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There’s an old Greek legend about a wrestler named Milo who trained for the Olympics by running around while carrying a newborn calf on his shoulder. As the calf grew bigger and heavier, Milo became stronger. By the time of the Games, Milo was carrying a full-grown ox, and he became the Olympic champion.

Milo’s story demonstrates the power of compounding and consistency (he trained every day) and progression (as the calf grew heavier, Milo’s muscles worked harder). Even though the deadline for 2023 RRSP contribution is almost a year away, it’s never too early for investors to apply these two principles to their portfolio and realize great results.

Many people think that investing is only for those who have lots of money, time and skill, but this is not the case. For beginner investors, putting whatever amount you are comfortable with into an exchange-traded fund (ETF) can grow dividends.

For example, let’s consider an investment in XIU, an ETF with exposure to the 60 largest Canadian companies, which has a long track record and low fees. If you had invested $50 every month in XIU, for the 10 years from January, 2012, to December, 2021, your $6,000 in total contributions would be worth $10,403. Not bad, right?

Now, if you had waited until the end of the year to make the same $600 contribution in one lump-sum payment (as many do with their RRSP contributions), at the end of the 10-year period your same $6,000 total investment would be worth $10,029. In this case, waiting until the end of the year to make your contribution cost you almost $400.

This is the concept of compounding and consistency applied to investing. It gets better.

What if you applied the concept of progression to your investments? Just like how the calf grew bigger as Milo continued his training, instead of putting away $50 monthly in XIU, you increased by $10 increments each year? In 2012, you invest $50 a month; in 2013, you move up to $60 a month; and by 2021, you invest $140 a month. Your annual investment increases and so do your returns. By applying progression, your investment of $11,400 over 10 years would be worth over $18,000.

Of course, we can’t predict what the next 10 years look like, but this dollar-cost averaging approach sets you up for success in all market conditions. If the market corrects, your monthly investment buys more units of XIU; if the market is surging ahead, all the units you already own are worth that much more.

Today, many institutions offer commission-free trading of ETFs such as XIU. Those looking to save for retirement can apply Milo’s concepts to their RRSP and TFSA, keeping in mind their annual contribution limits, or apply them to your children’s RESP savings and non-registered investments too. Just like how Milo got stronger every day by doing something simple consistently and with progression, setting up an automatic investment plan with built-in monthly contributions is easy to do and can help build your wealth steadily.

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