Parenting & Family

RESP vs Other investment

  • Last Updated:
  • Aug 15th, 2018 9:22 am
[OP]
Sr. Member
Dec 27, 2005
503 posts
57 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
8 replies
Deal Guru
Aug 2, 2001
14861 posts
5172 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
17657 posts
1381 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
398 posts
139 upvotes
Solution simple, open your RESP - invest in a REIT (real estate investment trust)
Newbie
Jul 2, 2016
11 posts
3 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
3753 posts
569 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
631 posts
174 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
2635 posts
1271 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
3753 posts
569 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

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