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Written by Singlife | 17 Dec 2020 |
Imagine person A going to the gym regularly, without fail, consistently.
While person B only heads to the gym when he feels like it, but when he does, he goes hard.
Person B can certainly experience major “gains” over a short amount of time. But he is also more at risk of injury and having his “gains” lost after being injured.
Person A may not be as intensive, but is less prone to drastic weight fluctuations, less prone to sudden injuries from a spike in intensity, and is likely to see consistent results in the long term.
Setting up an RSP is like person A’s strategy.
If, like person B, you go all in with your investing at certain periods of time, you might stand to gain alot, but might also end up getting “injured” and losing much- depending on your ability to gauge the “right time”.
Setting up regular payments, on the other hand, allows you to leverage the Dollar-cost Averaging (DCA) investment principle. DCA refers to investing a fixed amount on a regular schedule, regardless of the market condition. DCA replaces market speculation with a systematic investment approach and could smooth out the average unit cost over time.
Ultimately, the choice is yours!