

At this point, I don’t really see myself ordering takeout on a frequent basis ever again. I’ve really enjoyed cooking from home more - trying out new recipes has been fun, and I’ve gained a lot of self confidence and empowerment from improving my skills. I’ve also really loved going out to eat at restaurants in person when I want to treat myself, instead. I live in an amazing city (Toronto), and I love taking advantage of that. 

With all of that being said, here’s how I did with my food budget in general in October. 

I ended up spending $308.52 on groceries, which is close to my $300/month budget. We did a Costco stock up again this month, which included meat and cleaning supplies for the next few months. 

As for restaurants… I ended up spending $268.84, which is well over my $150/month budget for the third month in a row. 🫣 Now, I have a reason for this - I had something happen with my family this month (don’t worry, everyone’s okay now!) which lead to a few extra food stops throughout the month. Given the circumstances, I don’t mind the extra spend in this category at all (but I will aim to be under budget next month!).

I also spent $47.60 on coffee shops, which is under my $50/month budget.

That means I spent a grand total of $624.96 on food in October. Stay tuned to see how I do next month!

It’s Financial Literacy Month! 🤓 

Did you know that November is Financial Literacy Month? 

Financial Literacy Month is all about making money simple for people, which is exactly what we try to do all year long, so it’s obviously our favourite month (other than May through October when it’s warmer out). 

We came up with a list of topics for you to learn more about this month. Pick the topic that you’re most interested in, and take some time this weekend to learn more about it. It should only take 30 minutes or less, and you’ll feel accomplished (and more financially literate!). 

• Have you created a budget yet? If not, learn How To Budget For The First Time here

• Do you know if you need life insurance and/or which type to get if you do? If not, learn about Life Insurance, Explained here

• Have you started to invest yet? If not, learn How To Invest In The Stock Market For The First Time here 

• Do you understand what Exchange Traded Funds (ETFs) actually are and how they work? If not, learn all about ETFs, Explained here

We’ll also be sharing several videos dedicated to Financial Literacy Month on our YouTube channel in November, so subscribe if you're not already so you don’t miss them!

Black Friday Is (Almost) Here! 🛍️ 💸

ICYDK, November is also the month that has Black Friday, aka the day that everything is on sale (or at least that’s how it feels!). 

Black Friday sales usually start happening in early November - it’s more like a month-long sale at this point. 

The thing is, sales can sometimes lead to you spending more money than you would overall if everything was full price! 

Here are our tips to help you stay in check this month - 

• Only buy items that were already on your list - if there’s a big ticket item that you’ve already been meaning to buy, then take advantage of it being on sale 

• Consider buying holiday presents - if you’re already going to be buying gifts for the upcoming holiday season, think about buying in advance when everything is already on sale

• Stick to buying items that are usually really expensive - things like mattresses, or furniture, or specific tech items can be more beneficial to buy on sale, so (if you were in need of an upgrade anyways) now might be a good time to buy them

• Look into phone plan deals - sometimes telecom companies will have great phone plan deals available on Black Friday, so shop around and see if you can actually save some money this year, instead! 

Also, if you see people doing a lot of Black Friday shopping, and you’re wondering how they afford it?? Remember that maybe they actually can’t afford it! A lot of people buy things when they aren’t really in the position to do so. Focus on yourself, and your own money goals.

We Want Need Your Feedback 📢 

We want to hear from you! 🗣

We know that many of you have been using our Budget Template throughout 2024, and we hope that you found it helpful as you made, saved and spent money throughout this year. 

Now, we want your feedback! We plan on making a few tweaks to our template prior to the new year, so that it’s even better for you all when you start fresh in 2025. 

Please fill out the form linked below - we promise that it should only take you a few minutes to fill out! 

➡️ Click here to fill out the Budget Template Feedback Form  

We’ll share a link to the new budget template in the first newsletter of 2025 that’ll be sent out on January 1st.

Thank you in advance, and have a great month of budgeting ahead!