Saving for Child's Future | GTAMotorcycle.com

Saving for Child's Future

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mimico_polak

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Hey guys, was looking for an old thread that I remember a while back on here but can't find.

It was a question by a user regarding what options are available for best savings plan for a kid in Ontario once they're born. I know there are some plans which the government tops up / matches to a certain limit but looking at what would be some good savings options looking forward so we can help our (soon to be here) son with education, and get a step up in life.

Tried searching the forum but can't seem to find that specific thread, maybe I'm just using the wrong keywords. Not sure. Thanks for the help!
 
#1 RESP , for every dollar you put in the gov't gives you a percentage up to X dollars a years. I cant remember the totals. Its for post secondary education and if not used convert to an RRSP and you keep it. Only get it through a chartered bank (TD , RBC, Bank of Commerce ect) , there are companies that set up in malls to sell these things and are beyond sketchy, go to a bank.

#2 TFSA, compound interest is an amazing thing. Put some birthday money, christmas money away, its gets bigger the longer it sits.


Along with a regular Christmas gift , buy them a blue chip stock, dividend yielding. Talk about mortgages , credit cards, savings openly with the kid at the dinner table and equip them with a basic knowledge of how the world works. I was with 2 third year uni business students for lunch the other day, the both had charge cards, neither knew what the interest rate was.

There are two kinds of people, those that understand compound interest earn it, those that don't understand it , pay it.
 
Listen to crankcall.

RESPs set up for neice/nephews. Their parent have agreed to put everything else we decide to contribute into a TSFA.

Everything I've ever earned has had a percentage going to saving. The Wealthy Barber book was given to me at 14, I remember minimum wage at $3.65, and getting a $87 paycheck. Laugh at the bank books (remember them???) of me depositing $20 of that.

Best thing that was ever done for me was someone explaining finances.
 


crankcall said:
#1 RESP , for every dollar youput in the gov't gives you a percentage up to X dollars a years. I cantremember the totals. Its for post secondary education and if not used convertto an RRSP and you keep it. Only get it through a chartered bank (TD , RBC,Bank of Commerce ect) , there are companies that set up in malls to sell thesethings and are beyond sketchy, go to a bank.
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Is that the same scenario where Banks plays scenes in monitors, how you invest $25/week to make the savings tree grow? Does that take inflation in account?


crankcall said:
There are two kinds of people, those that understand compound interest earn it, those that don't understand it , pay it.
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I understand it. Now how do I earn it? All I have is RRSP and TFSA. Stocks?


Sorry OP for thread derailment.
 
I understand it. Now how do I earn it? All I have is RRSP and TFSA. Stocks?
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It's how you allocate the $$ within your RRSP and TFSA.
Talk to a FA where you have those accounts.
 
crankcall said:
I was with 2 third year uni business students for lunch the other day, the both had charge cards, neither knew what the interest rate was.
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I fall into that category; but only because I've never actually payed them any... 20%+ I'm sure
 
Keep in mind your TFSA is YOUR TFSA and not your kid's. They can't have one until they're 18 years old. My TFSA is MY RETIREMENT money...or at minimum a 2017 Aprilia Tuono 1100 Factory. :D
 
Gary said:
3
Talk to a FA where you have those accounts.
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and also talk to a Financial Advisor outside of the banks. Not being mean, however a bank teller gets a better job at the bank by taking some internal and external courses. And they become branch level Advisors, and I've dealt with them. There are guys posting in the stock thread and the last financial advise thread that know a fair bit more. Banks have senior level advisors , when you get a bigger pot, they will want to talk to you.

I'm a fan of Edward Jones, as an investment group. I'm sure all branch offices are not created equal but I really like my guy.
 
+1 RESP from birth to 18 and the TFSA after.

I don't know my CC interest rates....but I never pay them. Always pay it off in full every month. If I can't afford it I don't use the credit card.
 
Gary said:
It's how you allocate the $$ within your RRSP and TFSA.
Talk to a FA where you have those accounts.
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Financial Advisors get commissions by moving your money into specific accounts which in most cases make money to everyone but you.
 
ZX600 said:
Financial Advisors get commissions by moving your money into specific accounts which in most cases make money to everyone but you.
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OK. Sorry. Forget my suggestion. The BEST advise for those new to investing is definitely on gtam.
 
Gary said:
OK. Sorry. Forget my suggestion. The BEST advise for those new to investing is definitely on gtam.
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Just something to keep in mind when selecting whomever it is that it's going to give them advice.

You are getting old and more cranky
 
Gary said:
OK. Sorry. Forget my suggestion. The BEST advise for those new to investing is definitely on gtam.
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That's gold. That should be your signature.

I had lunch with a couple of lawyers a few weeks ago and one of them asked them asked about the best place for tires for his bike. I told him to call his dentist.
 
ZX600 said:
Just something to keep in mind when selecting whomever it is that it's going to give them advice.

You are getting old and more cranky
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There is a distinct difference between a financial advisor and a bank teller. Telling people that a licensed advisor is putting money in everyone's pockets but theirs makes it tough for them to evaluate that advice.
 
crankcall said:
and also talk to a Financial Advisor outside of the banks. Not being mean, however a bank teller gets a better job at the bank by taking some internal and external courses. And they become branch level Advisors, and I've dealt with them. There are guys posting in the stock thread and the last financial advise thread that know a fair bit more. Banks have senior level advisors , when you get a bigger pot, they will want to talk to you.

I'm a fan of Edward Jones, as an investment group. I'm sure all branch offices are not created equal but I really like my guy.
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The common complaint with the in-branch advisors is that most of what they do will be related to their own products. That's also a reflection of the typical Canadian investor, though. Our experience with a solid and robust banking system has led us to put a tremendous amount of faith in the banks. Since the de-regulation in the 80's that allowed banks to buy/own/be brokers, the banks have completely taken over the investment industry, and even the stock exchanges. It's only natural for us to at least consider getting all of our products from the institutions we're confident in (even if we love to hate them.) We're tending more and more to invest in packaged products and funds, and since the banks offer them as well, that's what they're going to offer as first. You may not always get the absolute best performing product, but they'll have something suitable for you so the advisor isn't wrong in recommending it.
The key thing, with whatever advisor you pick, is to understand what they're recommending with your money. Have them explain it. If they can't explain it in a way you understand it, then the product or the advisor may not be the right one for you.
There are resources everywhere to help. Whether you trust the provincial or federal government or not, there is plenty of information about how advisors are licensed and regulated on the IIROC & MFDA websites and the OSC website. That's not an endorsement, but you're far more likely to be protected if something goes wrong - and they have a career to protect. There are investor protections and advocacy organizations to help as well.
Whether you turn all your decisions over to someone who earns your trust, or whether you take care of some of the decisions yourself - learn about what you're doing. It's your future.
 
Emefef said:
There is a distinct difference between a financial advisor and a bank teller. Telling people that a licensed advisor is putting money in everyone's pockets but theirs makes it tough for them to evaluate that advice.
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I am not speaking about a bank teller, I am talking about advisors, or are you saying they do not receive commission when they "advise" someone to go with certain investment?
 
If you give them enough money you can negotiate the fees/commissions.

FA (whether thru bank or stand alone financial investment offices) is great advice imo.
 
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Emefef said:
There is a distinct difference between a financial advisor and a bank teller. Telling people that a licensed advisor is putting money in everyone's pockets but theirs makes it tough for them to evaluate that advice.
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Most, if not all, investment advisers that work in the bank branches... are clueless! They pump the products they are told to pump and usually have little to no understanding of what they are actually talking about. They pump products that are good for the bank.
Try asking one of them about preferred shares for the bank they work at!?
 
FA s that are fee only and not % based on your $ are the way to go imo.
That being said, if you don't have a bank account like @crankcall's, ? then saving and paying down debt should be #1 priority.

@mimico_polak, RESP for both my boys. If you can't max out, be like @meme and get parents, aunts/uncles etc to help out. Kids have too much "stuff" now anyway imo.
If you haven't read the Wealthy Barber, you can borrow my copy. Basic financial advice that can give you a solid foundation.


Sent from the Purple Zone
 
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