Should I change my habit of investing in
February for the previous year? Is it really pays to invest
earlier during the year?
The answer is yes if ...
You have already contributed the maximum
allowed and that you have exhausted your unused balance. In
other words, if you have no choice but to contribute to the
current year and you still have money available to invest in an
RRSP.
It is obvious that you contribute now will
earn profits in tax-free now and that these benefits will
contribute to the growth of your assets for the remainder of the
life of your RRSP even if you can't claim a tax refund in the
short term.
The answer is no if ...
If you contribute each year and less than the
maximum allowed, the answer is no.
If you can't afford to invest the maximum
then you can't afford to contribute more. Accordingly, the
reasoning to contribute earlier is nonsense.
Models which propose that after 30 years
you've accumulated over are usually accurate. If you contribute
earlier in the year, you will have more benefits earlier working
for you to earn more profits.
It is always true, and it is not connected to
the notion of beginning of the year or year-end in particular.
It's related to the fact that the earlier you start, the more
you accumulate compounding.
Do I have to pay my mortgage or invest in
RRSP?
In general on purely financial, both
solutions are comparable. A small change in return on your
investment returns can tip the balance toward one or the other
solution. Thus the recommendations are not easy.
Therefore, use other criteria to decide.
- You're young. You plan to stay very long in the same
residence. Your mortgage rate is very low. The values of
homes in your area do not increase or decrease.
Invest in your RRSP.
Your performance in your RRSP should be much better even with
conservative financial products.