I want to secure my future retirement. What is the best way to go about this that will provide me a good life?

Question

and how do I go about it?

Answer 1

1. Live below your means. There are people who make less than you and do ok. You really don't need designer clothes, a fancy car, your nails be a work of art or a $ 4 latte.

2. Allocate at least 10% of income to retirement. You probably can't do 10% at first. Start with 3% and each raise add a percent.

3. Automate your savings. Have money deducted from each paycheck and allocated to your investments. If your employer offers an investment plan great if not allocate it to a mutual fund company.

4. Diversify your investments. Some large, small, and foreign stocks and some bonds. Don't buy individual stocks or bonds go for mutual funds.

5. Set a target for equities (stocks) and bonds i.e. 60% stocks and 40% bonds. Every year or so check the percentages and bring them into balance either by selling some of what has done well or putting new savings into ones that have not done well. That will make you take some profits and buy some stock or bond funds that have gone down. You want to buy "low" and sell high.

6. Keep your investment costs low. Avoid brokers and funds with front end sales charges - best are index funds offered by Vanguard, Fidelity Investments.

7. Keep it simple - Fancy or complicated products are designed to make companies and the agents money not you.

8. Make sure you have insurance to cover unexpected losses and an emergency fund of a few month's expenses.

9. Educate yourself about investments. It is something you will use your whole life. I recommend the Boglehead's guide to investments.

10. Avoid debt except for housing, health or education.

As a start I would consider the Vanguard Star Fund. $1,000 minimum investment. It invests in large, small and foreign stocks (foreign from a US standpoint) and bonds. It has about 60% in stocks and 40% in bonds. Once you set it up you can have money taken from your bank account and automatically invested. When you get more investment  knowledge and more assets you can pick your own individual funds.

I got this type of advice early and it has worked very well for me - i am now happily retired and never felt deprived.

Good luck

Answer 2

Put as much as possible in your RRSP account even if it means borrowing from bank for short-term. Invest the funds in top quality dividend paying stocks or distribute the funds in a few mutual funds.

Checkout my friend' site www.getmoneyenergy.com for dividend reinvesting option with stocks. It is a Canadian site.