Maxing Out That Resp – 2019 Finished

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!

Rob

Hey I’m Rob, creator of Passive Canadian Income.

In 2011 me and my wife had almost $60,000 in debt and a negative $7,000 Net Worth. Through hard work and financial education we paid all that off. Now we are focusing on increasing our Passive Income Streams to make the money work for us. Feel Free to Follow along the Journey by clicking the Social Media links below or subscribing to get notified of new posts on the sidebar.