Parenting & Family

RESP vs Other investment

  • Last Updated:
  • Aug 23rd, 2018 1:57 pm
[OP]
Sr. Member
Dec 27, 2005
526 posts
63 upvotes
Toronto, ON

RESP vs Other investment

Hello all,

Just wondering what your thoughts are Resp vs investment in other things like Real estate . Obviously , we will need to put out money if we go real estate. I have been thinking about investment in pre construction condo or something.

I understand they is CESG... I'm sure someone has thought about this before me !

Thanks
9 replies
Deal Expert
Aug 2, 2001
15091 posts
5358 upvotes
To me it is the grants that make a RESP the best investment (for the amount you get a grant for). You are not going to beat such a large and instant boost to your principle. The downsides are obviously if the money is not used for education you return the CESG and such. RESP also allows for small yearly contributions - something like real estate would require a large upfront contribution which most do not have, as well as potential ongoing costs. The tax implications of a rental property would also need to be handled.
Deal Expert
User avatar
Mar 18, 2005
17927 posts
1499 upvotes
Niagara Falls
Do you have another investment that is guaranteed 20% return every single year?

No?

Put the 2500 into the RESP and get your free money.
Member
Jun 10, 2013
400 posts
149 upvotes
Solution simple, open your RESP - invest in a REIT (real estate investment trust)
Newbie
Jul 2, 2016
16 posts
10 upvotes
Its 20% for the year the subscriber makes contribution, not compounded every year. For that one needs to invest in quality stocks/funds etc. It should be held in RESP. Once you exhaust the limit of 7.2k grant or 50k lifetime contribution limit, you are better off investing in other products. Thanks.
Deal Addict
User avatar
Dec 4, 2009
3875 posts
636 upvotes
Aurora
It's $2500/yr to get a 20% return, sheltered. Can't buy much of a condo for $2500...
"I'm a bit upset. I've been grab by the back without any alert and lubrification"
Lucky
Sr. Member
May 23, 2017
747 posts
236 upvotes
where can I open a resp? I have heard about people paying 9.9% service charges ect and losing money on it.
Got that Zoomer account!
Deal Addict
User avatar
Sep 19, 2005
2689 posts
1357 upvotes
Canadia
riseagainstthemachine wrote:
Aug 14th, 2018 9:50 am
where can I open a resp? I have heard about people paying 9.9% service charges ect and losing money on it.
Go to any of the major banks and purchase low cost mutual funds. The RESP companies that charge high fees are a completely unnecessary scam.
Deal Addict
User avatar
Dec 4, 2009
3875 posts
636 upvotes
Aurora
riseagainstthemachine wrote:
Aug 14th, 2018 9:50 am
where can I open a resp? I have heard about people paying 9.9% service charges ect and losing money on it.
Self directed RESP with a bank.

DO NOT go with a specialty RESP provider, unless you'd like to lose your money.
"I'm a bit upset. I've been grab by the back without any alert and lubrification"
Lucky
Deal Fanatic
User avatar
Jun 26, 2005
8754 posts
974 upvotes
Toronto
riseagainstthemachine wrote:
Aug 14th, 2018 9:50 am
where can I open a resp? I have heard about people paying 9.9% service charges ect and losing money on it.
Any banks or brokerage like Questrade

Buy quality USD stocks , they have time let it gain. Funds are too slow . They have time, take the risk

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