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Go Designer with your RRSP

Go Designer with your RRSP

Guest post by Desirée Dupuis.
Even though it may be cool to show up fashionably late to a party, when it comes to investing for your family’s future, it’s definitely much better to show up early. The RRSP deadline came and went in a flurry, but if you happened to have missed your opportunity to make a contribution for 2010, don’t fret—it’s perfect timing to get a jump-start on 2011.

Invest monthly

One of the best pieces of advice I give to my clients is to set up a monthly pre-authorized contribution (PAC) so that every month, no matter what happens, you’ve paid yourself first and have put money away for your family’s future.

The two benefits for your wallet of contributing monthly are:
1. You choose an amount that’s comfortable to stash away monthly so you are not stuck forking out a large amount in January and February when you are still paying off Christmas bills.
2. The money you stash away starts working for you right away, earning interest throughout the year.

Splurge on investing

If we compare investing in your RRSP monthly to the world of fashion and shopping, these are your options, and in this case, the more higher-end the better:
•    $50/month = clearance shopping
•    $100/month = Boxing Day sales shopping
•    $150/month = regular weekend sale shopping
•    $200/month = coupon and discount shopping
•    $300/month = shopping at the mall
•    $400/month = shopping at boutique stores
•    $500/month = designer shopping à la Jean-Paul Gaultier
•    $1000/month = haute couture shopping à la Givenchy

Investing is one area of your life where you should be excited to splurge! So go ahead, open a designer account and start putting away $500 a month— the more you put away monthly, the better quality your portfolio will be, and the better your family’s future will be.

Make your choices

Remember, an RRSP is not an investment per se, it is a tax shelter. You can choose what you want your money invested in inside of your RRSP. Whether it’s mutual funds, segregated funds, real estate or mortgage investments, stocks or bond, you choose.

Think of an RRSP like a closet: your closet is just an empty space, but it’s what you fill it up with that matters. You can treat your investment options above like shoes, purses, pants, shirts, skirts, and all of the items you buy to fill your closet. You need a nice mix of all of these items for a healthy and fun closet, just like you need a nice mix of investment options for a healthy and fun RRSP portfolio.

Desirée Dupuis is a Licensed Financial Advisor and partner of Three Sixty Financial Group. Desirée provides financial education to young families and empowers moms to make the best decision for their family’s financial future.

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