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The cat’s meow – $$$.
On the way to earning the big bucks – start small with savings. It has been said “it is not how much you earn, but how much you keep”. So starts part II of money matters.
Once again, this blog is intended to educate not advise. Be sure to meet with a personal advisor to determine your investment strategy. Most meetings are free (after all everyone wants your investment). Meet with a couple of advisors – not just your bank. Remember ask about cost and risk. Advisors will be quick to tell you about an investment’s past experience but somewhere in that paperwork is a disclaimer that past performance is not indicative of future performance. If they do not ask you about your lifestyle and short term/long term goals – you may be in the wrong place.
RESP
Registered Education Savings Plan
The beauty of this investment is the government’s contribution of 20% up to a maximum of $500 for your annual contribution of $2,500. The maximum the government will give over the lifetime of your investment is $7,200.00. Your lifetime max per child is $50,000. As usual there are carryover rules for the 20% government contribution when you don’t contribute up to $2,500.00 a year. There is also an additional government grant for lower income households.
Keep in mind the same investment vehicles as an RRSP (GICs, mutual funds, stocks, shares to name a few) applies to RESPs. Your principal is not taxed and the grant/earnings is taxed in the hands of the beneficiary i.e. the student who may have little or no income. If your child is born after January 1st 2004 and you receive a National Benefit Supplement you may be eligible for a Canada Learning Bond ($500 up to $2000).
I know finding the money to invest is difficult. If you receive the Universal Child Care Benefit ($160 for ages 0 to 5 and $60 for ages 6 to 17), that is approximately $20K. The government grant is 20% that is free money that you will get without counting any earnings made on your principal. Consider it an option if you can.
Start saving! Time waits for no one.
Money matters.
