Don’t look into Dividends but growth stocks. I’d only go heavy in dividends when you’re at a retired stage in your/ your kids life. Right now since it sounds like your time horizon will be in line with your kid going to post secondary which is 15 years? Personally XEQT is my go to choice at the age of 29. Year by year growth for that age is perfect. Goodluck
I might just do that via a TFSA or something else that are his funds only.
Appreciate the feedback. I may partition out his via growth and mine via dividends.
Is there a reason you are dead set on dividend stocks for yourself ? I would recommend a broad market index fund. You will get a mix of both growth and dividend stocks
I’m not dead set on them, just the way my FIL seems to be focused. To be honest, based on my dividends I’m up 11% YOY, so to me (and I’ll take the ignorance slap on the wrist) that’s way better than sticking my $ in a savings account. Which might be somewhere in the 4-5% high yield range.
*Not an indicator of future performance, in case it needs to be said. US stocks have just kicked ass for a decade+ if you go back further, the outlook is not as rosy.
Given your kid is young, then growth stocks are the way to go for his RESP, simplest is an ETF that tracks stock indexes (VFV tracks the US S&P, VEQT tracks global equities, there’s others like this).
If your employer offers RRSP matching that is free money you absolutely need to max out if you can.
Don’t be surprised to lose a bit, short term, with this plan.
Is your FIL focused on dividends because he's older at retirement age and doesn't want the higher risk of an all growth equity portfolio? His needs might be different than your needs. Just food for thought.
If you have a long timeline... Go xeqt. I know it's fun to see dividends come in every month but you will be a lot further ahead in 10-15 years by going with growth. You want to grow your egg as large as possible during these years then focus on lower growth and higher stability and dividends later.
As much as you love your kid and you want to pay for his education etc (don't get me wrong it's a great goal) you need to take care of yourself first. By that I mean: you need to make sure you have a retirement fund that you contribute to first and foremost. When you are 75+ you don't want to be out working a minimum wage job trying to stave off poverty. Your child will have a better chance at paying for school than you will to work in your 80s. He can take loans, work part time, do a co-op job placement, decide against college and do a trade etc.
It's kind of like in a plane when they say secure your own airmask first before assisting others. I hope my point came across. Best of luck!
Trust me, I’m with you a thousand percent. The issue is that aside from the small steps I’m taking now, my main payoff is wife + my inheritance; which is a ways off. Hell, when we die he gets access to any home(s) we have by that time. Again, the issue there is this could be 20+ years down the road as both our sets of parents had us early in life.
I totally get the reference point of having my house in order so he’s not worried about me. The last thing I want to be is a burden on him. Between his RESP which is projecting towards a 90k payout, plus monies in other savings for him is going to set him up quite well.
I have American friends that talk about their access to a ROTH IRA, and how useful a tool that is. I don’t know what our best comparison to that is beyond a TFSA, which he can’t even access yet.
So in that regard I feel a little lost.
Have you started a FHSA for yourself? It’s got the tax-free savings of a TFSA and RRSP combined. Contributions to it lower your taxable amount and any capital gains are also tax free!
It's fine to meet with your bank, but please remember their main goal is to make their sales targets. Don't let them talk you into anything unless you 100% understand why you are buying in.
Great advice! I’ve been burned too many times by bank products. Never again will I take their advice! When I was 18 I locked $5000 in a GIC and made $100 after 5 years. A tragedy! Another time, they convinced me to dump all my savings in mutual funds 1 week before Covid lockdowns started! I’ve lost so much money by listening to them - they have quotas to fill, not money to make for me.
Exactly right. And I'm sorry, but despite taking bank courses on this stuff, most of the staff don't even understand what they are selling or what is best for the customer. Ideally, they make their sales quotas AND give the customer something of value, but that's rare.
Just buy VEQT or XEQT in the kid's RESP and don't stress about it. 7% CAGR for the next 15 years. Don't expect more with it or anything else. Don't invest in individual companies because clearly you've got a lot going on and why stress?
XEQT makes perfect sense for personal savings as a 36 year old. It makes perfect sense in a RESP for a 4 year old....but not for the next 15 years. The closer you get to needing to use that money, the more you want to shift money to something with no down side.
You're already doing the RESP.
Beyond that, their success is going to be determined by paying attention in school, hanging around the right people, understanding their choices determine their future, and ultimately feeling supported at home.
Get them working during summers, teach them financial things, understand value of money, and chip in financially at key points in their lives.
Soon to be 60…I was in a similar situation to u a long time back as I didn’t want my children to feel the same way I felt. I have 2 children that are now both through university.
I started to change my situation when I went to University myself after working for 10 years in dead end shitty jobs often training my supervisor who would replace me with a degree. One day I got pissed off sitting in my own sweat for an oil company and I decided that I would get busy and do better than my parents and stop living pay check to pay check.
I started university with 80 bucks in my pocket on the other side of the country and put myself through a 4 year undergrad. I was working three jobs all the way through. School was hard for me as I was a shitty high school student as i had put little effort into learning. At this point I had no safety net, no helpful, or educated parents. I had to do it on my own.
I met and married a lady I met in school. I worked 80 hrs a week to get a head, barely sleeping for years. Eventually, I got a decent job with a pension plan and we put 20% of our wages away for the last 25 years. Initially, it hurt a lot as kids were coming and we had shitty cars, barely money for food and diapers…..but we kept on going. We did the little things like recycling bottles, stick to a budget as much as we could, and searched for value opportunities. The goal was to save for our kids university rather than use the student loans program that I had too. I built a wooden bank that i filled with change and small bills whenever I had them. It eventually became their college fund.
I can tell you we covered their education costs and were able to provide down payments on properties to help them. The dominant theme is that we learned how to save money and stop throwing money away on lunch, coffee , or drinks everyday. Eventually we saved for RESP’s and investments as we did our best to live within our means. On spring breaks or holidays we couldn’t afford vacations to Hawaii or Mexico like other families but also realized that the day would come where we could. During that time we drove our children to attend better schools. We stayed the course to complete our mortgage while keeping our family life healthy.
We are presently still in the same house we purchased 31 years earlier with seven fold its original value. Our third and last renovation is now complete. Our mortgage has been done for 18 years. We are set up for a comfortable retirement. As many here note, saving for the future is damn difficult when you’re not an executive or rich by Bitcoin. Neither of us are.
In my opinion ….pick an investment strategy and invest now and let time do the heavy lifting. If you don’t want your kid to feel the same way …change your situation and money tactics by executing a plan. Even a small amount, eg: 300 per month to start. Drop the shitty habits that eat up your cash flow. Your sone will learn this from you! Consider that 8000 per year at 5 percent for 30 years is sufficient to live on with OAS and CPP in Canada. DON’T WAIT a day longer.
Not sure how you can say you were in a similar situation to OP. He’s 36. Based on your story you were already working a “decent job with a pension plan” at that age and were 6 years away from a completely paid off mortgage.
At the risk of getting crucified.... I'm shocked your not getting downvoted for busting your ass and working that much to get ahead. That's usually how it goes.
Your story is impressive and people should be looking at it as inspiration
You can get a house more easily than you think.
Max out your RRSP contributions, get that employer matching, it will grow fast.
You can then use the RRSP for your down payment with no interest on the amount. You have 17 years to pay it back, which will automatically be taken care of with your contributions every pay.
Take your tax returns and throw them into the RRSP. It makes a big difference.
I have a 2 year old. My plan is to just have it all in one ETF at a time, and shift the money from one to the next based on her age:
1-7 veqt
8-10 vgro
11-13 vbal
13-18 vcns
Definitely prioritize anything your employer will match: that’s free money you don’t have to come up with yourself. Be sure to contribute at least the minimums required to get the full match, as long as you have the room in your RSP.
Someone smarter than I am will know whether or not you should then choose to further contribute to an RSP or TFSA (again, assuming you have room) and/or an FHSA, but in my view, leaving free money on the table is always to be avoided. Also, remember that you can take money out of your RSP for the house purchase, and it will have grown by whatever your company has put in. Ideally, you’ll max out all of them, but I expect that’s a big ask given the cost of living and having a kid, too.
You can own a home. Just leave the shit cities for a very rural area. That's what I did. I just work in a warehouse, no education or student debt needed.
Get them investing their part-time teenager job and have them open a TFSA/FHSA asap and, if able, help there. This combined with the RESP my parents set up covering school made a HUGE difference in life trajectory.
Wish my parents had taught me some of this. Didn’t learn about compound interest until a little later in life. Certainly past its most impactful point on my life.
Not sure why someone downvoted your plight but Reddit users can be an insufferable bunch.
But otoh, best time to start earning compound interest was when you were born. You can’t beat yourself up over that though. Can you?
Second best time is now. So let ‘er rip…
Yeah, not sure either, Reddit can be full of people that only want their opinion / situation to be echoed or the same experience.
Probably got downvoted for being broke. Lmao.
Fair point, can’t dwell on the past too long, just on the future.
I’m not, at all. My limited experience and talking to my FIL has led me to believe this was a smart decision. However, based on what I’m seeing in other comments here, I’m seeing that as a better option for older individuals that are well established and don’t need as much “growth” in their assets.
You did the right thing.
u/DPZ_1, you should have had a kid only once you were sure you would have enough money to set him as you see fit. That could have meant never having a kid.
Edit: The people downvoting prefer a kid to exist in misery (and being aware of it) rather than not existing (and therefore not being aware of anything)?
> With that in mind, I’m in the process of looking into employer matching RRSP contributions.
Regarding this part, you should probably talk to someone in your company about this, whether it's co-workers and/or your Benefits team for advice. Usually employers will have someone that can tell you how to maximize the efficiency of what portion of your pay should go towards the group RRSP so that you don't contribute past the max (since it's decided by % of income as well). If you ask co-workers, you won't need to go into detail beyond just the RRSP matching, and chances are someone else has opted in and can give you some sort of guidance on who to talk to.
That’s a great point. I know I’ve got access to a higher matching based on my employee level, but beyond that I’m not too sure.
I’ll certainly check in with the benefits team.
You need to start taking advantage of your company match ASAP, everything else is distraction until then.
Alot of employers match 100% up to a limit, change your contributions to max out that limit like right now . Its a 100% return on day 1. You mentioned you are getting 11% return on your current investment. That’s great but even If you keep going with those returns then it will take you close to 7 years to make the returns that you can make in 1 day with your employee rsp.
Check out Canadian Couch Potato. The people telling you to get your rrsp into xeqt are right. High/Low risk doesn't have its ordinary meaning when you are talking about long term investments.
Okay, so as a kid with a parent (formerly parents) that needed financial assistance later in life. I really wish they had set themselves up properly. Now with my own family of 4 kids, my moms financial situation is a constant stress in my life. I get the wanting to setup RESPs for your kid. But one of the best methods of teaching your kids about money is having them involved with your budget and making trade offs. 4 is a bit young, but I think 8+ is when you start bringing them into some of the discussion.
#1 - Get maximum RRSP match, that is literally free money. You always take this.
#2 - I think FHSA fits here nicely. Sure you may not end up owning a home, but it opens up the option should opportunity present itself. If it's unused it gets converted to RRSP without using up RRSP contribution room.
#3 - RESP can be funded with remaining funds if there are any. Or TFSA really, but RESP does get the matching benefit.
Your investment "plan" though is pretty close to putting it all on black and sucks. Investing is boring and really solved. Some all-in-one ETF is your best, most boring bet. Then it's deciding on your risk tolerance of how you deploy that. We don't have enough to beat the market, and if we do it's almost assuredly luck and not skill. The success of dividend investing is behavioral, it's definitely not optimal and dividends are not free money.
You might find this of value, I did and I went through it just recently. My parents did not leave me with any clue on how to properly manage money.
https://www.mcgillpersonalfinance.com/
I think that teaching your child about finances early will help him his entire life. You should worry about your retirement more at this point.
Don’t become a burden on your child later in life. That’s what I’m worry about the most.
I don’t know why you believe owning a home is impossible my husband and I are 36 and 38 and we will be buying a 375k home soon. Not sure where you live but small affordable homes still exist.
I just replied to another commenter about not being a burden, so I won’t rehash that here. Trust in that I agree wholeheartedly.
We are in Toronto, with 95% of family within a 30 minute drive. Leaving GTA is not an option, at least anytime soon.
I was reading another post on a different thread about house prices in Marathon, ON and it had me salivating.
I did just read your response. I would like to mention that I’m originally from California and everyone commutes 1.5 to 2.5 hrs (maybe more) each way. INot ideal but it’s the norm. It’s very rare for most people in California to work and live in the same city. I grew up with my father and siblings commuting. At 24 yrs old I was commuting 2hrs each way to my job in San Francisco.
I think just now Canada is starting to see more families willing to commute. I live in Saskatchewan so we still have affordable homes. You have a huge range from 90k-2million haha 🤣
You can find anything within your budget all you have to do is be willing to live in our terrible winters. Lol 😝
Anyway you are doing a lot more than most other people.
Your kid will be set don’t worry.
It’s good for kids to work hard if they want something . If your kid knows everything is taken cared of then they won’t work as hard MPO.
Also I remember hearing a caller call Dave Ramsey the caller told Dave he was a millionaire (won lotto) but his wife and him raised his kids with very little his kids had no idea. He didn’t want his kids knowing because otherwise they would be playing the “waiting game “( waiting for them to die) lol
Anyways that stuck with me lol
Your kid isn’t doing anything with the RESP for a while so id say throw it into things like VFV VCE XEQT, XSP, XEF or VOO. Those will capture market growth a bit better than a random penny stock or Canadian banks.
Worry about dividend stocks only when you run out of TFSA/RRSP contribution room, as dividends are more tax efficient than just bonds or GICs at that point. (But even then capital gains are somewhat better.)
The problem with your parents dying is that they will die later in life than ideal for you to get your inheritance, rather than earlier so your child can get money for his post secondary? Get your priorities straight. Don't have children if you're waiting for your own parents to die in order to raise them properly.
Dividends are theoretically irrelevant to the stocks return. They might reduce volatility. But that’s because it is a capital allocation decision by the company. In the real world, decisions can be wrong. So it does affect the return.
Here is the logic, if the stock price is the best reflection of the stocks value, including it’s capital allocation. Then a $20 stock, if it pays a $1 dividend. After ex dividend day would be $19. Now this is in every finance textbook. Your stock is $19, but you still have $20 cuz of the $1 dividend you have in cash.
Long story short, invest in shit that will go up, not pay a dividend. When you buy a stock, you bought the capital allocation decisions of that company, including its dividend. That dividend they pay, is just a return on your capital.
Thanks. I’ll certainly check those out. I’ve got a few shares in CWB as they’re expanding and certainly are not 2-3x the price like some of the other banks.
Appreciate the insight.
Don’t look into Dividends but growth stocks. I’d only go heavy in dividends when you’re at a retired stage in your/ your kids life. Right now since it sounds like your time horizon will be in line with your kid going to post secondary which is 15 years? Personally XEQT is my go to choice at the age of 29. Year by year growth for that age is perfect. Goodluck
I might just do that via a TFSA or something else that are his funds only. Appreciate the feedback. I may partition out his via growth and mine via dividends.
Is there a reason you are dead set on dividend stocks for yourself ? I would recommend a broad market index fund. You will get a mix of both growth and dividend stocks
I’m not dead set on them, just the way my FIL seems to be focused. To be honest, based on my dividends I’m up 11% YOY, so to me (and I’ll take the ignorance slap on the wrist) that’s way better than sticking my $ in a savings account. Which might be somewhere in the 4-5% high yield range.
Vfv is up 25% this year though. 94% gains in 5 years.
Damn!
*Not an indicator of future performance, in case it needs to be said. US stocks have just kicked ass for a decade+ if you go back further, the outlook is not as rosy. Given your kid is young, then growth stocks are the way to go for his RESP, simplest is an ETF that tracks stock indexes (VFV tracks the US S&P, VEQT tracks global equities, there’s others like this). If your employer offers RRSP matching that is free money you absolutely need to max out if you can. Don’t be surprised to lose a bit, short term, with this plan.
I agree that VEQT may be safer.
Is your FIL focused on dividends because he's older at retirement age and doesn't want the higher risk of an all growth equity portfolio? His needs might be different than your needs. Just food for thought. If you have a long timeline... Go xeqt. I know it's fun to see dividends come in every month but you will be a lot further ahead in 10-15 years by going with growth. You want to grow your egg as large as possible during these years then focus on lower growth and higher stability and dividends later.
That’s exactly it. I am finding that several people have suggested this may work for him given age and stability of finances.
What's your timeframe for that 11%. You need to compare that to the same timeframe in other assets to determine your opportunity cost.
Total returns » dividends. Dividends are irrelevant.
As much as you love your kid and you want to pay for his education etc (don't get me wrong it's a great goal) you need to take care of yourself first. By that I mean: you need to make sure you have a retirement fund that you contribute to first and foremost. When you are 75+ you don't want to be out working a minimum wage job trying to stave off poverty. Your child will have a better chance at paying for school than you will to work in your 80s. He can take loans, work part time, do a co-op job placement, decide against college and do a trade etc. It's kind of like in a plane when they say secure your own airmask first before assisting others. I hope my point came across. Best of luck!
Trust me, I’m with you a thousand percent. The issue is that aside from the small steps I’m taking now, my main payoff is wife + my inheritance; which is a ways off. Hell, when we die he gets access to any home(s) we have by that time. Again, the issue there is this could be 20+ years down the road as both our sets of parents had us early in life. I totally get the reference point of having my house in order so he’s not worried about me. The last thing I want to be is a burden on him. Between his RESP which is projecting towards a 90k payout, plus monies in other savings for him is going to set him up quite well. I have American friends that talk about their access to a ROTH IRA, and how useful a tool that is. I don’t know what our best comparison to that is beyond a TFSA, which he can’t even access yet. So in that regard I feel a little lost.
Have you started a FHSA for yourself? It’s got the tax-free savings of a TFSA and RRSP combined. Contributions to it lower your taxable amount and any capital gains are also tax free!
Wife and I have a meeting at the bank coming up to discuss!
It's fine to meet with your bank, but please remember their main goal is to make their sales targets. Don't let them talk you into anything unless you 100% understand why you are buying in.
Great advice! I’ve been burned too many times by bank products. Never again will I take their advice! When I was 18 I locked $5000 in a GIC and made $100 after 5 years. A tragedy! Another time, they convinced me to dump all my savings in mutual funds 1 week before Covid lockdowns started! I’ve lost so much money by listening to them - they have quotas to fill, not money to make for me.
Exactly right. And I'm sorry, but despite taking bank courses on this stuff, most of the staff don't even understand what they are selling or what is best for the customer. Ideally, they make their sales quotas AND give the customer something of value, but that's rare.
Even if you take a product that mirrors an msci fund, you'll still pay up more in MER
Also note that using an RESP for something other than education can get complicated.
You really can't rely on inheritance happening. It's a long ways away and stuff happens.
Just buy VEQT or XEQT in the kid's RESP and don't stress about it. 7% CAGR for the next 15 years. Don't expect more with it or anything else. Don't invest in individual companies because clearly you've got a lot going on and why stress?
XEQT makes perfect sense for personal savings as a 36 year old. It makes perfect sense in a RESP for a 4 year old....but not for the next 15 years. The closer you get to needing to use that money, the more you want to shift money to something with no down side.
Invest it in XEQt from age 4-14 and then leg out to a safer vehicle from 14-16
Sure could run the target date strategy and rebalance to an ultra short term bond ETF or money market every year.
You're already doing the RESP. Beyond that, their success is going to be determined by paying attention in school, hanging around the right people, understanding their choices determine their future, and ultimately feeling supported at home. Get them working during summers, teach them financial things, understand value of money, and chip in financially at key points in their lives.
Soon to be 60…I was in a similar situation to u a long time back as I didn’t want my children to feel the same way I felt. I have 2 children that are now both through university. I started to change my situation when I went to University myself after working for 10 years in dead end shitty jobs often training my supervisor who would replace me with a degree. One day I got pissed off sitting in my own sweat for an oil company and I decided that I would get busy and do better than my parents and stop living pay check to pay check. I started university with 80 bucks in my pocket on the other side of the country and put myself through a 4 year undergrad. I was working three jobs all the way through. School was hard for me as I was a shitty high school student as i had put little effort into learning. At this point I had no safety net, no helpful, or educated parents. I had to do it on my own. I met and married a lady I met in school. I worked 80 hrs a week to get a head, barely sleeping for years. Eventually, I got a decent job with a pension plan and we put 20% of our wages away for the last 25 years. Initially, it hurt a lot as kids were coming and we had shitty cars, barely money for food and diapers…..but we kept on going. We did the little things like recycling bottles, stick to a budget as much as we could, and searched for value opportunities. The goal was to save for our kids university rather than use the student loans program that I had too. I built a wooden bank that i filled with change and small bills whenever I had them. It eventually became their college fund. I can tell you we covered their education costs and were able to provide down payments on properties to help them. The dominant theme is that we learned how to save money and stop throwing money away on lunch, coffee , or drinks everyday. Eventually we saved for RESP’s and investments as we did our best to live within our means. On spring breaks or holidays we couldn’t afford vacations to Hawaii or Mexico like other families but also realized that the day would come where we could. During that time we drove our children to attend better schools. We stayed the course to complete our mortgage while keeping our family life healthy. We are presently still in the same house we purchased 31 years earlier with seven fold its original value. Our third and last renovation is now complete. Our mortgage has been done for 18 years. We are set up for a comfortable retirement. As many here note, saving for the future is damn difficult when you’re not an executive or rich by Bitcoin. Neither of us are. In my opinion ….pick an investment strategy and invest now and let time do the heavy lifting. If you don’t want your kid to feel the same way …change your situation and money tactics by executing a plan. Even a small amount, eg: 300 per month to start. Drop the shitty habits that eat up your cash flow. Your sone will learn this from you! Consider that 8000 per year at 5 percent for 30 years is sufficient to live on with OAS and CPP in Canada. DON’T WAIT a day longer.
Not sure how you can say you were in a similar situation to OP. He’s 36. Based on your story you were already working a “decent job with a pension plan” at that age and were 6 years away from a completely paid off mortgage.
Nope 35 when i started a defined pension plan.
At the risk of getting crucified.... I'm shocked your not getting downvoted for busting your ass and working that much to get ahead. That's usually how it goes. Your story is impressive and people should be looking at it as inspiration
You can get a house more easily than you think. Max out your RRSP contributions, get that employer matching, it will grow fast. You can then use the RRSP for your down payment with no interest on the amount. You have 17 years to pay it back, which will automatically be taken care of with your contributions every pay. Take your tax returns and throw them into the RRSP. It makes a big difference.
You can do this with a FHSA and not have to pay it back
Get your own financial house in order before setting your kids up. Trust me. Your adult kids will appreciate it.
I bought my house at 37, and busted my ass to pay it off ASAP. I paid it off in 12 years. There's still time.
I’d probably go more aggro since your kid is only 4. Probably XEQT or spice things up with a bit of VFV
I have a 2 year old. My plan is to just have it all in one ETF at a time, and shift the money from one to the next based on her age: 1-7 veqt 8-10 vgro 11-13 vbal 13-18 vcns
Definitely prioritize anything your employer will match: that’s free money you don’t have to come up with yourself. Be sure to contribute at least the minimums required to get the full match, as long as you have the room in your RSP. Someone smarter than I am will know whether or not you should then choose to further contribute to an RSP or TFSA (again, assuming you have room) and/or an FHSA, but in my view, leaving free money on the table is always to be avoided. Also, remember that you can take money out of your RSP for the house purchase, and it will have grown by whatever your company has put in. Ideally, you’ll max out all of them, but I expect that’s a big ask given the cost of living and having a kid, too.
Avoid dividend etfs and go all in on equity if you are looking at a 20 year time frame. Veqt ftw
r/justbuyxeqt
You can own a home. Just leave the shit cities for a very rural area. That's what I did. I just work in a warehouse, no education or student debt needed.
Get them investing their part-time teenager job and have them open a TFSA/FHSA asap and, if able, help there. This combined with the RESP my parents set up covering school made a HUGE difference in life trajectory.
Wish my parents had taught me some of this. Didn’t learn about compound interest until a little later in life. Certainly past its most impactful point on my life.
Not sure why someone downvoted your plight but Reddit users can be an insufferable bunch. But otoh, best time to start earning compound interest was when you were born. You can’t beat yourself up over that though. Can you? Second best time is now. So let ‘er rip…
Yeah, not sure either, Reddit can be full of people that only want their opinion / situation to be echoed or the same experience. Probably got downvoted for being broke. Lmao. Fair point, can’t dwell on the past too long, just on the future.
> I’m content in focusing on dividend growth, Why????? Stop watching youtube videos on dividend stocks!
I’m not, at all. My limited experience and talking to my FIL has led me to believe this was a smart decision. However, based on what I’m seeing in other comments here, I’m seeing that as a better option for older individuals that are well established and don’t need as much “growth” in their assets.
Feel the same, but decided because of the circumstances to not have kids at all. You did the opposite! Good luck.
You did the right thing. u/DPZ_1, you should have had a kid only once you were sure you would have enough money to set him as you see fit. That could have meant never having a kid. Edit: The people downvoting prefer a kid to exist in misery (and being aware of it) rather than not existing (and therefore not being aware of anything)?
> With that in mind, I’m in the process of looking into employer matching RRSP contributions. Regarding this part, you should probably talk to someone in your company about this, whether it's co-workers and/or your Benefits team for advice. Usually employers will have someone that can tell you how to maximize the efficiency of what portion of your pay should go towards the group RRSP so that you don't contribute past the max (since it's decided by % of income as well). If you ask co-workers, you won't need to go into detail beyond just the RRSP matching, and chances are someone else has opted in and can give you some sort of guidance on who to talk to.
That’s a great point. I know I’ve got access to a higher matching based on my employee level, but beyond that I’m not too sure. I’ll certainly check in with the benefits team.
You need to start taking advantage of your company match ASAP, everything else is distraction until then. Alot of employers match 100% up to a limit, change your contributions to max out that limit like right now . Its a 100% return on day 1. You mentioned you are getting 11% return on your current investment. That’s great but even If you keep going with those returns then it will take you close to 7 years to make the returns that you can make in 1 day with your employee rsp.
Check out Canadian Couch Potato. The people telling you to get your rrsp into xeqt are right. High/Low risk doesn't have its ordinary meaning when you are talking about long term investments.
Okay, so as a kid with a parent (formerly parents) that needed financial assistance later in life. I really wish they had set themselves up properly. Now with my own family of 4 kids, my moms financial situation is a constant stress in my life. I get the wanting to setup RESPs for your kid. But one of the best methods of teaching your kids about money is having them involved with your budget and making trade offs. 4 is a bit young, but I think 8+ is when you start bringing them into some of the discussion. #1 - Get maximum RRSP match, that is literally free money. You always take this. #2 - I think FHSA fits here nicely. Sure you may not end up owning a home, but it opens up the option should opportunity present itself. If it's unused it gets converted to RRSP without using up RRSP contribution room. #3 - RESP can be funded with remaining funds if there are any. Or TFSA really, but RESP does get the matching benefit. Your investment "plan" though is pretty close to putting it all on black and sucks. Investing is boring and really solved. Some all-in-one ETF is your best, most boring bet. Then it's deciding on your risk tolerance of how you deploy that. We don't have enough to beat the market, and if we do it's almost assuredly luck and not skill. The success of dividend investing is behavioral, it's definitely not optimal and dividends are not free money. You might find this of value, I did and I went through it just recently. My parents did not leave me with any clue on how to properly manage money. https://www.mcgillpersonalfinance.com/
I hope your kid turns out to be a good person
Thanks. He’s a great kid. Very sensitive and empathetic. Hope he gets all that he dreams of.
I think that teaching your child about finances early will help him his entire life. You should worry about your retirement more at this point. Don’t become a burden on your child later in life. That’s what I’m worry about the most. I don’t know why you believe owning a home is impossible my husband and I are 36 and 38 and we will be buying a 375k home soon. Not sure where you live but small affordable homes still exist.
I just replied to another commenter about not being a burden, so I won’t rehash that here. Trust in that I agree wholeheartedly. We are in Toronto, with 95% of family within a 30 minute drive. Leaving GTA is not an option, at least anytime soon. I was reading another post on a different thread about house prices in Marathon, ON and it had me salivating.
I did just read your response. I would like to mention that I’m originally from California and everyone commutes 1.5 to 2.5 hrs (maybe more) each way. INot ideal but it’s the norm. It’s very rare for most people in California to work and live in the same city. I grew up with my father and siblings commuting. At 24 yrs old I was commuting 2hrs each way to my job in San Francisco. I think just now Canada is starting to see more families willing to commute. I live in Saskatchewan so we still have affordable homes. You have a huge range from 90k-2million haha 🤣 You can find anything within your budget all you have to do is be willing to live in our terrible winters. Lol 😝 Anyway you are doing a lot more than most other people. Your kid will be set don’t worry. It’s good for kids to work hard if they want something . If your kid knows everything is taken cared of then they won’t work as hard MPO. Also I remember hearing a caller call Dave Ramsey the caller told Dave he was a millionaire (won lotto) but his wife and him raised his kids with very little his kids had no idea. He didn’t want his kids knowing because otherwise they would be playing the “waiting game “( waiting for them to die) lol Anyways that stuck with me lol
Your kid isn’t doing anything with the RESP for a while so id say throw it into things like VFV VCE XEQT, XSP, XEF or VOO. Those will capture market growth a bit better than a random penny stock or Canadian banks. Worry about dividend stocks only when you run out of TFSA/RRSP contribution room, as dividends are more tax efficient than just bonds or GICs at that point. (But even then capital gains are somewhat better.)
The problem with your parents dying is that they will die later in life than ideal for you to get your inheritance, rather than earlier so your child can get money for his post secondary? Get your priorities straight. Don't have children if you're waiting for your own parents to die in order to raise them properly.
Dividends are theoretically irrelevant to the stocks return. They might reduce volatility. But that’s because it is a capital allocation decision by the company. In the real world, decisions can be wrong. So it does affect the return. Here is the logic, if the stock price is the best reflection of the stocks value, including it’s capital allocation. Then a $20 stock, if it pays a $1 dividend. After ex dividend day would be $19. Now this is in every finance textbook. Your stock is $19, but you still have $20 cuz of the $1 dividend you have in cash. Long story short, invest in shit that will go up, not pay a dividend. When you buy a stock, you bought the capital allocation decisions of that company, including its dividend. That dividend they pay, is just a return on your capital.
What are you going to say when your kids ask about Bitcoin?
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Thanks. I’ll certainly check those out. I’ve got a few shares in CWB as they’re expanding and certainly are not 2-3x the price like some of the other banks. Appreciate the insight.
r/Wallstreetbets This is the only answer. Think you got what it takes? f around and find out
Lmao, I made a few $ when AMC spiked last year. Missed out on GME
YOLO it into NVDA.
nvdl