An ETF (Exchange-Traded Fund) is a basket of investments that trades on a stock exchange like a single stock. When you buy one share of an ETF, you're buying a small piece of every investment inside that basket.

Think of it like buying a pre-made fruit salad instead of buying each fruit separately. You get variety and convenience in one purchase.

• Low costs — Most ETFs charge less than 0.25% annually
• Instant diversification — Own hundreds of stocks with one purchase
• Transparency — You can see exactly what's inside
• Easy to buy and sell — Trade anytime during market hours
• Tax efficiency — Generally more tax-efficient than mutual funds

The main differences:

• ETFs usually have lower fees (0.05-0.25% vs 1-2% for mutual funds)
• ETFs trade like stocks; mutual funds price once daily
• ETFs require a brokerage account; mutual funds available at banks
• Most ETFs track an index; many mutual funds are actively managed

• VBAL/XBAL — All-in-one balanced portfolios
• VCN/XIC — Canadian stock market
• VUN/XUU — US stock market
• VAB/XBB — Canadian bonds

To buy ETFs, open an account with a discount brokerage like Questrade or Wealthsimple Trade. Both offer commission-free ETF purchases. Start with a broadly diversified ETF, contribute regularly, and let compounding do its work.