At this early stage of your medical career, your primary focus is likely to be reducing your debt. While this is certainly an important objective, now is also the best time in your life to start building wealth. By focusing on three simple strategies, you’ll find yourself well on your way to a secure financial future:
Commit to a Regular Savings Schedule.You can make saving easy by “paying yourself first” — with an automatic savings plan. Paying yourself first means having part of your paycheque deposited directly into a savings or investment account. You’ll be amazed at how quickly even small deposits can grow over time.
Contribute to an RRSP. An RRSP is one of the best tax breaks available to Canadian wage-earners, and it can be your most powerful saving tool. An RRSP provides two main advantages: you can deduct the amount of your RRSP contribution from your income in the current year, and the investment income you earn inside your RRSP isn’t taxed until it’s withdrawn.
Make Your Money Work for You. Saving money is just the beginning. If you want your money to work harder, you need to invest it. Investing means setting up a diversified portfolio of equity, fixed-income, and cash assets. Learn more about investing and diversification.
The Canadian Medical Residency Guide will provide you with more information on how each of these strategies can enhance your long-term financial security. Contact your RBC Student Champion for a free copy.
Modest Amounts can Grow Quickly
If you set aside just $50 each month for your RRSP, earning 6% annually, you’ll have more than $3,500 in your account after five years — and that doesn’t include any tax refunds you may receive as a result of your contributions.
Advantages of Mutual Funds
Unless you have experience buying and selling individual equities and bonds, you may be more comfortable investing through mutual funds. Mutual funds pool the individual investments from many investors into a single portfolio, which is then managed by a professional portfolio manager.
We offer a wide variety of mutual funds and your RBC Student Champion can help you choose the right funds to meet your investment goals.
Investment Advice is provided by Royal Mutual Funds Inc. Royal Mutual Funds Inc., RBC Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. Royal Mutual Funds Inc. is licensed as a financial services firm in the province of Quebec.
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