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Anonymous
Say if i were to invest $500 per month, how can i know when can i gradually increase the monthly investment amount and when is a good time to cash out the dividends?
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Arman Mohamad
10 Jan 2022
Seedly Student Ambassador 2021/22 at Seedly
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Probably you should ask yourself how long is your investment horizon. Regular savings need a time frame, not like one year to start seeing the effect.
If it doesn't affect your basic needs and you have spare cash, you will know when and where to put.
The time to cash out money is when you need it. If not needed, just like what others mentioned, let the dividends DRIP
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I think as a beginner, there are many unknowns and you may not have found smth that suits u. Maybe y...
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Hi Anon, to your first question. I think RSPs are an alright investing strategy because it's automated for you where you don't have to worry whether the current time is a good time to invest, the RSP itself just DCAs for you.
To your second question on the gradual increase of monthly investment amount: It is dependent on your cashflow. For example, if you have a child but get a pay raise, you may find yourself having to decrease your $500/month to say $300/month.
On the flipside, you may have, God forbid, a pay cut but you've fully paid for your mortgage, in which case your cashflow may be higher and you can increase from $500/month to $800/month. It all depends on the cashflow. Don't over-invest because you may need the money for expenses and what-not.
For dividends, if you have no need for dividends or the dividends are minuscule, you can have them reinvested. If you are looking for a good time, again it depends on you, maybe you want to have a good meal, a staycay or a trip for a weekend you can withdraw the dividends. It depends.
One way people use dividends after accumulating a huge portfolio is to fund their retirement based on dividends!