Young Men: STOP Gambling in Your TFSA

Way too many young men are throwing away their hard-earned savings and costing themselves thousands—if not hundreds of thousands—of dollars in tax-free compound growth. 

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You know, when people ask me for help, send me their questions, their portfolios, et cetera, I’ve never judged. Honestly. Well, okay, that’s not quite true. I do judge on occasion around what some people are spending on their cars. But I certainly haven’t gotten mad. I haven’t ranted. I haven’t lectured those losing their way.

I try to educate, motivate. Stay positive. Be empathetic, honestly. Until recently. Lately, I have to admit, I have become pretty agitated in a few cases. But, geez, it’s been hard not to. I can’t believe how many young men, say under 35, are investing their long-term growth money–usually inside a TFSA or RRSP–horribly. And I mean ridiculously horribly.

Meme stocks, crypto, option trading, oh boy. I’m not talking here about young guys saying no to index funds and instead trying to build their own portfolio and then underperforming by a few percent. I’m talking about young guys losing 75, 85, 95 percent of their portfolio. Guys turning a $50,000 TFSA into a $6,000 TFSA. Come on!

The opportunity cost is crazy here. All those years the money could have been compounding. Compounding tax free. Nope. Poof. Am I being sexist picking on men? No, I’m being factual. 95% of these crazy portfolios I see are being managed, mismanaged, by a male. It’s actually 100. Experts say that because young men have more testosterone, they take on more risk, including more imprudent risk.

“But Dave, hasn’t this always been a problem? Didn’t your generation do this with penny stocks on the old Vancouver Stock Exchange?” Yes and yes. But in the vast majority of cases, with quite a small percentage of our portfolios, not with all of it. Now, are all young men doing this? No, of course not. Not even close, but way too many are.

Way too many. It’s so hard to save right now. The cost of living is up big time, as all of you know. These young men are somehow overcoming that great challenge, but then throwing away their hard-earned, hard-to-save dollars on gambling. And make no mistake, this is gambling, not investing. Poor-odds gambling. Low-expected-value gambling. Almost-sure-to-end-in-disaster gambling.

You know, recently I was listening to a US podcast with three guests I really respect–one I actually know well personally. And they’re essentially saying this: “Young people, especially men, they don’t want boring investments like index funds. They want to feel like they’re in control. They want excitement. They want the potential for outsized returns.” Hey, they’re getting two out of the three. Stop it!