When people have babies they’re swimming in expectations, obligations and hormones. Those are the prime days of vulnerability. The insurance guys descend, prey on emotion and walk off with nice commissions on needless policies. Realtors have a field day selling people debt and deeds even though the kid would be a happy renter. But perhaps most heinous are the baby vultures, shamelessly peddling college funds to parents of newborns.
Now, don’t mistake. Money for uni is hugely important. School costs a ton, especially if your spawn ends up being a dentist or, like David, a PhD earner. And the thing called an RESP is a valuable tool for getting there. But, but, but. Beware. A good idea can twist into a costly trap.
“When my daughter was born, my father started an RESP with Canadian Scholarship Trust (CST), which is one of those mutual fund outfits you rightly decry,” says David, a 40-ish academic in BC. “He made the initial contribution and then I made regular contributions for several years until July 2019.”
It was that year that I wanted a closer look at the return on my investment. It was going “up” so it looked fine (of course it would! I was contributing monthly!). But when I calculated it, it seemed to be an annual rate of return of 2%. Remember, this is for the 10 years that started from the bottom of the GFC to the heady days of the Trump years. I asked them to show me their calculations but they never replied. That’s when I decided I needed to transfer my contributions to my self-directed account. I would have done it earlier but I did not realize I could also open an RESP in a self-directed account. I suppose the banks don’t advertise it a lot so you’ll buy their mutual funds instead.
Well, what a nightmare it has been to transfer those funds because CST doesn’t want to make it easy to lose their money. The charges are outrageous. So with a $4613.69 penalty on an approximately $26K balance, is it worth it? I’m pissed at the low returns, the high MERs, and my bank’s incompetence in handling the transfer, which has cost me at least a year of good returns. Thanks for you all you do. Feel free to share my story to your readers. Certainly a cautionary tale with real figures for those who invest in mutual funds.
When David asked for the transfer, the company initially rejected it, writing: “We want to make sure you understand the impact this will have on your child’s post-secondary education savings. Transferring your child’s RESP to another institution may have a significant effect upon your current savings and the amount of money you will have to help finance their post-secondary dreams.”
You bet. The hit for David was almost 18% – and that came after a decade of returns below the prevailing inflation rate and during a bull equity market. This is what happens when you’re talked into an RESP with an outfit that charges high fees, misinvests and erects a costly barrier to exit – just like those DSC (deferred service charges), which create a mutual fund prison for unwary investors.
Are we pregnant? Then this is what you need to know about Junior’s college fund….
The Registered Education Savings Plan is a tax-sheltered way to grow money and the government pays you to have one. Woo-hoo. Once a kid has a SIN you can start. Contribute $2,500 a year and the feds will give you a $500 grant – which is the easiest 20% you’ll ever earn. The lifetime contribution limit is $50,000 and you have over 30 years to put the funds in. The most the government will chip in is $7,200 by the time the child hits 18.
The contributions and grants swell within the RESP tax-free, which means they should be in growth-oriented assets like equity ETFs. (Way too many helo parents choose brain-dead GICs and do their kids a huge disservice – or sign up with the wrong provider.)
When university starts money can be taken out and given to the child. Contributions are tax-free, while the grants and growth are taxable in the student’s hands. But since most college kids have no taxable income, there’s nothing to pay. If the kid becomes a TikTok star and eschews school, contributions to the RESP can be taken back, the grants have to be repaid, and the growth can go into an RRSP, if you have the room and the plan’s been in place for a decade or more.
Remember that anyone (called a subscriber) can open an RESP for a child (called the beneficiary) – not just parents. Missed grants can be carried forward one year at a time. There’s no limit to the size of annual contributions – but the max is fifty grand in total (and only $2,500 a year qualifies for the grant). Beneficiaries can be changed if your kid turns out to be a stinker. Family plans give more flexibility, since funds can be shifted between offspring. All plans have to be wound up after 35 years.
In short, if you procreate, do this. Tax-free growth. Forced savings. Free grant money. What’s not to like? Just ensure the self-directed RESP is hosted somewhere that offers the ability to hold low-cost, growthy ETFs. That could be an online brokerage, robo outfit, or your family advisor. No vultures.
About the picture: “I’m one of your younger millennial blog dogs and have been reading your blog everyday for almost 2 years now,” writes Kayla. “Thank you for the great advice! Attached is a picture of my two-year old golden retriever, Marley looking oh so proud of herself after finding a mud puddle. She’s been loving that I WFH and will let out a loud sigh every couple hours while I work to let me know we aren’t doing anything fun like finding mud puddles to play in. Feel free to use it on your blog!”
89 comments ↓
Know drama today!
Just the Facts!
flop i think it was you who asked… from turbo tax.
Interest relief – You may be able to defer payment until April 30, 2022 and not pay any interest on your 2020 taxes owing if you meet all of the criteria outlined by the CRA. Learn more about 2020 personal income tax interest relief.
link didn,t copy… here is it \
https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/covid19-taxes/interest-relief.htm
Thank you for the article. I have a couple of questions though. It seems there are quite a bit of restrictions if the child doesn’t go to University.
If you have room in the TFSA, and not enough savings to maximize it, should you put all your savings in the TFSA or still contribute to the RESP?
If your children go to University in another country, can they use the money from RESP, or will there be restrictions?
Thanks again!
Is Ontariowe the test zone of the New Green Deal reset?
A list of land the tax slaves have been kicked off by law/war.
We are 403 days into these ‘temporary’ (wink wink) state of emergency measures. For our health of course.
– Campgrounds
– Golf courses
– Public parks
– Provincial Parks
– Sports and athletic fields
– Hiking Trails
– Patios of businesses
– Ski Hills; some snowmobile trails were ordered closed too.
– Provincial & National borders are closed. Virtual Berlin Walls are in place. Loved ones and families are seperated. They are ‘non-essential’ travel. Just as the real Berlin Wall accomplished.
– Childrens’ playground (note they just backtracked on this one, the science just changed!)
But why? Our elites consider us to be the virus. We are being locked in our UN Smart Cities for Containment .
–This big dog is howling because no longer may it be walked on the lakeside-path.
https://twitter.com/simonetenk/status/1383464878489309185
2021: they’ve locked the lake #ontariolockdown #OntarioisDying #ontpoli
—–
—– This is the new green deal. Control over our Movements, check. It all makes sense when you realize we are the thing to be contained, suppressed.
https://twitter.com/anthonyfurey/status/1383111201199112193
This slide from today’s Science Table report is a reminder that Ontario’s response is not about shutting down places that are found to be causing spread, but about shutting down whatever they can so as to reduce the reasons a person has to leave their home.
Great RESP reminder Garth. Garth, am I correct in recalling that for an older child, under 15 years of age, a parent (or other subscriber) can contribute $2,500 for the year that we’re in and also for the previous year in order to get the 20% CESG grant?
Marley is only one mud-puddler. Max and Skye are TWO.
And they can’t miss a puddle. In fact they will run back and forth till it is just about splashed out Oh, and you can see that they are laughing their asses off while doing it.
I have made similar mistake opening an RESP with Investors Group for the first child. After 7 years the average return turned out to be 2.6% per annum. Waited 7 years to transfer the money without paying a deferral charge. Still was charged some fees around $500, took 2 months to finish the transfer. I would be better off taking the money years earlier, paying the charges and investing myself.
When they give you’re a “seatbelt” instead of a “parachute” don’t get in the vehicle.
But as per yesterday you occasionally need to be able to “take the pain!”
————————-
Nice to see Ontario Police Forces feeling squeamish about overreach, gives me some confidence in Western societies tradition of freedom.
https://nationalpost.com/news/ontarians-waking-up-to-tough-new-pandemic-restrictions
Hi Garth, does your company manage RESP. Thank you
All major brokerages, banks, discount brokers and roboadvisors, among others, host RESPs. – Garth
#89 Faron on 04.18.21 at 1:08 pm
It’s interesting that some are so concerned with lies from Stone (no dog in that fight) yet don’t care about Elon’s lies. I guess if it makes you money, ethics can be ignored.
https://www.dailymail.co.uk/news/article-9484391/amp/Two-die-Tesla-auto-pilot-no-one-driving-crashes-tree.html
///////////////
Is that dirty Musk posting comments here again?
Let me at em.
last seen at a McDonalds drive-thru. Big Mac combo and a cheesenurger as the appetizer …now off to local parks to make sure no one’s there as the cops tuned him out
#2 Phylis on 04.18.21 at 1:29 pm
flop i think it was you who asked… from turbo tax.
Interest relief – You may be able to defer payment until April 30, 2022 and not pay any interest on your 2020 taxes owing if you meet all of the criteria outlined by the CRA. Learn more about 2020 personal income tax interest relief.
#3 Phylis on 04.18.21 at 1:31 pm
link didn,t copy… here is it \
https://www.canada.ca/en/services/taxes/income-tax/personal-income-tax/covid19-taxes/interest-relief.htm
//////////////////////////////////
Hey Phylis, thanks for the help.
I’m not sure if they made a mistake or not, or took pity on me because I’m a poor self employed guy, but in any case I went to the bank yesterday and paid my taxes owing in full.
GST collected last year handed over, last week, as well.
I might just hang around the house today.
Yesterday was an expensive walk…
M46BC
Some say that Kanada and Australia are the test bed of our Globalist’s designs.
https://www.news.com.au/travel/travel-updates/pm-open-to-home-quarantine-says-no-rush-on-international-borders-reopening/news-story/22c60115c09394354fd2e2346733b03c
PM open to home quarantine, says ‘no rush’ on international borders reopening
A senior minister has left open the possibility of ankle bracelets in home quarantine…
Prime Minister Scott Morrison on Sunday raised the prospect of fully-vaccinated Australians going into home isolation when returning from abroad in a bid to free up hotel quarantine space.
—T2 said on Global News build back better and reaching the 2030 Agenda Goals. His words. 30 second clip. 9 more years.
https://twitter.com/tiffanyrg9/status/1327980100361416704?
—-
—- Guess I’ll file this one under Breeding.
Menstrual changes to be expected after COVID-19 vaccine, during pandemic: (ctvnews.ca)
https://www.ctvnews.ca/health/coronavirus/menstrual-changes-to-be-expected-after-covid-19-vaccine-during-pandemic-experts-1.5391236
——
——
— Science in Kanada is…different – BC’s Economic Shutdowns
https://www.jccf.ca/court-permits-government-to-avoid-producing-dr-hinshaws-evidence-on-lockdowns-at-may-3-trial-of-pastor-james-coates/
“In the Charter challenge to Dr. Hinshaw’s orders that was filed in the Court of Queen’s Bench in December 2020, the Court has given the government until July 2021 to file its scientific evidence, even though the Justice Centre already filed its scientific evidence in January. Due to procedural steps and delays on the part of government lawyers, that court challenge will not be heard until at least September 2021. The court challenge to Bill 10 has faced similar delays,” continues Mr. Carpay.
— Not here in Kanada! A negative test or two should suffice it. Science here is…different.
.Mandatory hotel quarantine illegal, Icelandic court rules (gript.ie)
Hey Garth,
What if your child chooses not to go to uni/college and your RRSP’s are maxed? Where does the growth go then? TFSA? Taxable account?
Also, in a family plan, you mention the plan is finished in 35 years. Does the plans start date reset once a new child is born or is it a hard rule of 35 years beginning when the first child is born?
Thanks for all you do and really appreciate the information!
Very good post today blog God.
Divorce is certain in canada.
I noticed that your avoiding the subject of the Ontario lockdown and worsening spread of Covid19 in developing countries (ie India). Why? It’s still a big issue no?
It’s interesting that all of the vaccine stocks are starting to break out again. Is the market anticipating an ongoing problem, boosters and annual vaccinations required?
My chart of the REAL PRICE of HOUSING of Vancouver, Toronto and Calgary Single Family Detached and the Bank of Canada $CAD Commodity Index and 5 Year Fixed Mortgage Rate is up with the March data:
http://www.chpc.biz/real-price-of-housing.html
Nominal housing price increases and the historic interest rate lows have been the real price supports since 3Q 2019
DELETED
Good article. Would love to hear next where there are some good deals to be scooped up in the stock market. Please and thank you
Hi Garth,
For the people that have the money, you should talk about the benefits of front loading the plan with an extra $14,000 the first year (for total of $16,500) or ASAP, and then just contributing enough to max out the grant money every year after that. The total once all contributions are done is $50,000
Basically you get nearly 20 years of growth on that extra $14,000. You better hope your kids going to be a doctor though or else you will need to figure out what to do with the extra money (#first world problems).
We have done the whole RESP thing end to end with 4 kids. Pick good blue chip stocks or ETF’s. Use a discount broker. Get a Group or Family plan, because not all withdrawals are going to be the same. the subscriber can remove their contributions any time. There are alot of rules, and diligent research needs to be done. Garth just touched on the basics.
Looked at setting up one for the grandkids, but take note: THERE IS AN AGE LIMIT FOR THE SUBSCRIBERS! If we started one for the grandkids, and the ones to come along later, we would run out of time before we hit the age limit.
Excellent program, and free money.
I’ll go off topic and urge everyone to get their COVID shot, even if all you can get is Astra Zeneca. Only people who are bad at math or watch Global News and think it’s actually news refuse to get the shot.
The math is real simple; you are far more likely to get a blood clot from sitting on your a$$ watching Global National News than you are from getting a shot of Astra Zeneca. The added bonus is that you’ll also be helping open the economy back up by removing government excuses to keep it closed.
Do you hate your local, provincial or federal politicians guts?
Had enough of the never-ending lock downs?
Then go get your shot and then tell them to go pound sand.
Dougie has lost his mind, how can u lose something u never had in the first place!!!
Meanwhile in Alabama a baseball game has 47000 thousand people in attendance at 50% CAPACITY…loool
A good advice, benign Blog today, a.k.a.
Calm before the storm tomorrow.
My Liege saving his repartee and bullets for that.
Personally I think Vlad the Impaler’s favorite spawn will not say or do much to offend yet, give more money out to Canadians since THAT seems to work well.
————————-
Watching, reading recent Ontario MSM, Twitter outrage and conclude:
ON is pretty much beaten into Covid submission but they whined enough to Gov Nanny to let them go outdoors and frolic in a PLAYGROUND.
The poor things.
Not even in Zona Rossa Italia does THAT happen.
There is a line in the snow* (beach sand if in Italia now). Gov Nanny snowshoe stepped* over it (barefoot now in Italia).
————
The GOOD people of ON. Good you.
*
[diluvium/fluvium, dinghy in words familiar to you BC for this time of the year – mind you in Summer you still wouldn’t catch me dipping a toe in Victoria’s Inner Harbour or English Bay without an Epinephrine autoinjector handy]
#14 TurnerNation on 04.18.21 at 2:32 pm
Of course they will succeed in the great white north and down under.
As for Europe, we will burn it first before that happens.
It won’t be the first time.
NOBODY here cares about italy ….u do understand this, right?
is this dude mentally ill?
Our story: We have two children.
The RESP we opened for our 1st child was similar to other stories. Got a visit at the hospital from USC (now Knowledge First); Upfront enrollment fees, ongoing insurance and depository fees, contributed enough to get max CESG per year. It was invested in CAD bonds (no choice) so overall low rate of returns. It worked out ok because we kept contributing.
Three years later, for our 2nd child, we became little bit wiser and setup a self-directed RESP. Initially we started with Edward Jones with mutual funds with high MER and transaction fees.
Then we learnt about ETFs.
When the RESP limit was raised from 40k to 50k in 2007, we invested the new 10k for our 1st child in a self directed RESP with an all equity ETF and that has grown steadily since.
For our 2nd child, we moved everything out of Edward Jones into Questrade with a mix of Bond, Preferred, Equity ETFs and laddered GICs.
Our 2nd child’s RESP is now more than 100k while our 1st child peaked at 80k before we started withdrawing from it to pay for university in 2019.
Lessons learnt:
1. Investing in all bonds or mutual funds with high MER and transaction fees eat into growth.
2. When there are 10 years left for your child enters university, rebalance your portfolio every year and move 10% more into bonds, preferreds and GICs so that the year your child enters university you are almost 80 – 100% in preferred, GICs and cash.
This is such an important post!! My god. SO IMPORTANT. I was peddled education wares like mad when my twins were babies. I’m my father’s daughter though and have set up ETFs with a discount brokerage.
@Garth, you should tackle the RDSP next. It’s one of the most generous gov’t plans in the world. Also only 1 of the Big 5 have it as a discount brokerage product.
I also echo #4’s comment on RESP vs TFSA. We are late to the party with the RESP for a plethora of reasons (one of which necessitates the RDSP and our emotions). Kids are now 12. Only 1 will have the opportunity for post-secondary. At this stage in the game, am I better off with the tax-free growth in a TFSA?
“#4 RESP vs TFSA on 04.18.21 at 1:34 pm
Thank you for the article. I have a couple of questions though. It seems there are quite a bit of restrictions if the child doesn’t go to University.
If you have room in the TFSA, and not enough savings to maximize it, should you put all your savings in the TFSA or still contribute to the RESP?
If your children go to University in another country, can they use the money from RESP, or will there be restrictions?
Thanks again!”
#29 re.
Isn’t internet anonymity great, you can insult complete strangers without risking your features being rearranged.
I actually read comments and links offered by commenters with whom I don’t necessarily agree on any given topic. If it piques my interest I’ll check it out, if not, there’s the scroll…try it instead of bitching.
#4 RESP vs TFSA on 04.18.21 at 1:34 pm
Thank you for the article. I have a couple of questions though. It seems there are quite a bit of restrictions if the child doesn’t go to University.
If you have room in the TFSA, and not enough savings to maximize it, should you put all your savings in the TFSA or still contribute to the RESP?
If your children go to University in another country, can they use the money from RESP, or will there be restrictions?
Thanks again!”
————-
Do not prioritize a TFSA over the RESP. Nobody’s granting 20% to TFSA, and the TFSA room never runs out. Use it later.
There are very few restrictions of educational field (including trades) or geography on use of the RESP.
New Lockdown Protocols for Blog Posters
Effective April 18:
______________
In accordance with Garth’s wishes to enhance safety and also reduce environmental impacts, the following measures are now in place here:
Repeat posters with no other apparent lives will be Covid-tested each time they post their ramblings here, not just daily.
This means you, Crowdedelevatorfartz, Sail Away, Ponzius Pilatus, TurnerNation, Faron, Penny Henny, Nonplused, Stone and Dharma Bum, plus any others exceeding two posts daily.
Garth cares about the environment, and is concerned about the waste generated by the Amazons excess swabs. So we have changed our protocol for the posters listed above:
1. Each poster will be swabbed using one swab only, even on repeat comments made anytime during the same day.
2.For each test, the same swab will first be inserted anally. Then nasally. Then orally.
3.The combined results will then be tested.
4. After oral insertion, any vomit produced will be bagged and put in the composter and donated to a community garden. Amazons will also be trained in CPR and choking intervention. For any habitual posters who do not survive the testing process a private funeral home in Lunenburg has agreed to do pickups and cremations at a very competitive rate. They will accept Bitcoin as well as e-transfers for payments. No real estate, however.
5.This should improve the safety of all Amazons and reduce swab waste by over 50%.
Thank you for your contributions and adherence to safety protocols.
Emma Zaun
Shop Steward
CUPE
(Canadian Union of Peelers and Exhibitionists)
Great blog. Merci. Live in the west and got laid off some years back when the economy was heading south. Was an estimator/PM for 20 years after having been in the field for as long. Red seal ticket and bunch more stuff. Anyway I could not find work and stumbled onto getting licenced to sell RESPS with one of the big independent providers. That’s all they do ya know so like they know eh. Passed the courses. Started to look into the company and similar providers and all was not good. I could not bring myself to sell their products and we parted ways. Did learn a bit about RESPS so it was not a total waste. Please listen to Garth. Lots of shysters out there.
Wife and I got first covid shot. We were offered the AstraZeneca and were happy to receive it. Folks get whatever shot you are offered as soon as possible. It ain’t just about me. Thanks Garth for telling your readers to get their shot as we could be in for a nasty ride till this is over. Take care all.
Don’t forget, if you’re one of the poors (sub ~$100k) you get an extra $50! And an additional $50 if you’re extra poor!
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps/canada-education-savings-programs-cesp/canada-education-savings-grant-cesg.html
hey look Ford is getting famous!!
https://www.washingtonpost.com/opinions/2021/04/18/ontario-covid-lockdown-doug-ford-canada/
LMFAO, rock bottom for Ontario?
hey Ford is becomig famous!!
https://www.washingtonpost.com/opinions/2021/04/18/ontario-covid-lockdown-doug-ford-canada/
LMFAO!!! rock bottom for Ontario?
#29 re., dolce vita on 04.18.21 at 4:55 pm
NOBODY here cares about italy ….u do understand this, right?
is this dude mentally ill?
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There are 3-4 guys on here who have real control issues. Always angry. Always trying to control others. Always. People come here for various reasons. It’s none of your business. Penny Henny, get a life! Don’t be such a loser. We all know you’re the re. guy.
Just scroll on. And take you blood pressure medication.
#29 re., dolce vita on 04.18.21 at 4:55 pm
“NOBODY here cares about italy ….u do understand this, right?”
I care about Italy (and the rest of Europe). You should too.
“is this dude mentally ill?”
I have no idea. He provides useful information. But you’re unbelievably rude.
To all millennials having kids:
Garth speaks truth!
We don’t align politically on all issues but we do on money management.
Have a daughter who will be 3 years old in June.
She has already 15k in her RESP. All in one etf (VGRO).
From Quebec so we have additionally money from the Province (sorry Alberta!).
Thanks for all your information Garth- saved my butt and my daughter’s)
Agree with Garth about the RESP companies. I recall the “Welcome Basket” they gave new parents included a pamphlet from one of the them. We too signed up.
We were a lot more risk averse 25 years ago so I did a lot of due diligence into the company. Was more worried about the company going belly up than about capital growth of the RESP.
But as time went by we too noticed the returns were paltry. So we wised up, and set up a parallel self directed RESP. Never looked into outright cancelling the original plan but from the poster above it sounds painful.
So sure, if we had to do it again, go self directed, with a touch more conservative bent than you might on your own portfolio. After all it would really be disheartening to have to tell your kid you lost it all on bad investing.
Good cautionary tale today. These plans should be grouped in with “whole life” insurance, another tragic mistake many people make. Or used to. Does anybody still buy “whole life” policies? I haven’t had anyone try and sell me one in a while. But back in the day it seemed to me they were way too expensive as compared to a regular life insurance plan and then invest the difference. Also too restrictive. Could be a topic for another post if they still exist.
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My bank (like most) is pretty aggressive about making sure I am aware or open practically any account they can think of, including RESP’s. They want to capture the business too. Much better to deal with a bank or investment advisor.
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#23 Steve-0 on 04.18.21 at 3:27 pm
Hi Garth,
For the people that have the money, you should talk about the benefits of front loading the plan with an extra $14,000 the first year (for total of $16,500) or ASAP, and then just contributing enough to max out the grant money every year after that. The total once all contributions are done is $50,000
Basically you get nearly 20 years of growth on that extra $14,000. You better hope your kids going to be a doctor though or else you will need to figure out what to do with the extra money (#first world problems).
—————————————–
The government doesn’t care what you do with the money, you only need to provide proof of enrollment. They don’t even care if the kid passes. It’s sort of like child support, they don’t have the time or the interest to see how the money is spent or demand receipts. Just prove the kid is in school. You can buy the kid a car with the money if you want. Or yourself. And it can be any certified school (i.e. trade schools count too, but I don’t think diploma mills do).
It all has to do with the way the government views the family budget; basically as a pool. So much money comes in and so much goes out, but they don’t try to track which dollar came from where and where it went. Many people paying child support get angry when they see the ex riding around in a set of new wheels but so far as the government is concerned it is just one more household expense.
Not sure what happens if the kid goes to a US school, but if you have money for that I doubt you care much about the $7,200. I love my kids, but there ain’t no way I’m paying $40,000+ (US) a year to send my kid to university when there is a perfectly good one 15 minutes from my house that costs less $4,000 a year. Even if your kid goes away to school, which two of mine did, but stays in Canada, you’ll have a hard time spending $40,000 (US) a year.
#23 Steve-0 on 04.18.21 at 3:27 pm
Hi Garth,
For the people that have the money, you should talk about the benefits of front loading the plan with an extra $14,000 the first year (for total of $16,500) or ASAP, and then just contributing enough to max out the grant money every year after that. The total once all contributions are done is $50,000
Basically you get nearly 20 years of growth on that extra $14,000. You better hope your kids going to be a doctor though or else you will need to figure out what to do with the extra money (#first world problems).
———
Good advice Steve-O. Just figured this out this year. Plan on doing this with my child’s RESP. Going to top-up the $14K.
When she is ~18. My plan is to withdraw the $50K of contributions; tax-free with no strings-attached. And then help her withdraw the Grant + Gains over her 4 years of post-secondary.
She is only 2, but I figure she should have $40K of Grant + Gains in 16 years. This beats paying tax on non=registered investments.
JR
Shady resp sellers aren’t the only ones trying to take advantage of new parent emotions. Look at cord blood storage. I remember talking with my wife about it when my son was born. Luckily I ask a lot of questions because I’m a very curious person.
You’re told that having the cord can save your child’s life if he/she developed any of the rare diseases. You’re also told that who knows what else you’ll be able to do as the technology advances.
Great sales pitch, now the reality. If your child as a genetically caused illness the stem cells in the cord have it too so it can’t be used for treatment.
In conclusion do the right thing donate it to a public bank to be used to help anyone I did.
Life is like a puddle and only kids…and dogs…know best how to deal with it.
#42 nonplussed
Not sure what happens if the kid goes to a US school, but if you have money for that I doubt you care much about the $7,200. I love my kids, but there ain’t no way I’m paying $40,000+ (US) a year to send my kid to university when there is a perfectly good one 15 minutes from my house that costs less $4,000 a year. Even if your kid goes away to school, which two of mine did, but stays in Canada, you’ll have a hard time spending $40,000 (US) a year.
————
You got that one right.
Also the possibility of bringing them home in a casket must be taking into consideration.
Not worth the hassle and the extra coin.
While this kind of smart financial advice about the RESP is useful, it would be even smarter to engage our front line heroes, our REALTORS®, and buy property in your child’s name at birth.
Then, rent it out, and maybe sell it eighteen years later for at least four times the purchase price, and your child can go to Harvard and Princeton, no problem.
REALTORS® can make a difference in every area of your life, especially in raising your children.
Thanks for this post Garth!
Father in law started the RESP for my son when he was born right before Covid hit and I didn’t have a say in the matter at the time… Well technically I did, but I didn’t want to step on the toes of proud grandpa…
Bookmarked this post for next year when I take over the oversight of the RESP.
Keep up these types of posts, they are much appreciated!
Beggars belief that we’re not banning flights from India. Over a quarter million new Covid cases in last 24 hours. And a nasty variant as well. We stopped flights from the UK immediately, why not India.
These variants don’t fly themselves here.
TIME magazine:
“Clmate is Everything”
————–
O’Toole gets it, but not his party.
There is a possible that, unless the cons start climbing on the Climate train, there may never be a conservative party in Canada again.
Or a Republican party in the States.
#29 Re.,
Where is it acceptable to ask someone if they are mentally ill
No one chooses to be mentally ill
Would you imply someone was flawed if they had cancer
Wake up! It’s 2021
@#47 Realtors vs renters
So about a week ago I decided to clear up my Hydro billing.
I have been paying my bills every two months for 9 years and about a year and a half ago I stopped getting my emailed bills…
Weird but ok.
I kept paying my bills on a bi-monthly basis for the same amount.
So this week I decided to phone hydro and find out why i wasnt receiving my e-bills.
Seems the new building owner 1.5 years ago had erroneously marked my suite as “vacant” and started paying the hydro for the suite.
Hundreds of suites, vacancies rolling in and out…..
Oops.
Anyway, I now have a 1.5 year Hydro credit and the gal at Hydro has changed the suite back into my name for billing.
“They may catch it. But I doubt it. We see this all the time. ”
Thank you anonymous landlord……..
There is almost no chance for the average young person to own property without family support unless they are married
I completely agree with this blog, but as an almost 50 year old, I have friends who in my age range that are starting again from zero.
They had houses with nice yards, but are now getting divorced in the last few years.
They have to pay child support and alimony in some cases, and are moving back home with their parents or if their parents have money, helping them out to rent a new 2-3 bed room apartment, in a sketchy neighborhood like Rosedale or Thornhill, so they can see their grand children.
Its not just the young who are screwed in hard times.
I will probably never have my own house as a single father with join custody of a 6 year old kid, but I am making it work with what I have.
Correct me if I am wrong but if you miss a year of contributions you can put $5000 in the next year to catch up and still get the 20% grant. This is assuming you have not reached the maximum of $7200 in government grants.
Correct. – Garth
Garth- Please remind people that RESPs are a curious beast and a subscriber must name a successor subscriber in his will.
The money belongs to the subscriber until it is paid to the kid. Sounds innocuous enough, but if the subscriber dies and hasn’t dealt with the issue of a successor, the money falls into his estate and goes to the residual beneficiaries.
I am shocked that the rules are set up this way. Many a grandparent has meant to do good and had it backfire. It’s sadder when a saving parent dies with successor.
I always have a problem with the phrase “easiest 20% you’ll ever make” in regards to the RESP. You don’t actually make 20% if you just spend it on your childrens education. Which is the point of course, but it’s not like an “easy 20%” on a TFSA which you’ll eventually draw from.
Dumbest comment of the weekend. Congratulations. – Garth
https://twitter.com/biancoresearch/status/1382330625588334593?s=21
Looks like WFH is here to stay in many metropolitan areas. Businesses have used the pandemic to shed real estate costs.
if ever a person out of his league, its poor Doug. Actually feel for him at this point- does anyoe around him have the courage to tell him to resign? Think he’s too proud a man
https://www.thestar.com/opinion/editorials/2021/04/17/ford-government-should-focus-on-source-of-the-pandemic-not-flail-about-with-pointless-restrictions.html
Bitcoin Crashes As Much As 15% Amid Unsubstantiated Report Of Money Laundering Crackdown. In a crash that started late on Saturday evening and accelerated throughout the night, Bitcoin and the entire cryptocurrency space plunged the most in more than seven weeks, just days after hitting a new all-time high ahead of the Coinbase IPO.
Bitcoin fell 12% to $53,400 as of 8:0 a.m. in New York on Sunday, after plunging as much as 15.1% to $51,707.51 in the Asian day. Ethereum, the second-largest token, dropped almost 18% before paring losses.
The market-wide crash has in $1.72 billion worth of long positions liquidated in just one hour alone. Expanding this range to 24-hours shows that 927,000 traders’ positions worth nearly $10 billion were wiped off, with $68.73 million being the largest liquidation so far according to FX street.
#29
It seems our Italian friend has a lot of supporters! Maybe it just makes us fee sophisticated to have an Italian connection.
He posts some information on Canada too, and generally offers a lot more than some regular posters here (looking at you Stone).
Sweet, what do I win
Saw two homes in Winnipeg last week. The one was 1320′, had a hot tub, single car garage, done up nice but cheap, no drive way (dirt)… Sold $90k over list price of $410k. Insane. My mother in law came to see it, laughed, told us “where are you going to put your bikes? The living room? GTFO”. She was right.
We could afford that, but why? $501k for a house worth $350k a year or two ago? The brand new ones are “only” 510k for 500-600′ more, with a drive way.
My kids might have too get used to a bunk bed in our two bedroom, payed off 1250′ condo. Lol. On the flip side, dad and mom are not stressed at all about money.
DELETED
That RESP story is sad
We front loaded our kid’s RESP and today they have 100k at age 9
It’s the initial investment + compounding time that becomes more valuable than the $500 CESG when they’re born
I think they’re good
#34 Emma Zaun – GreaterFool Unpaid Intern #007 on 04.18.21 at 5:57 pm
This means you, Crowdedelevatorfartz, Sail Away, Ponzius Pilatus, TurnerNation, Faron, Penny Henny, Nonplused, Stone and Dharma Bum, plus any others exceeding two posts daily.
——————————————
First of all I think you are browsing too much IP (internet porn).
Secondly, I and most of the others on the list typically only respond to Garth once, the rest is conversation among ourselves. TurnerNation excepted, he’s doing his own thing. But whatever I have a scroll wheel, so I am not joining the chorus that wants him banned.
Typically if you mention me in the comments, good or bad reviews alike, I will do you the honor of responding unless I have logged off for the night.
Ya, I have figured out why I spend so much time here. First of all the wisdom both from Garth and others, but also because I hate Facebook. I don’t even have a Tinder account. I’m not sure what TicTok even is. Frees up a lot of time. I do have WhatsApp recently but that is only to track what’s going on with my son’s soccer team. Not sure why they don’t just use TeamSnap. But I’m not willing to take over management of the team. Been there, done that.
#58 Doug Ford
if ever a person out of his league, its poor Doug.
—————————–
T2 provides a much better ‘out-of-league’ example. It’s frightening when one finally realizes there’s nobody in charge at the national level.
The provinces are essentially on their own. I wish them the best of luck. Fifteen years ago, Douglas Coupland said “you have no idea how bad it’s going to get”. I tried not to believe it then. Now, I’ve got no choice.
Wow!! Hong Kong bans all flights from India China and Pakistan , transit that were rerouting scams through Singapore to hide India as origin destination Canada also stopped. But Canada still allows free access. Canada still admits with fake Covid tests. Certs showing Covid free on departure but magically Covid positive arriving in Canada were “fooling” Canada Immigration. But now Hong Kong slams the door. The move will likely save thousands of Canadian lives. Thank you Hong Kong. Saving lives that Tru-Anon had written off.
Let’s get serious. Australia slammed the door shut. Result has been a total of 900 dead. Try-Anon by comparison has killed 25000 because no border health checks were done for an entire year. Even while thousands are still dying Tru-Anon still allows full flights of sick from hot spots.
Trudeaus vaccine by race and riding is causing spikes of infections overall. Has Canada been chosen as an experiment to see which G7 country leader can kill the most citizens before they revolt? Something has to happen. The recent scam, Vaccine appointments, just kicks the can down the road and let’s Trudeau off by faking it.
A new budget? Are u that stupid?
#29 re., dolce vita on 04.18.21 at 4:55 pm
NOBODY here cares about italy ….u do understand this, right?
====================
Never been anywhere except Canada, have you?
S’ok, you’re in good company. There’s no cure for small minds when they’re really determined to remain small.
If anything Dolce understates the charms of Italy.
In memory of old hound dogs… including Garth’s own Bandit!
———-
King went a-runnin’ after deer
Wasn’t scared of jumpin’ off the truck in high gear
King went a-sniffin’ and he would go
Was the best old hound dog I ever did know
I had a dog and his name was King
I told the dog about everything
There in my truck the dog and I
Then one day the King up and died…
https://www.youtube.com/watch?v=V_HW_2nve2w&list=RDV_HW_2nve2w&start_radio=1
Glad I was not born with the “I Must Procreate” gene. Never saw the appeal.
58 Doug Ford on 04.18.21 at 9:51 pm
if ever a person out of his league, its poor Doug. Actually feel for him at this point- does anyoe around him have the courage to tell him to resign? Think he’s too proud a man
______________________________________________
I still have not forgiven the PC party for picking him as their leader. We are being referred to as the Florida of Canada. Florida! My friends…we could have done so much better.
@#34 Emma Zon
Even after alllllll that typing…..it still wasnt funny….
Budget day today.
My prediction.
Prepare for Chrystia’s “epiphany” Budget.
Where the Liberals get to use the Pandemic to create a socialist utopia of “free” this and “free” that.
Where Trudeau uses the Pandemic to remold Canada in his socialist image.
Mr Butz has succeeded.
Canada has become Cape Breton.
As China prepares for war.
Children are in charge.
‘Alberta Premier Jason Kenney says the province will be lowering the minimum age to receive the AstraZeneca COVID-19 vaccine to 40 years old from 55.’
The next two weeks will be very interesting. Should have done it two weeks ago, but better late than never.
Interesting watching the recent Ford/Trudeau verbal sparring contest.
Doug Ford is first and foremost a businessman. He’s running (as best as one can) Ontario as a business management unit.
Years ago I had a manager who said “if you see a problem at a specific level in the org chart, and it’s not rectified in 6 months, the problem’s not there, it’s higher”
The main issue is lack of vaccines. Doug Ford is (basically) helpless to remedy that, but finally lashed out at his superiors on Parliament Hill.
What comes back from the PM is. 100% political speak – teflon-based redirect my failure to my opponent. If you listen to our PM’s rebuttal, and, even just read Dolces’ statistics postings here, it’s obvious.
Unfortunately, a large part of the population has short term memories…
DELETED
Can two individual RESP plans be merged into 1 family plan?
Yes. – Garth
Emma Zaun – you nailed it, hun!
Maybe some self-absorbed empty commenters here will be now too afraid to get swabbed, and get a life instead.
lol.
@#75 Another Deckchair on the Titanic
“Unfortunately, a large part of the population has short term memories…”
++++
Yep.
And then they vote Liberal.
HAPPY B-DAY, BOOMERS!
Be part of the change.
Or be run over by it.
With $400 billion in deficit and $1.2 trillion in debt to be kicked down the road the tire tracks will be running right up your Millennial butt. – Garth
@#78 Colin
“hun” ?
+++
Somewhat sexist and derogatory.
But what I expected from the lonely cheering section.
Clap……clap……clap……..
Swabs? Pfffft.
I received my AZ Vax on Friday.
Zero ill effects.
You?
just got off the phone with DeSantis, its going to be okay!! ….we got this. This isnt my fault! They kept the vaccines!….be safe!
@ the Jag
This just happened to be my “word of the day” today, how serendipitous!
https://www.czechclass101.com/czech-phrases/04192021
“Jaguár loví potravu.”
Hope things are going well in YYC, don’t let the haters get you down. In solidarity with the country’s best province, I’m looking to get back to converting massive amounts of fossil fuel into noise and movement sooner rather than later.
Lots of craziness afoot, what exciting times to be alive!
@ #75 Seriously, you think the only problem facing Ontario is a lack of vaccines?
Doug Ford just closed Provincial parks because apparently Chipmunks are a leading source of Covid transmission – who knew? And golf balls, green grass and that swing set in the neighbourhood park are also to blame.
Come on. Doug Ford has been playing pandemic theatre from the start and on the weekend his lack of integrity was called out by both his science advisory panel and a drywall company’s employees in Toronto doing “essential” work.
Speaking of short memories… do you remember this?
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-governments-deal-a-one-two-punch-to-consumer-protection/
The Wynne gov’t was all set to introduce a law banning Deferred Service Charges and other shading tactics being used by the investment industry. The Ford gov’t killed that legislation against the recommendation of the OSC. I wonder why.
Doug Ford should step aside and let someone who has the courage to face the truth and stand up to the business / industry that paid his way into government.
And forget about changes regulating realtors and the tactics used to sell houses in Ontario while Ford is Premier. The man has no backbone where his friends are concerned.
@#83 BillyBob on 04.19.21 at 9:28 am
Oh yes, ‘“Jaguár loví potravu.”. I am hunting for food, life and all things interesting.
I don’t worry about the haters, and I have a lot of faith in this province. As Elizabeth Bennet ( Pride and Prejudice) once said ” My courage always rises with every attempt to intimidate me”.
Indeed it is a great time to be alive. Opportunity everywhere for those whose eyes are open to it.
Live in a tent or a car. It is cheaper.
The budget feels like it was put together based off of marketing research with the goal of getting more votes.
@#75 Another Deckchair on the Titanic
“Unfortunately, a large part of the population has short term memories…”
++++
https://rehaaish.com/
Yup.
And then they vote Liberal.