RESP's.... - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Nufy · 12-30-2007, 07:57 PM

Looking to set one up for each of my boys.

What do you use / recommend ????

FurnaceFace · 12-30-2007, 08:07 PM

Talk to Slava - investments are his thing.

MoneyGuy · 12-30-2007, 09:03 PM

Have your financial planner set up a self-directed RESP. If the kids are really young and you can handle the volatility, use global equity mutual funds with good long-term track records and sit on them for many years. That's the best way to go. PM me if you want advice on specific fund selection. Many planners don't really like doing RESPs. Actually, you might wait until the child is two or three years old. You might just put the same amount of money into an in-trust account until that time. This is because of the 25-year rule. Parents who open RESPs for infants could have problems with the 25 years. My son was just over 25 when he pursued a post-secondary education, which would have been a problem had he had an RESP opened when he was born. Whatever you do, stay away from the pooled RESPs.

Slava · 12-30-2007, 09:27 PM

Quote:

Originally Posted by FurnaceFace

Talk to Slava - investments are his thing.

Hey thanks for the plug!

If you are in Calgary and want to set one up I'd be happy to help; PM me!

Gravitykillr · 12-30-2007, 09:49 PM

Quote:

Originally Posted by fotze

Remember the one time $500 Alberta Savings grant too.

glad you pointed that out I forgot about setting mine up for my boy.

Rathji · 12-30-2007, 10:06 PM

I have been looking for a RESP for my little girl as well but the people who I have talked to before have been trying to get me to sign up for something that seemed like sawing off my own testicles with a toothpick.

Sent you PM Slava, if your toothpicks are nicer we may be able to work something out.

zukes · 12-31-2007, 08:14 AM

Try the Canadian Scholarship Trust Fund. They have been around since the '60's. You can't lose with them, even if your kid does not go to post secondary, all you lose is the interest but still get every cent you put in. Very flexible as well.

Rathji · 12-31-2007, 08:21 AM

Canadian Scholarship Trust Fund was one of the people I talked to, was not comfortable with paying the fee upfront and then losing everything if I couldn't pay for a month or two.

Rathji · 12-31-2007, 09:54 AM

you have to pay like 200 bucks per "unit" as a fee that is taken from your initial payments of 10 bucks a "unit" so for the first couple years a good portion of your payments are not collecting interest but going into their account. Then they claim that they are giving you your fee back in 20 years after collecting all the interest on it.

If i can get an RESP that doesnt feel like getting robbed at gunpoint, then I am all for it. I would rather pay a returns fee on the tail end that is a % of what the fund has earned me, even if it turns out to be the same amount or more, instead of paying the fee upfront and lose 100% of my investment if I cant make payments for a year or 2 due to me trying to raise a family and go to school at the same time.

Rathji · 12-31-2007, 10:17 AM

That is exactly what I am looking for!

10W30 · 12-31-2007, 10:49 AM

Quote:

Originally Posted by Rathji

That is exactly what I am looking for!

I interviewed with a few of those RESP companies when our daughter was born... and your right... it felt like I was being "sold" .... they were very persistant, and it seemed they just wanted to close the deal, and make me feel guilty about my childs future... I spoke to some folks from work and it seemed that for the most part, people were biased to whatever method/company they chose (for obvious reasons) but couldn't really give a good $$ argument either way, but what got me is a few people I spoke to that went with one of those "been around since hte 60's" companies, and tried to move their funds later, and it was awful. I just called up my bank, and they took some info and set up my daugther like another RRSP account, they have funds specially made for when you expect her to graduate, etc... pretty easy and stress free. (Royal Bank).
Good luck - You have to do what you are comfortable with.. I wasn't comfortable with the other guys, comfortable with my bank. If you have some older professionals at your workplace (sorry to stereotype, but the professionals seem more likely to invest in RESPs) ask them if they set one up for their kids, what they used and why... what do they like about it, what don't they like. I remember when I interviewed with one of those companies that specializes in RESP plans, after their spiel about how great they are, and how they are better than other companies, I asked them to tell me what the other companies would say is bad about them. She litterally fell back in her chair, never having to think about the negative aspects of her company.. she quietly told me about a few things that the other companies would point out as potentially being negatives... and I appreciated her honesty, but it was a real eye opener in terms of realizing how honest they wanted to be, vs how much they wanted to close the deal. She called back a week later and I told her we went with Royal bank... she said something like "Oh, thats too bad, I'm sorry to hear that, but I hope if works out for you..." No offense to Tim SJ, but they felt liek a car salesman... if you know what I mean.

Cowperson · 12-31-2007, 11:15 AM

Quote:

Originally Posted by zukes

Try the Canadian Scholarship Trust Fund. They have been around since the '60's. You can't lose with them, even if your kid does not go to post secondary, all you lose is the interest but still get every cent you put in.

Sorry Zukes, but that's not a good deal . . . . or at least, not comparable to what can happen with an RESP if the beneficiary doesn't use it, including the option to roll over income earned into your own RSP provided you have the contribution room.

An informal trust initially can be a good idea - perhaps even a good idea in terms of flexibility long term - but you'll be missing the government kicking in money for each of your contributions through to age 17 of the beneficiary.

An RESP is an attractive vehicle but, as one person noted, it's not a guarantee that your bright spark of a kid will actually go on to post-secondary.

The world still needs ditch diggers.

Cowperson

Finner · 12-31-2007, 02:09 PM

Open a discount brokerage account with one of the big banks, and buy some blue chips. Or if you aren't comfortable with stocks buy a couple of the safer mutual funds. Afterall this isn't a short term investment.

I know waterhouse yearly "maintenence" fees are only $25 / year if you have less then 25k. And the mutual funds are no transaction fees.

Don't open your RESP account with a bank though, only a brokerage. Not only are the rates on fixed income products WAY better but the mutual fund selection is 100 fold.

MoneyGuy · 12-31-2007, 02:27 PM

Quote:

Originally Posted by Cowperson

Sorry Zukes, but that's not a good deal . . . . or at least, not comparable to what can happen with an RESP if the beneficiary doesn't use it, including the option to roll over income earned into your own RSP provided you have the contribution room.

An informal trust initially can be a good idea - perhaps even a good idea in terms of flexibility long term - but you'll be missing the government kicking in money for each of your contributions through to age 17 of the beneficiary.

An RESP is an attractive vehicle but, as one person noted, it's not a guarantee that your bright spark of a kid will actually go on to post-secondary.

The world still needs ditch diggers.

Cowperson

Agreed. The Canadian Scholarship Trust Fund is exactly the kind of RESP that is to be avoided. Fees are very high, costs to get out can be thousands of dollars and the commissions are very generous to the salesperson. Set up a self directed account to hold equity mutual funds or blue-chip stocks. There are three financial products that are so bad that I don't think anyone (well, virtually no one) should buy. These pooled RESPs are one of them. You'd be way better off contacting Slava and having him set it up right for you.

Actually, if you think about it, the OP is asking the wrong question. Sorta like asking, "Which RRSP is best." Think about it.

Nufy · 12-31-2007, 04:52 PM

Well I wanted to initiate a discussion so I could form an opinion and then start my own research.

Mission accomplished.....................

Slava · 01-01-2008, 11:08 AM

Well I'm a little late to pile on here, but what the hell. Programs like the Canadian Scholarship drive me crazy! Sure you get your money back, but you get that with every RESP! There are a lot of accounts where there are no fees to be concerned with, where the grants and services are all looked after as well. Honestly it amazes me that these places remain solvent. The only thing you lose is the grant, and really that just makes sense.

If your son or daughter is not going to post-secondary then you can flip the money into your RRSP, so just leave a little room if that appears likely. You keep the growth and won't pay tax on the transaction, so its pretty safe.

Fact is that any financial advisor worth their salt is going to apply for all of the grants and make sure that you are in a solid program. You can invest whereever you like, and there are no fees to set-up an account or maintain the account. The point is to take advantage of the grants available and put some money away for the approaching high cost of education, not to make anybody else a millionaire to provide services that others provide for free!

MoneyGuy · 01-01-2008, 11:14 AM

There you have it. Avoid the pooled plans and call Slava.

But, Slave, no seg funds, 'kay.

Slava · 01-01-2008, 11:25 AM

Quote:

Originally Posted by MoneyGuy

There you have it. Avoid the pooled plans and call Slava.

But, Slave, no seg funds, 'kay.

Slave?! Hey we bought you guys!!

No, we don't advocate the seg funds....there are options but no real reason to!

moon · 01-01-2008, 01:32 PM

Quote:

Originally Posted by MoneyGuy

Agreed. The Canadian Scholarship Trust Fund is exactly the kind of RESP that is to be avoided. Fees are very high, costs to get out can be thousands of dollars and the commissions are very generous to the salesperson. Set up a self directed account to hold equity mutual funds or blue-chip stocks. There are three financial products that are so bad that I don't think anyone (well, virtually no one) should buy. These pooled RESPs are one of them. You'd be way better off contacting Slava and having him set it up right for you.

Actually, if you think about it, the OP is asking the wrong question. Sorta like asking, "Which RRSP is best." Think about it.

Whats wrong with a pooled RESP that doesn't have fees and in which you can transfer your money to RRSP if your kid doesn't go to school? That seems to be your big complaint about them. I don't know much about the financial business but wouldn't so perhaps there is more negatives here than those two but they seem to be the bug complaints you have about them. Also, wouldn't Slava take a fee from me as well? I know Vic is a good guy but I imagine he would want to get paid for any work he did.

Slava · 01-01-2008, 07:21 PM

Well there is compensation for me, but the fact is that there are fees where someone will deduct from the amount put in, or simply straight fees; and then there is compensation paid by the investment companies. These are not one and the same.

Arguably, if you can pay no fees out of your pocket and have the flexibility of your investment then this is the ideal situation? Why pay a fee when you don't have to?