I Can Finally Say It...My Parents Were Right!

It can be hard to admit when your parents are right. Decades ago — when I thought my university degree made me smarter than my high-school educated mom and dad — they recommended I start saving early. Setting aside small sums of money every month, they said, would turn into a larger nest egg over time thanks to the power of compound interest and returns.

I scoffed. Surely the best move was to pay off my school and other debt first, and then wait until I had a high-paying job to start seriously saving. After a few years, including getting laid off at one job and replacing it with a lower-paying one, I realized my strategy might not be working. Sure I was paying down debt, but I didn't have a meaningful rainy-day fund or an investment account to set me up for the future.

So, I started paying off my debt and investing at the same time. I was fortunate to be in a position to do both. My investment funds didn't grow like proverbial magic beans. In fact, they barely budged. Then the 2008 recession hit. The headlines all said people were panicked and selling "everything," vowing never to return to the market.

My parents recommended staying put. You can't time the market, they said, borrowing advice from their investment advisor. Besides, if you sell now, the money is gone forever, they told me. At least if you stay put you might make it back, they said.

I was skeptical, but my debt was nearly paid off by that time and I couldn't think of where else to put my savings — or any other way to make back the money I lost in the market during the recession.

I decided the best choice for me was to hang on. Eventually, the market started to recover. I saw my investment account balance start to creep higher, then lower, then higher again. At least I didn't need the money immediately. I was lucky that way. I'm fully aware that isn't always the case for everyone. I kept working, and kept saving. I also largely left the accounts alone.

Last year I did something I only dreamed of a few years earlier: I bought a condo...without a mortgage! I paid for the property with money built up in my non-registered investment account and using a low-interest line of credit that I plan to pay off in a few years. Some might say getting a mortgage might have been a better strategy, given the rising markets and record-low interest rates, but I love the idea of being middle aged and "mortgage-free."

Meantime, I continue to invest. The headlines seem to say something different all the time. Regardless, the money I need in the next year or two is in a high-interest savings account and the rest, including my Registered Retirement Savings Plan and Tax-Free Savings Account, are fully invested. The market will go down, eventually. Then it will likely recover, eventually. Hopefully.

Of course there's risk, but I now believe that by staying invested over the long term, and continuing to put away small sums every month, I've come out ahead.

So...my parents were right. Luckily I've matured enough that I can admit it to them whenever the subject of investing comes up.