Friday, May 11, 2007

Procrastination Pays?

Most of the time in personal finance issues it doesn't pay to procrastinate on anything. If you want to pay down your debt, save for your child's future or even save for a vacation it is almost always better to start right now rather than waiting.

I recently had an experience where it paid to procrastinate. Literally. I mentioned earlier this week that I had started transferring my old pension over to a locked in RRSP. What I didn't touch on was the fact that my estimated worth of the transfer amount was dead wrong. The original amount of the pension transfer was around $10,000, so I had estimated about a 5% rate of return for the last 3/4 of a year (so hence the $10,500 estimate in my net worth). When I called to get the new amount I almost dropped the phone. My rate of return for the last 3/4 of a year was 17% (or 25.5% in an annualized rate).

So the point of all this is for every 'rule' in personal finance, there is always going to be exceptions where it either doesn't apply to your specific circumstances or you just get lucky. The trick of coarse is to being able to recognize dumb luck over a shrewd decision. In my case, it was merely dumb luck.

Have a good weekend,

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