Posts: 1628
Location: carl sagan's universe
Posted on: 09-12-08 17:36:56
Location: carl sagan's universe
Posted on: 09-12-08 17:36:56
Quote:
Originally posted by pratickm
Quote:So out of your first $2000 contributed, about $600 is invested, correct?
Originally posted by nari
You are right its an individual plan and the enrollment fee is $60.0 per unit with total enrollment fee of $1339.26 for 22.42 units. I have committed $50.0 a month in this plan. I called the customer service number today the guy on the phone was quite helpful. Told me i can pull out all my money from the account and transfer to another institution or bank but they would deduct my total Enrollment fee upfront.
So essentially, you have "lost" $1400 regardless of whether you pull out now or stay invested?
Are all your investments being made in that IA Diploma fund?
That fund hasn't made any money since its inception in 2001 and with it's high fees, it will most likely continue to lag normal market returns.
Hi Pratickm- I do believe u r confusing the Global plan with the IA diploma- they are 2 different type of fish.
The Global plan invests in municipal, provincial and federal bonds plus T-bills. They have positive returns every year since inception- anywhere in range of 4-7%.
In the Global plan you do not lose the enrollment fees. If carried out till the end , all the enrollment fees are re-imbursed.
Since you are suggesting starting at the outset by investing in GICs and then into mutual funds if need be- this Global plan is better than a normal GIC in the banks/fin inst in terms of return but not in terms of flexibility.
If Nari had taken the group sponsored plan- it is much better than GICs as there are no restrictions on a group sponsored plan and the returns are much better.
Each trust plan must be seen individually. In general as you say Trust plans are not as good as self directed ones but each situation and plan has to be judged on a case by case basis- I know u know that.
Just like mutual funds and LSIFs. In general LSIFs have been battered but since the new ruling in 2006, and especially now with the markets so low, investing in labor sponsored vehicles is a plus since you get 30-35% extra tax returns up front and heck in eight years the powers that be will def make an upward movement in the stock market o/w the stock markets as we know it will be a dead institution and that ain't a happenin'.
Posts: 1628
Location: carl sagan's universe
Posted on: 09-12-08 17:48:38
Location: carl sagan's universe
Posted on: 09-12-08 17:48:38
Quote:
Originally posted by Blue_Peafowl
Very nice Topic.
I will definitely GET BENEFITS FROM THIS TOPIC.
I am thinking of saving money for my kids.
I was debating should I put money towards RESP or is there any other alternative?
I have one year old Girl and one more coming in May 2009. I am thinking of having joint account for both babies. Is it better to wait till second baby or I can start with one now and join second one after?
Just to let you know I don’t have any investment FOR myself and my wife due to my financial situation BUT I WANT TO SECURE MY KIDS FUTURE.
I CAN AFFORD TO PUT AROUND 300$ -400$ PER MONTHS TOWARDS KIDS INVESTMENT
CAN ANY ONE SUGGEST ME THE good OPTIONS to invest?
That's interesting to know. Several of my clients who have monthly investments (PACs) into RRSPs and RESPs and who have lost their job immediately cut off their RRSP PACs but have maintained their RESP PACs.
I have to salute you guys! Bache pehle!
However you can open an RESP family plan a/c now and add another child later on, when she is born*. As to the options , several have have been listed here.
*As a side note- maybe I am reading this wrong- you say you have a daughter and are expecting another one in May 2009. Maybe I am from Jurassic Park, but can one know already if a child will be a boy or girl this early thru sonic tests? In my days it wasn't till the 5th month till we got to know. Or is ur statement to be read as another child is on its way in May 2009?
Anyway that's a general question to anyone who can answer- at what stage in pregnancy can one know a child's gender?
Quote:Yes, darn I got both the posters mixed up.
Originally posted by investpro
Hi Pratickm- I do believe u r confusing the Global plan with the IA diploma- they are 2 different type of fish.
The Global plan invests in municipal, provincial and federal bonds plus T-bills. They have positive returns every year since inception- anywhere in range of 4-7%.
shaileshjkumar posted first asking about IA Diploma and then "nari" intercepted the thread with her own question about Global.
I apologise for the mix up.
Quote:As long as he/she is comfortable with the restrictions, that should be ok.
In the Global plan you do not lose the enrollment fees. If carried out till the end , all the enrollment fees are re-imbursed.
Since you are suggesting starting at the outset by investing in GICs and then into mutual funds if need be- this Global plan is better than a normal GIC in the banks/fin inst in terms of return but not in terms of flexibility.
If Nari had taken the group sponsored plan- it is much better than GICs as there are no restrictions on a group sponsored plan and the returns are much better.
I find pooled plans hard to understand (at least the ones I had experience with).
There are often hidden fees, illiquidity and almost impossible to get out of without losing most of your contributions.
I'm referring to plans like USC, CST, etc.
Plus the returns are not guaranteed.
It is equally easy to buy a mutual fund that invests in T-Bills and provincial/municipal bonds, etc.
All the major banks have at least one such fund and the fees are less than 1%.
Global may be different/better and as long the poster understands the terms and conditions, go for it.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
I am personally grateful to all of you, for giving me a more clearer picture of the whole RESP concept.
Quote:Thanks Investpro, yes I don’t have any RESP investment yet and is going to start one as my son is just 1 month old. As I have gone through the discussions in this thread, I am sure I am going to go in for a family plan with a bank where I can make sure I break up my investments in three areas 1/3 in Bonds and GIC, 1/3 in Money Market and 1/3 in Mutual Funds. I am just little concerned not to take a wrong step and land up losing some good hard earned money.
Originally posted by investpro
For Shailesh-if you don not have a trust plan in place as yet- best to go with a bank/financial institution that will not charge you maintenance fees, as those are less rigid than a trust plan.
Quote:Thanks Pratikm, I am going to find out more details about the RESP self directed family plan from out of the top 5 banks and will go ahead with the one which suits the best as per my plan for investment growth and security of the principal. I’ll make sure to go through CIBC’s option carefully. My primary banks are BMO and Scotia and could not find them much of a good option.
Originally posted by pratickm
It doesn't really matter.
Each of the major banks have an investment arm and you can open accounts with them.
Or you can stick to the bank itself and invest in the mutual funds and GICs offered by them, which is not a bad thing either.
In this regard, I would rate CIBC slightly lower than the others.
Which is your primary bank?
Go with them.
Quote:He he he yeh for sure Pratikm. I treat my every hard earned penny as a million dollar. After going through a struggle as a new landed immigrant and then getting on tracks hoping everyday that I did not do a mistake coming to Canada now I am sure not going back. So I do like to know in detail where the penny is going and if I would not lose it. But yes it is a common say the where there is gain there is risk, so I am prepare to take the risk but not to the extent that I land up losing everything. I am going to do exactly on how the suggestions have been coming in this thread discussion.
Originally posted by pratickm
Meh, too much overhead for RESP purposes.
If you were investing $1M then it might make a difference.
Some types of your investments like GIC or high interest savings accounts will be covered by CDIC insurance anyway.
There will be CIPF insurance (for what it's worth) beyond that in case of bank failure.
I don't think you will want to invest in individual stocks and bonds initially, so it'll probably be safe to have the RESP at one bank only, except in the case of an overall financial system failure and then RESP is a moot point anyway
Quote:I am going to do exactly what you suggested Pratikm. I just wish I had known more about the mutual fund and what bond index fund, TSX index fund and ETF. But by time I it will be clearer and would be able to decide what to do with what is in the RESP account. I wanted to know if the self directed family RESP plan is flexible to move the funds from one type like GIC to another like Mutual Fund in later days like after 5 years time. Also, I would be able to move the grant money same as my portion of RESP.
Originally posted by pratickm
I suggest initially start by opening an RESP account with one of the major banks and invest only in fixed term GICs and high interest savings account within the RESP.
Then start looking into the mutual funds and start understanding what they are, how they invest your money, what they invest in, what is meant by returns, what are fees and how they affect your returns, etc.
I would not recommend that you start investing in mutual funds right away, esp. at a time like this.
Keep in mind a universal rule in investing - do not invest in something you do not understand.
Good luck !
Folks that’s the last of my questions, as lot of it is clear.
Good question Pratickm, I will call the customer service once again tomorrow and check where my funds are invested. Actually, i opened the Account with Global back in 2006 when my daughter was born. I deliberately didn't max out in investing with this account for 2 reason first i also thought same way like you didn't have confidence with trust companies and other if i had to move out of the country or had a job loss i wouldn't have been able put in max amount. I thought it was a good idea to make a lumpsum amount any time rather than committing to maximum Limit.
The other reason i opened with Global was i wanted to give some business to a family friend whom i couldn't deny as he is an Agent with Global.
Based on the phone conversation i had with Customer service that i had called yesterday he told me my total money in the account was roughly about $3200 including grants, my contribution ($2000), and interest accrued. He told me if i moved out of the plan they would deduct about 1350$ Enrollment fees out of this total amount and pass on rest to other institution where i want the money to be moved.
Looking at this calculation it seems if i move all my money i loose all the government grant upto now plus the interest.
Once again Thanks Pratickm & Investpro and all others for building up these thread with your expert opinion. I definitely think it would help others like me who have some confusion or want to clarify things with respect to RESP investments.
Quote:
Looking at this calculation it seems if i move all my money i loose all the government grant upto now plus the interest.
As far as I know, the only money you will loose is enrolment fee and other admin fee if any. Also you pay approx $ 50 for transfer.
Government grant is for your child and will have to move in case of transfer of RESP.
Quote:
In the Global plan you do not lose the enrollment fees. If carried out till the end , all the enrollment fees are re-imbursed.
Investpro,
Is is true even if your child does not go for four year degree program? What if your child go for two year program? Do you not loose enrolment fee for remaining two years?
