The Vault
Contribute regularly to your RSP and make it automatic
by Graham Barber

If you’re still not making regular automatic contributions to your RSP, you may not be maximizing the benefits of registered savings. You get three amazing benefits when you make regular contributions to a mutual fund in your RSP.

1.Smaller regular contributions are actually easier to make than large lump sum investments at year end.

Similar contributions made automatically every month reduce the year end, after holiday season stress of coming up with a lump sum contribution.

2. Regular contributions start earning returns immediately.

3. Automatic regular contributions into a mutual fund take advantage of dollar cost averaging.

If you invest a sum of money in a mutual fund on a regular basis, say $150 a month for a year, you have four important features working for you;

- When the mutual fund unit price goes up, you may purchase fewer units, but you continue to invest in a successful fund. Advantage: you continue to invest into a successful fund. - When the mutual fund unit

price goes down, you are automatically buying more units for your $150. Advantage: you’re “buying low”.

- You stay invested. Advantage: you leave your investments alone and let them benefit from the long term growth potential of equity markets.

- Because the stock market goes up and down, your average unit price may be lower than it would be if you invested an equivalent lump sum amount. Advantage: more value for your money. Talk to your Scotiabank

representative about arranging preauthorized contributions to your RSP.

The proceeding information was provided by Graham Barber, Branch Manager of Scotiabank, Alcona Branch. The Scotiabank, Alcona Branch, is located at 1161 Innisfil Beach Road, (705) 431- 6116.

The Vault is a weekly series of articles provided by Graham Barber with financial advice and suggestions.