RESP targets

[suntan]

VDY does better @ 0.22% MER.

[ganesh]

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What story is that?

A 2% fee for a dividend fund is highway robbery, you would probably be better off with cash interest.

I have no problem paying the 2 + MER when the return more than decent.
I see your point. That is why I was asking what kind of funds people are putting their money on when it comes to RESP

[ganesh]

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VDY does better @ 0.22% MER.

Thanks for this. Will look into this

[msommers]

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What story is that?

A 2% fee for a dividend fund is highway robbery, you would probably be better off with cash interest.

Considering a Wealthsimple cash account is at minimum 4% with no fee, I'd agree.

[asp integra]

If you are contributing 208/month (total of $42,432 contributed lifetime) a 2% mutual fund fee will end up being over $11,000 in fees over the life of the RESP

[ganesh]

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If you are contributing 208/month (total of $42,432 contributed lifetime) a 2% mutual fund fee will end up being over $11,000 in fees over the life of the RESP

We put in 150/bi-weekly.
Thanks for sharing this. This definitely opens my eye. I need to look at other options.

[ganesh]

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If you are contributing 208/month (total of $42,432 contributed lifetime) a 2% mutual fund fee will end up being over $11,000 in fees over the life of the RESP

Btw, where did you get this information from ?

[max_boost]

It’s just Marth but yes fees fees fees lol

[killramos]

Yea it’s just math, td is taking 2% off the top to get you the same return as a fund with a tenth the mgmt fee

[ganesh]

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Yea it’s just math, td is taking 2% off the top to get you the same return as a fund with a tenth the mgmt fee

I get this. What I was asking is the number asp intergra posted.
Different places show different numbers. Obliviously Some of them are putting the gain as 0 and others have a bigger gain to paint different picture

[pheoxs]

It really depends how long and what market rate you think you'll get.

Assuming 18 years
$200/month @ 5% is 69.8k (43.2k your contribution + 26.6k interest)
$200/month @ 7% is 86.1k (43.2k your contribution + 42.9k interest)

Losing 2% is quite significant. 14k in this case.

[killramos]

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I get this. What I was asking is the number asp intergra posted.
Different places show different numbers. Obliviously Some of them are putting the gain as 0 and others have a bigger gain to paint different picture

Gain? You mean like investment returns?

No one knows what future returns will be so there isn’t much point in comparing them, the real point to focus on is that TD is not getting you a better return on a broad market fund like that than literally anyone else.

Mutual funds exist to gouge clients and enrich salesman/fund managers. Full stop.

Even TD will sell you an ETF that will generate similar returns for a management fee a small fraction of what that fund is costing you.

to:dr Mutual Funds are a scam to prey on the financially illiterate. Don’t buy them.

[Mostwanted]

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Sell everything.

Buy CBIL.

Not joking.

Why CBIL? Looks like it has no growth staying within $49-50.25 per share with a 5% dividend. Isnt that the same thing as CASH.TO or am i missing something?

[Darkane]

My lord. Just checked my TD resp - still somewhat early enough to avoid major loss, but it’s insane.

2.23 - thanks for the awareness, folks.

[suntan]

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Why CBIL? Looks like it has no growth staying within $49-50.25 per share with a 5% dividend. Isnt that the same thing as CASH.TO or am i missing something?

Either is fine. CBIL invests in t-bills which I suppose is "safer" than CASH.

OSFI decision may impact CASH's distribution however.

[asp integra]

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Btw, where did you get this information from ?

Last year I ended my 'semi retirement' and started up a new career, I sell RESP's with a company called CST Savings. One of our main selling points is 1/4 the fees VS a typical bank RESP that invests in mutual funds. That 2% number is fairly standard for mutual funds and ends up costing around $11,500 in fees when it matures at 17 years.

[Masked Bandit]

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Max it out. Worst case scenario is you don't need any of the money (none of your 11 kids go to school), you've filled the RESP accounts including all the grant money and I think (you may want to double check) that if there's money left over, the portion that was your contribution plus any investment gains on your money just come back to you like a normal taxable account. The grant money and gains get donated to a post secondary institution of your choice. I'm like 51% confident on that but I think that's what the bank lady told me way back in the day.

Moderately interesting to follow up on my own comments from 3+ years ago. Theory has been put into practice and it's working out quite well. I've paid for the first four semesters of tuition & books for my oldest and to date, my total balance on the RESP investment account is the same (possibly a touch higher) than when I started. At the beginning of each semester I've cashed out enough to cover the costs for that period and before the next one hits, the investment gains have replenished the fund. Between the grant money and the investment gains which are taxable to my kid, who pays basically nothing anyway...free university??? When #2 comes along I'm sure I'll start seeing a draw-down on the total balance, but there's enough grants & gains in there that I'm pretty sure I'm going to get 100% of my original capital plus a bunch of investment gains back. I guess this is how it's SUPPOSED to work, right?

[brucebanner]

Nice! Hope I'm so lucky to have that same experience way down the road

[asp integra]

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Moderately interesting to follow up on my own comments from 3+ years ago. Theory has been put into practice and it's working out quite well. I've paid for the first four semesters of tuition & books for my oldest and to date, my total balance on the RESP investment account is the same (possibly a touch higher) than when I started. At the beginning of each semester I've cashed out enough to cover the costs for that period and before the next one hits, the investment gains have replenished the fund. Between the grant money and the investment gains which are taxable to my kid, who pays basically nothing anyway...free university??? When #2 comes along I'm sure I'll start seeing a draw-down on the total balance, but there's enough grants & gains in there that I'm pretty sure I'm going to get 100% of my original capital plus a bunch of investment gains back. I guess this is how it's SUPPOSED to work, right?

That's how it's supposed to work. What I tell people is that if you take a portion of your CCB payment and put it toward your child's RESP monthly, then add the gov't grants, essentially you end up with the government paying for and filling up the entire RESP with no out of pocket to you. Nothing wrong with having a $60,000-$80,000 RESP for your child come post secondary time funded entirely by the government.

[03ozwhip]

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Last year I ended my 'semi retirement' and started up a new career, I sell RESP's with a company called CST Savings. One of our main selling points is 1/4 the fees VS a typical bank RESP that invests in mutual funds. That 2% number is fairly standard for mutual funds and ends up costing around $11,500 in fees when it matures at 17 years.

I'd like to talk to you further about this @asp integra