Maxing Out That Resp – 2019 Finished

Maxing Out That Resp

Maxing Out That Resp – 2019 Finished

Hey hey hey

Word on the street is that we just maxed out that resp this year. Well its not really the word, but yeah we did.

Another year is almost passed and we took this one down to the wire, but alas another $5,000 has been deposited and the government tossed us a cool thousand for it. You gotta love it. Free money and setting up our kids for the future. It’s those little parenting wins, where you tap each other on the bum and say Good Job!

In case you didn’t know we have 2 kids. Our son is 6 and our daughter is almost 2. Time fly’s. The resp is setup for saving money for your kids schooling after high school. $2,500 a year per kid and the government will match you 20%.

If your from Canada eh, I’m sure you have heard of it. If you got some young bucks of your own I urge you to start funding their future. Yes there’s some people who say they wont fund their kids schooling, their parent’s didn’t fund theirs, I don’t want to spoon feed them… Blah blah blah Your getting 20% of your investment right off the bat for your kids. If you have a financial means to do it, you should.




Our Account

We have maxed out this account since our boy was born and turned it into a family resp once our daughter graced us with her presence. In total we have contributed $20,000 over the past 6 years.

  • 4 years (son) 2,500 a year
  • 2 years (son and daughter) 5,000 a year

The government has gave us 4k in that time. Currently their account has over $29,000 for their future needs. My kids wont be touching this for 12 – 16 years. I can only imagine what that amount will be when they actually need it. The power of compounding will surely work its magic.

I’ll add one more point and then stop talking about the resp account. If you are in some type of resp account please please check out the costs involved! There are companies out there who pray on new parents. I remember shortly after having our son some company cold called the wife and she setup a appointment with them. (How did they get her number? Must be setup with birth registry or something) I rejected them because of their high fees. Eventually we settled on a rbc 2030 education fund, but after seeing their fees and lack of performance vs our personal account I decided transfer to a self managed resp and eliminate the fees.

So What Did You Buy?

427 words and the guy still didn’t even say what he bought? The account has been as boring as it can get. Other than our first purchase in 2019, (IPL) the other 4 – (including this) have all been Bell Canada. (BCE)

I had a goal this year. Work on this position and dollar cost average, basically before every ex dividend date Bell has.

This was no exception. With Bell’s ex dividend date on December 12th it was time to put this money to work, finalizing the 2019 contribution limit to boot.

On December 10th we added 22 more shares of Bell at a cost of $64.60 per share. 

Was it a steal? Hell No. In our last monthly passive income update I mentioned I will probably buy bce this month. A reader questioned me about it why would I buy it at that price? Should I not wait for a lower price first?

Everyone is different. Some like having cash hoards, others wait for their buy targets, people may just buy the cheapest dividend stocks at the current time and some just stick to their plan in their head. I’m a mix of the bunch, well other than the cash hoard. I want that cash working for me asap!

As I mentioned earlier, I just stuck with my plan to buy them before the ex dividend date this time.

Why BCE?

I wanted a position in bce for their stability and decent dividend growth. While these Canadian telco’s don’t technically have a wide moat, they basically do. Bell has also been around everywhere here installing their fibre optic lines setting them up for future growth.

Our bell position is now at 86 shares which enables the drip function. The simplest form of investing for the long term, set it and forget it. We will now bring in $68.15 a quarter, so if the price stays under there, we’re golden.




Conclusion

Well there ya have it, our newest purchase and a goal of maxing out that resp is done once again. It’s 10.15 pm and the wife just went to bed. Time to give her that pat on the bum and say nice Job! haha….

This purchase adds $69.74 to our forward income, I’ll update the portfolio another day.

What do you think yay or nah? Buying any stocks these days?

Cheers!

6 Responses

  1. Great job on maxing out the RESP! Wow 29k and with another 10+ years to go, your kids will having an amazing start for their post secondary education 🙂

  2. Connie says:

    Thanks for the post! My kids RESP is setup at Sun Life and I’m going to transfer it to a self directed one. I just think I can do better! I was thinking of going with one of Vanguard’s all in one ETFs, but now maybe I’ll consider buying stocks instead (or a mix).

    • Rob says:

      hey Connie

      Sounds like a good idea. As always I’m not a financial advisor, so do your own research. I think etfs are a great idea and one I considered and am considering for my overall portfolio.

      Id definitely look at the returns and costs sun life got vs a etf and that may be a good start.
      All the best Connie!

  3. German says:

    Great job maxing out the RESP account. Nice pick up of bce, now you can fully drip. We are with CST for the RESP plan. We signed up for it in 2009, before I started investing. We make a cut, the government makes a cut, and the fund makes some returns. In the end we should have about 40 grand to fund our kids education. Luckily in Canada the education is affordable. Many colleges are free and Universities cost around 10K per year, depending on the program, and other factors. I also assume that my kids will have some type of part-time jobs to fund some cost of education or maybe just the books. A ob is always good in early age to better understand and value the money. Anyway, good luck with Bell position!
    German recently posted…Portfolio Value Update – November 2019My Profile

    • Rob says:

      hey German

      thanks man. Your right schooling here is a lot cheaper than the U.s. but it is rising…. I agree I would want the kids to at least work pt to cover some kind of costs. Ramsey always states that there is proof kids do better in post elementary working at the time than not.

      cheers man

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