Before you buy RESP from Private Companies, Read this.
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Quote:
Originally posted by Confused_Canadian
4 If you do everything right your cumulative gain will not be more than 3 to 4%, including the grants, growth etc.
5.so why to take this headache, make an extra payment in your mortgage, live well, debt free.
Can you elaborate? Why would your cumulative gain only be 3% to 4%? Assuming your money (both contribution and grant) is invested in a fund and assuming it does well, your gains should be significantly higher, especially with compounding over time. The 20% grant with the cap on its own should make the rate of return much higher.
What am I missing here?
I see significant benefits to investing in a RESP aside from the grant itself. Nicely summarized here at a high level.
https://www.cibc.com/ca/education/benefits-of-an-resp.html
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Are you there?
Quote:
Originally posted by Confused_Canadian
6. Other than RESP i have a Universal life Insurance plan, I don't know why, all these agents promise one thing, and deliver nothing, you are left to fend for yourselves so any investment be very careful.
What kind of problems you are talking about Universal Life Insurance plan ???
I did one before 2 years & paying premiums yearly. I had a nice breakdown of all the cost & benefits(cash value after 20 years) from the company by year to year basis.
Do please write about it so I can access if I have missed any points...
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i..........rock........!!!!!
i am completely agree with "confused canadian"
regardless of different name with different charges...
here i am explaining what happens in general with private company and what will you face after 17 years..when you time to get money....
***** yes blueLobster..i am agree there is lot benefits of RESP ..but with bank..
Your link is with CIBC BANK.... not private company...
-from beginning i mention ..GO WITH BANK..YOU WILL NEVER GO WRONG......
The presentation looks impressive.I did not go thru it though, simply fed up with the illusionary things. With banks you may make more if you simply keep in gics
However private firms this is the case.
1. They invest in Government, provincial,muncipal, corporate bonds which carries an interest rate 2-4 %.
2. They then charge you enrollment fee of 10-12%., may be more,
3.Then again there are other charges here and there
4. I present to you my latest statement you make a calculation, I have simply given up.
5. From birth to now i.e 10 years 170 per month without missing a single payment . total payment 20400. total value as of today including growth , grant etc . 22200.
Quote:
Originally posted by BlueLobster
Quote:
Originally posted by Confused_Canadian
4 If you do everything right your cumulative gain will not be more than 3 to 4%, including the grants, growth etc.
5.so why to take this headache, make an extra payment in your mortgage, live well, debt free.
Can you elaborate? Why would your cumulative gain only be 3% to 4%? Assuming your money (both contribution and grant) is invested in a fund and assuming it does well, your gains should be significantly higher, especially with compounding over time. The 20% grant with the cap on its own should make the rate of return much higher.
What am I missing here?
I see significant benefits to investing in a RESP aside from the grant itself. Nicely summarized here at a high level.
https://www.cibc.com/ca/education/benefits-of-an-resp.html
Location: Western Hemisphere
Posted on: 16-03-15 18:12:17
Quote:
Originally posted by Confused_Canadian
The presentation looks impressive.I did not go thru it though, simply fed up with the illusionary things. With banks you may make more if you simply keep in gics
However private firms this is the case.
1. They invest in Government, provincial,muncipal, corporate bonds which carries an interest rate 2-4 %.
There's the first problem - investing in bonds and only in bonds. No diversification, all risk and no gain (although bonds carry minimal risks).
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Dimple2001
Location: Western Hemisphere
Posted on: 16-03-15 18:31:29
It appears to me that certain companies are taking good advantage of less-informed people.
First of all, was there disclosure of this enrollment fee and other admin fee? If there was, before signing, didn't those numbers and the contractual obligation feel awfully ridiculous? Lack of disclosure is anywhere from illegal to unethical. If there was disclosure, you voluntarily signed up (at least in the eyes of the law).
Second, it pays to learn the basics of investing if you are to stay ahead of these sweet-talking scammers. Investing in GIC, money-market or bonds will have negligible growth, albeit at negligible risk. When the fees are added, you will lose money. Your investment needs to be diversified from bonds to equity in order to counter risks and gains and benefit from the effect of compounding. Regardless, the fees are outright ridiculous.
Third, why did it take 9 years to realize something was not right? Were you asked to pony up a bulk amount for admin or you just realized that you were being taken advantage of all these years?
Banks may have tighter requirements, but you still have to be a little bit knowledgeable. Banks can also tell you to invest in bonds and you'll still get only a very low return (although the fee may not eat up on the returns).
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Dimple2001
Most of the time new immigrants fall for this.the key problem is projection, there is big gap in projection and actual returns.This is a day light robbery, how can the authorities allow this in a country likeCanada. It's ok to charge provided the returns justify that.
I have learnt a great deal after this and other investments gone sour.When they are investing in bonds why are they charging so much fees. Did they project with bond rate ?.There are so many complaints that can be seen now in internet.But 10 years ago so much information was not available in internet.
