The importance of discipline in saving for the long-term

Discipline is of primary importance to achieve your goal of long-term savings.  By long-term I mean 50, 60 or even 70 years.  I started investing for the long term 28 years ago at 26 years of age.  I will end my accumulation period in a couple of years and then move on to living off the income from the accumulated capital for the rest of my life.  In my case, while I plan to live off the income from the capital, I plan to leave the capital itself with charities and family after my expiration date.

To me, discipline in long-term savings means:

Regularly depositing a pre-established amount in a savings account, that is once a month or on each payday.  As a result, you adjust your way of life without thinking of the amount of spending you deprive yourselves.

Follow the rules of your savings plan.  If your plan includes buying units of a mutual fund every three months, make it so whether the stock market is up or down.  After all, over the next decades, you can reasonably expect recessions to happen about every 10 years.  So down markets… there will many during your long-term project.

Live below your means.  In our life and time, it’s not very appealing to live less of a life than you can afford.  So, although the amount of money you set aside may appear small as to ask yourself the question why bother?  In the long-term the results will likely me immense.  So it’s important to respect your plan and live below your means.

In May, the value of stocks in the consumer discretionary and REITs has exceeded my model target.  Therefore, I’m selling some shares of Magna International (MGA-T) and Northview Properties (NVU.UN-T).

With these funds I will purchase more shares of stocks in sectors that are below my stock allocation target, namely health and consumer base.  These will likely be Johnson  & Johnson (JNJ-N) and Pepsi (PEP-N).

Until next month,

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