Investing $50/month beats waiting to invest $500/month

We're all guilty of it. There's always something more urgent - a bill, a want, or the quiet rationalization that small amounts aren't worth the bother. I fell into that trap myself, which is embarrassing in hindsight because I started investing with just $25 bi-weekly as a broke co-op student over 20 years ago. Then I drifted away from it. Here's what that drift actually cost me.

Small and steady beats large and infrequent

When I was 19, $25 bi-weekly was the minimum transaction my bank allowed, and conveniently, it was also everything I could spare. To put it in perspective - $25 was a week of groceries, 2.5 hours of co-op pay, a full tank of gas, two six-packs, or a date night out with tip. It wasn't nothing. But I budgeted around it and barely noticed it was gone.

I only invested during co-op terms between ages 19 and 24, which meant somewhere between $200 and $400 per year. Total invested over five years - $1,800. By the time I graduated and opened my Questrade account, that $1,800 had grown to $3,000. This was a real starting point for the serious part of my financial journey.

The comparison that changed my thinking

Let's run two scenarios, both starting from that same $25 bi-weekly habit, and both continuing to age 65. I'll use the ~8.9% annualized return I actually achieved from ages 19 to 24.

• Scenario 1: $25 bi-weekly, consistently, from age 19 to 65 → ~$312,000
• Scenario 2: Save up and invest $500 every 10 months (same total dollars) → ~$289,000

Same money in but a $23,000 difference. That gap is time-in-market doing its job. The moment you have $25 invested, it starts compounding. By the time you've saved up $500, those earlier dollars have already been working for months. The gains are small at first, but money doesn't wait for you to feel ready. Now imagine you scaled up the amounts.

The psychological case for small amounts

There's a behavioral angle here too. A $500 withdrawal hits different than a $50 monthly contribution. Fifty dollars a month is roughly $2.50 per weekday, which for me is mentally easy to separate from your daily spending. You're not going to rearrange your weekend over it. A $500 lump sum, even when it makes logical sense, creates friction. And friction is where good intentions die.

You're not going to transfer $2.50 per day to your brokerage. The fees alone would be absurd. But the principle holds - the smaller and more automatic the contribution, the less likely you are to talk yourself out of it.

What I should have kept doing

When I graduated and started earning real money, I kept up with the habit and scaled it up to as much as I could. As I entered my 30’s, got married, bought a place, had kids, I should have continued keeping up with the habit and scaled it accordingly, not abandoned the frequency. Instead, I chased the idea that I'd invest "when I had more." That's a trap. The market doesn't care about your savings milestone. It just keeps running without you. Now as I am wrapping up my 30’s, I am going back to what worked for me in my 20’s.

Whether you're working with a TFSA, an RRSP, a Roth IRA, or a taxable account - set a number you can live with every month and automate it. $50. $100. Whatever. The amount matters less than the consistency. Time-in-market is the only edge most of us actually have access to.