If you’re looking for a New Year’s resolution that is simple to stick to but yields some pretty powerful results, consider contributing to investments monthly and/or increasing your monthly contributions by a few dollars.

Because of the power of dollar cost averaging, smaller contributions over a longer period of time accumulate more wealth than larger contributions over a shorter period of time. And because smaller contributions are easier for us to stick to than larger contributions, consistently contributing small amounts is the easiest, most accessible way for all Canadians to grow their wealth.

Suppose you’re 40 years old (but you look 28) you’re planning to retire at 65, and you have $250/month to contribute to your investments. If you contribute every month, and you never increase how much you contribute, you’ll have $237,756 at 65. Now let’s say you increase your contributions by 5% every year. At 65, you’ll have $373,909. And if you increase your contributions by 10% every year, you’ll have $645,769 at 65. (All examples assume an 8% rate of return).

When it comes to setting money aside every month, it doesn’t matter how many years you are away from retiring. Small, regular contributions WILL increase your financial security. And the earlier you start increasing your contributions, the more money you will have when you retire.

We usually define retirement as “not working anymore”. However, the Financial Advisors at Thierman Financial believe retirement means “having enough money working for money that you don’t have to work anymore”. Some people are born into it. For some people it happens at 30. We all hope it happens before 65, and for some people, it never happens. There are no guarantees in life, but you significantly increase your chances of achieving retirement by growing your wealth. Little by little. Bit by bit. Setting money aside monthly isn’t glamorous, but it works. (Think of the tortoise and the hare.)

Don’t know how much to set aside every month? If you’ve never increased your contribution before, consider a 10% increase. A year from now, if it’s not stressing your monthly cash flow needs, consider increasing it another 10%.

Don’t have an investment set up? No problem. Contact Shannen or Adriann today and we can show you how investing works and help you find an investment that’s right for you.

We look forward to speaking to you about how you can achieve financial security in your life.

Wishing you and your loved ones a Prosperous 2018!

Think Monthly, Retire Rich

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