By Allison McDonald-Sordo TD Waterhouse Private Investment Advice

The secrets of success in investing are many and varied. But one of the most important is to make regular contributions. Regular investing, especially if you decide to invest bi-weekly or monthly enables you to take advantage of two powerful tools: dollar-cost-averaging and compounding.

Dollar-cost-averaging is a regular investment strategy where you make investment purchases of a fixed amount on a bi-weekly or monthly basis. The strategy protects your portfolio by encouraging you to invest consistently, allowing you to buy more shares when the market is falling and fewer shares when the market is rising. In the end (assuming markets increase over time), your cost per share is lower than the average price per share.

Compounding is one of the most effective money making devices around. With compound interest, you earn interest on both the principal (the amount you save) and the interest that principal produces. In other words, this means that an investment of $300,000 earning simple interest at 6% annually would deliver $36,000 after two years. With compound interest that same 6% would deliver $37,080. Doesn’t sound like much? Wait. After three years at simple interest you get $54,000. With compound interest, you get $57,305. And, as the years progress, the compounding effect multiplies.

The next move is to get started. He or she who hesitates is lost. Talk with an investment advisor and establish a strategy that maximizes your regular monthly contributions. And that is where your investment advisor has an invaluable role to play. Keeping your investment strategy consistent with your personal needs is vital. And your investment advisor can help you do just that.

Disclaimer

This article was prepared by TD Waterhouse Private Investment Advice for Allison McDonald-Sordo who is an Investment Advisor with TD Waterhouse Private Investment Advice and is for informational purposes only. It is not an offer or solicitation with respect to the purchase and sale of any investment fund, security or other product and does not provide individual, financial, legal, investment or tax advice. Please consult your own legal and tax advisor. TD Waterhouse Canada Inc. is a subsidiary of The Toronto-Dominion Bank.

TD Waterhouse Canada Inc. – Member CIPF. TD Waterhouse is a trade-mark of The Toronto-Dominion Bank, used under license.

By Janice Carter

The other day I was going through my bills and bank statements. I felt stressed and panicked as the numbers revealed that I’m quite poor at present. I sat down and drafted a financial plan to get myself out of the red and into the black. The sense of panic subsided slightly. Then, as I stood back and looked at my life as a whole, I realized that I’m insanely rich! This is largely due to the fact that I have amazing friends. The panic vanished. My relationships with others are far more valuable than any soaring stocks or phenomenal bank balances.

Friendship is gold. My mother still teases me about my first day of high school. I had chosen a different high school than my elementary school friends, so I was friendless. After day one in a sea of strangers, my mom asked “how was your first day?” I replied “I’m looking people over carefully before I invest in friendship.” She got a big kick out of this.  Well, it took me a while before I chose friends, but many years later, the friends I made back then are still among my closest. They’ve supported me through the loss of my father, more break ups than I can count, career catastrophes and lots of other things. They’ve also shared in and been the source of much of the joy in my life. I really don’t know what I’d do without them. I’ve also been fortunate enough to collect many new friends.

Although I never would have believed it as a rebellious youngster, my mom is now a friend. When I told her she was my friend, she said “that’s the nicest thing you’ve ever said.” I’ve frequently told her I love her, but I believe that’s to be expected. To call her a friend means that I not only love her because she gave birth to me, but that I actually like her and choose to be friends with her.

Friendship has lingering effects of which you may not even be aware. My Dad maintained strong ties with his two high school buddies his entire life. Jim, Nick and my Dad were like the three musketeers in their teens as well as in their sixties. They were a rich part of my childhood allowing me to get to know my father better despite his absence. Friendship can leave a legacy.

Investing in friendship can yield returns that you never could dream of. As you strategically invest your money, do the same with people.

 Things to do to maintain existing friendships and build new ones:

Call just to say hello

Say I love you

Go to a social event and don’t leave until you’ve met 3 new people

Search for a lost friend on Facebook

Don’t keep score: if a friend doesn’t return a call, call them again and don’t take the lack of the returned call personally

Organize a special weekend with friends

How do you invest in your friends?