Creating an investment portfolio today to help fulfill your dreams for tomorrow can seem difficult at times, especially when every day brings the reality of utility bills, mortgage payments, car loans or lease payments and other demands on your hard-earned money. Here are some methods on how to properly invest, on a consistent basis.
Saving enough money to support the lifestyle you dream about is important to you and can be achieved using a simple, straightforward and consistent approach. Consider the power of making an affordable monthly payment to your investment plan the same as you would any of your other monthly commitments. A consistent monthly investment plan, one whereby a specified amount is deducted either from your savings or chequing account, would in turn be contributed to your Registered Retirement Savings Plan (RRSP), Tax-Free Savings Account (TFSA) or non-registered investment portfolio.
You’ll benefit from dollar cost averaging – meaning that your dollars purchase fewer units when prices are high and more units when prices are low, resulting in a lower average cost to you over time for mutual fund invest-ments. When investments take place on a regular basis, this dollar cost averaging effect frees you from scrambling to invest lump sums at irregular intervals.
Choose the plan that fits you
Monthly investment plans can be customized to work best for you. We will work with you to determine the dollar amount and frequency of contributions that best fit your budget, and where to invest your money.
We recommend you begin by investing at least 10% of your earned income each month, however you could also decide to invest weekly, bi-weekly, or quarterly. Once your plan is in place, we will review your progress on a regular basis and recommend changes if required.
Investing at work
Another alternative is to join a group RRSP at work and have your contribution deducted directly from your paycheque. Once you’re contributing regularly to your RRSP, you can approach your employer to reduce the amount of income tax deducted each pay period. The money you would have paid for taxes in each pay period can help you top up your investment plan so you don’t have to wait for your tax return to reap the benefits of your contributions. We can show you how to approach your employer to have your deductions reduced.
Balance
A properly balanced portfolio will help you build your wealth while reducing your exposure to market variability. Investors Group offers a variety of investment options ranging from our conservative Investors Group Cornerstone PortfoliosTM to individual funds that cover a full range of risk tolerance profiles. Your plan will be as unique as you are.
Talk to your Consultant about a monthly investment plan that’s right for you. Invest regularly now to have the lifestyle you want when you retire.
Written by Mohamad M. Sawwaf,
Financial Consultant and Division Director
IGM Financial Inc.
You may reach out to him at Mohamad.Sawwaf@investorsgroup.com.
Please note: this article is not a substitute for legal advice. This article only provides general information which you may find helpful. You may wish to consult with a qualified professional financial or legal advisor, as appropriate.