Money Management Newsletter: Savings
Setting up a regular savings/investment plan
One of the best way to buy mutual funds or any savings
program is by making automatic purchases every month. Regular investing
has three important advantages:
You pay yourself first. Despite your good intentions
to put money aside, other expenses always seem to get in the way. But
if you have the money automatically withdrawn from your financial institution
regularly, it will go to your investments before you have a chance to
spend it on anything else
It's painless. If you have a reasonable amount
of money withdrawn from your account regularly, you'll find you never
miss it because you never see it in the first place. And that's a lot
less painful than writing a big cheque for investments once or twice a
You get the advantage of dollar cost averaging.
By investing a fixed amount regularly, you end up buying more units when
the price is low and fewer units when the price is high. Over time, this
can reduce the aver age cost of your units
To help you get these advantages, Certain institutions
have created Regular Investment Plans. A typical plan lets you invest
through regular pre-authorized payments from your bank or trust company
account. You select the amount of the payments and you can split your
payments among two or more funds.
You can normally have the transaction processed on
any day(s) of the month and also choose the frequency of the payments.
They can be: Weekly, Every two weeks, Twice monthly,
Monthly, Every two months Quarterly, Semi-annually or Annually.
You can continue a Regular Investment Plan as long
as you wish, and you may change or cancel the plan at no charge.
Setting up a Regular Investment Plan one of the best
ways to start saving for that dream, buy mutual funds, retirement planning
or RESPs, It' all easy available by making automatic purchases every month.
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