Tag Archives: money

How much should you contribute to an RRSP?

The day you receive your first pay cheque is always a momentous one. There’s so much you want to do with that money. If you’re like most people, you likely spent your first pay cheque on food, clothes or entertainment. Not many people put aside cash from their first cheque towards a retirement fund. However, when you get your last pay cheque, you’ll likely wish you saved more. It is never too early to start saving money in an RRSP (registered retirement savings plan).

There is no firm rule on how much you should contribute towards your RRSP. However, since RRSP’s were designed so that the contributed amounts would be tax-deductible, there is a maximum contribution limit. The main objective of setting up this account is to save enough money to have a comfortable retired life without having to compromise on your lifestyle.

The amount you need to contribute depends largely on how luxurious you would like your retired life to be. To calculate a rough idea of how much you need, check out an RRSP contribution calculator. This tool uses many factors such as your current age, RRSP contributions to date and assumed rate of interest to calculate the sum you will receive at your desired retirement age. The amount you contribute each year will vary based on your income and lifestyle. For example, if you have young children, taking care of them will be your top financial priority. However, in your fifties, when your children are more independent, you will likely have more money available to contribute a higher amount to your RRSP. If all goes well, your income will also increase substantially over the years. That means when you have more money you can also take advantage of unused contributions that carry over from year to year. Unused contributions refers to the difference between the maximum contribution amount and the amount you have contributed towards your RRSP. At the end of each financial year, the government calculates this amount and allows you to carry it over to the next year. Thus, even though your income may not have increased drastically, you can put aside more money. You can also over contribute up to $2000 towards your RRSP. If you cross this limit, you will be charged a 1% penalty fee each month on any excess contributions.

So, plan your finances wisely. If you do this today, your future self will be eternally grateful.

This post contains sponsored links from Sun Life Financial.

Mistakes to Avoid When Investing

Mistakes to Avoid When Investing

Along the way, you may make a few investing mistakes, however there are big mistakes that you absolutely must avoid if you are to be a successful investor.
For instance, the biggest investing mistake that you could ever make is to not invest at all, or to put off investing until later.
Make your money work for you – even if all you can spare is $20 a week to invest!

While not investing at all or putting off investing until later are big mistakes, investing before you are in the financial position to do so is another big mistake.
Get your current financial situation in order first, and then start stock market investing. For instance, get your credit cleaned up. Pay off high interest loans and credit cards. Put at least three months of living expenses in savings.
Once this is done, you are ready to start letting your money work for you.

Don’t invest to get rich quick. That is the riskiest type of investing that there is, and you will more than likely lose. If it was easy, everyone would be doing it!
Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know
you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.

Don’t put all of your eggs into one basket. Scatter it around various types of investments for the best returns. Also, don’t move your money around too much.
Let it ride. Pick your investments carefully, invest your money, and allow it to grow. Don’t panic if the stock drops a few dollars. If the stock is stable, it will go back up.

A common mistake that a lot of people make is thinking that their investments in collectibles will really pay off. Again, if this were true, everyone would do it.
Don’t count on your Coke collection or your book collection to pay for your retirement years! Count on investments made with cold hard cash instead.

Money Management in Trading

Money Management in Trading

Money management is one of the most important part of building a successful investment in trading.

Money management combined with a successful trading strategy, it will enable the forex trader to eliminate the emotional and psychological aspects and to make money over the long term. A successful trader is actually a risk manager, and although we all think it is about entering a trade, managing it is far more important.

The most important reason you should have a proper money management strategy is to ensure that you can remain in the business long enough to become profitable, because when the money is gone the game is over. A good money management system can be applied to any trading method or strategy.

Most traders invest their energy and money focusing on the trading strategy and overlook the psychology of trading itself. This can be the hardest part to control, not just for new traders. But with the wright money management rules in place we can distance human emotion and will still have cash available for future trading opportunities. With that in mind, do not rush into trades, soon a new trading opportunity will come up.

The measure of your overall risk will be an important factor determining the limit of your trading position size. Never risk no more than 2% of your overall cash in any one trade.

Trading aggressively is the biggest mistake new forex traders make. If a small sequence of losses would be enough to eradicate most of your capital, it suggests each trade has too much risk. An approach to aim for the correct level of risk is to alter your position size to reflect the volatility of the currency you are trading. A more volatile currency demands a smaller portion of your portfolio than a less volatile pair.

The best traders make steady returns in the long run. These profits can become very large over the years, through the power of compounding. But you cannot get compounded returns if you quickly get out of the game. Realistic objectives and a moderate approach is the right way to start investing in foreign exchange.

One of the advantages of Forex trading, is powerful leverage ratios up to 1:1000 depending on your forex broker.  Leverage allows you to command an FX position that is much larger than the capital you deposit. This offers the chance to amplify profits made from the capital you have available. But it also increases your risk exposure. In other words – it allows you to ramp up the risk to get greater profits. This is a useful tool, but it is critical to understand the size of your overall risk exposure.

Your trading strategy will be determined by its performance in the long term. Do not worry too much for the success or failure of your current trade. Trading is not just about a successful trading strategy. It’s also about staying in the business long enough to allow your strategy to succeed.



Like all aspects of trading, what works best will vary according to the preference of the individual investor. Some traders are willing to tolerate more risk than others.

Find here more interesting forex articles

Forex Bonuses Glossary

Forex Trend Trading

Short-Term Forex Trading Strategies

Forex trading tips from the pros

Forex Trading Tips

Kamikaze Defense