The new year is here! In fact, we’re more than a week into the first month. Is it just me or does it seem like time is already flying by? Because if it is, that leaves little time for us to get investing in the market for some major growth in 2024.
But to get there, you’ll need to have a strategy. And if you’re new to investing, now is the time to really focus on that strategy. So let’s get into how to get started in 2024, and make that money.
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Keep it consistent
First off, if you’re new to investing then you’ll want to come up with a strategy that you can replicate over and over again. That means looking at your budget and coming up with how much you can safely put aside each and every month, or even every paycheque.
Ideally, you can create automated contributions that will go straight into your investment account without even thinking about it. Then, when you have enough and investment opportunities look as if they might offer a deal, you’ll have enough cash on hand to invest.
But again, those investments should be consistently going into an investment account. And these days, beginners really don’t need much more than a Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP) if they’re getting started. So let’s get into why.
Save on taxes!
The best strategies you can employ are through investments that save on taxes. First off, you’ll certainly want to consider opening up a TFSA. The TFSA allows you to invest up to your contribution limit, which currently sits at $95,000 if you were at least 18 in 2009. Though check with the Canada Revenue Agency (CRA) so you don’t over-contribute and get dinged.
That being said, once you’re investing here, the bonus is you can take out this cash at any time, tax free. No taxes on dividends, returns, anything. Which is why it’s certainly great for new investors looking to meet goals beyond retirement.
But don’t forget about retirement! Hence the investment into your RRSP. Yet there’s another benefit to investing in the RRSP, and this is that every dollar you invest comes off your income for the year at tax time. Invest enough, and you can enter a whole new tax bracket!
Reinvest
So now you’re investing in your RRSP and TFSA on a consistent basis. You’ve decided to focus on a slew of investments, including on stocks providing dividends. And you think, “Great! Now I can take out those dividends to spend while I achieve my goals.”
Don’t do it. This is cash delivered straight into your account that can be used to reinvest right back into your portfolio. So instead of investing in, say, 100 shares and leaving it alone, you’re adding more and more shares each and every time you receive dividends. And there are some great options for both returns and dividends on the TSX today.
For instance, consider Pro Real REIT (TSX: PRV.UN), which currently has an outperform rating from some analysts. This stock remains a great deal, and is also cheap in terms of actual share price. Investors were off the stock after its chief executive officer left and there were vacancies in its Montréal industrial facilities. However, these are normalizing, and the stock is now looking like a solid buy.
The dividend stock currently offers a huge 9.07% dividend yield, trading at just 9.2 times earnings as of writing. Shares are down 19% in the last year, yet have been climbing up since November. So now could be a great time to jump in on this dividend stock.
