Why you should stay the course with your investments, even if markets are moving.

Thanks to Jackie - investment specialist

If you're investing for your retirement, or saving for some other future goal, you're doing the right thing ... you're paying yourself first and setting this money aside to meet your long-term objectives.

But as time goes on... as your life changes and your priorities shift, you may be tempted to give up the good savings and investing habits you've developed.

My advice to you is to develop a plan and stick with it. By having a plan and continuing to invest regularly, you would be surprised at how you will meet your goals over time.

Are you concerned about the markets going up and down? That's fair - a lot of people have that concern. But my advice is the same - stick with it. Because a good way to handle the everyday ups and downs of the market is to stay the course and follow your plan.

It's never good to "chase" the market because you may find you are buying high and selling low instead of the other way around. Staying invested over time is one of the best ways to get a better overall return.

Imagine if you're on a road trip, and you hit a bit of traffic on the highway. You're not going to abandon the trip just because you've hit a tough spot - you'll never get to your destination! And if you try to test out which route may be faster and you go searching for side roads, chances are you'll end up falling further behind schedule.

It's the same with investing. Like traffic, it's difficult to predict what's going to happen next. Studies have shown that many investors lose money when they try to predict where the market will go.

Invest regularly, and stay focused on your investment objectives. If your objectives have changed, or if you're comfort with risk is different from when you started investing, it's easy to do a review of your investments and make sure you're still happy with where your money is being invested. It's good to review and rebalance every year - as your life changes.

Don't give up on saving and investing for the future - you'll be in a much better position down the road if you stay in the market.

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, The Royal Trust Company and Phillips, Hager & North Investment Management Ltd. are separate corporate entities which are affiliated. Royal Mutual Funds Inc. is licensed as a financial services firm in the province of Quebec.

Visit the RBC Advice Centre for more information.

Credit Rating Basics

Thanks to Gurnek - Credit Specialist

A credit bureau score is used by banks, or other companies - like cable providers, insurance companies or landlords - to determine how risky it is to do business with you. It gives them a picture of how well you manage your money because it's based on information pulled from all the lenders you do business with.

The better the credit score, the more attractive you are as a client. And this means you're more likely to qualify for that loan or mortgage you're applying for, or even to get a preferred rate or package from a cell phone company.

So how does it work exactly? Well the first time you borrow money, a credit rating report is created. They are maintained by credit reporting agencies and include whether you've paid your bills on time, whether you've missed payments, and what your outstanding debt is. Over time, this data will form a pattern of how well you pay - or don't pay - your debt. Information that appears on your credit rating is kept for 7 years.

This is why it is important that you pay all of your bills on time, even the ones that seem small and insignificant. And even if it is just the minimum payment. Regularly staying on top of your bills reflects a good pattern of behaviour.

If you often - or even sometimes - miss bill payments, this can negatively impact your credit score. And a lower score means you're less likely to qualify for financing down the road. If this is a concern, consider setting up automatic transfers on payday so you don't let a payment slip by.

Your credit score is your score. It is good to know what your current score is. You can request a copy of your credit report from either of the two agencies in Canada - Equifax or TransUnion. It's actually a good idea to review your credit report once in a while, in case of any errors or fraudulent activity.

If you keep on top of your credit information, and maintain good credit habits, you'll benefit in the long run.

For more information visit the RBC Advice Centre.

Buying a home - What can you afford?

It's a Personal Decision

While you may qualify for a certain mortgage amount, you should also consider how it will impact your lifestyle and other things that are important to you.

Will you be able to maintain your current lifestyle with the mortgage payments you're considering. Are there changes to your current spending that you can make to be able afford that new home?

Be Honest
Be honest in deciding what you can afford! Small minor changes to your lifestyle are likely doable - however major changes really need to be considered.

Look hard at your current lifestyle - how much do you spend on going out to dinner, movies, travel, etc. You may decide to eat at home more often, watch movies at home instead of going out; whatever your change, you need to assess how drastic is this change in your lifestyle. Will you be satisfied with the changes you've made? A dramatic change in your lifestyle would not be recommended or may not necessarily happen. You still need to lead your life!

Future Considerations Too!
It is also important to think ahead. Where will you be in a few years - kids, new job, etc. How this will affect your future cash flow? Future changes to consider:

The impact of family changes will affect cash flow and your ability to meet your monthly financial obligations. For example, the birth of a child can mean less income coming in due to maternity leave, increased expenses with new clothes, furniture for the baby's room, strollers, car seats, etc.

Look at your employment situation - will you be getting a salary increase soon? Is your spouse/partner going back to work? You may then want to look at stretching yourself now, for the added flexibility later - getting into that home you really want now.

Some additional thoughts - if you have never owned a home before think about the additional costs associated with owning a home that will impact your cash flow:

Utilities - heat, hydro, internet, etc.
New fencing, deck
New furniture, window coverings
Shovels, rakes, etc.

Think About Balance
So you will need to decide. Is the starter home right for you? Something that will allow you to be a home owner now, understanding that in a few years as your family grows and changes, you may need a larger home. Or do you want to stretch and get that dream home now - and potentially never have to move again.

You'll be living with this decision beyond today so you need to think about balance. Remember you want to be able to sleep at night knowing you can make your payments!

Visit the RBC Advice Centre for more information.

How can you pay off your mortgage faster?

Thanks to Leanne, Branch Manager for this article.

Being mortgage free is a dream of many Canadians. Here at RBC we have many flexible payment options to help make that dream a reality.

For instance, if you come into a lump sum amount of money or you get a raise, or your finances change at all, we could help you change your mortgage payments in order to pay that mortgage off even faster.

One of the simplest options is to actually do a double up payment. One double up payment can actually save you tens of thousands of dollars of interest over the course of your mortgage. So that's one payment out of your entire year.

The double up option allows you to increase your monthly or bi-weekly payments. From your original amount you can add on $100 up to the exact amount of your bi-weekly or monthly payment. For example, if your bi-weekly payment is $1,000 you can increase that payment by an additional $100 to $1,000. Those additional funds going right to your principal reducing your overall amortization period.

Another option available is to put 10% down yearly as a lump sum payment directly to your principal. This lump sum is 10% of your initial value of your mortgage.

So for example, if you had a $200,000 mortgage, you have the ability to put a $20,000 lump sum directly to your principal every single year. Therefore you're putting that 10% right to your principal payment and reducing those overall mortgage costs.

Visit the RBC Advice Centre for more information.