Retirement Resource Centre - Pay yourself first - RBC Global Asset Management

Pay yourself first

The benefits of investing regularly


Pay yourself first. You may have heard this widely used personal finance mantra before, and for good reason.

This strategy involves saving a portion of your income on a regular, automatic basis. Integrating a “self-payment routine” into your budget, alongside your other necessary expenses – like your phone bill or buying groceries – can set you ​​​​​​​up for success.

Key advantages


Investing regularly allows you to invest smaller amounts on an ongoing basis, which is easier on the wallet compared to the alternative of coming up with a large lump-sum investment at some later date.


By making the contributions automatic, you’ll soon find you don’t miss those few dollars a month but you’ll really start to see the savings add up over time.

Your monthly savings can really add up

  Monthly contribution amount
Number of years invested $50 $100 $250 $500
5 $3,489 $6,977 $17,443 $34,885
10 $8,194 $16,388 $40,967 $81,940
15 $14,541 $29,082 $72,705 $145,409
20 $23,102 $46,204 $115,510 $231,020
25 $34,650 $69,299 $173,249 $346,497

Assumes a 6% annualized rate of return.
Source: RBC Global Asset Management Inc.
The rate of return is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund.
Actual results may vary.

What is dollar cost averaging and how can it help?

The term “dollar cost averaging” refers to what happens when you invest a fixed amount at regular intervals regardless of market performance. When markets are down, you automatically take advantage of the opportunity to buy more units of your investment at a lower price. When markets are doing well, the money you’ve already invested is benefitting from that performance. The discipline of paying yourself first puts the power of dollar cost averaging to work for you and can limit the impact of emotional investing during periods of market volatility. ​​​​​​​

The easiest way to get started is to establish regular, automatic contributions. Work with an advisor to determine how much you need to pay yourself each month to achieve ​​​​​​​your long-term goals.

This information has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. The information contained herein is from sources believed to be reliable, but accuracy cannot be guaranteed. Please consult your advisor and read the prospectus or Fund Facts document before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. RBC Funds, BlueBay Funds and PH&N Funds are offered by RBC Global Asset Management Inc. and distributed through authorized dealers.

® / ™ Trademark(s) of Royal Bank of Canada. Used under licence. © RBC Global Asset Management Inc. 2017

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