Comments on: Reader Mail: Young and Just Starting Out http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm Building Wealth through Saving and Investing Fri, 19 Mar 2010 03:14:59 -0400 http://wordpress.org/?v=abc hourly 1 By: Cisco Kid http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-19884 Cisco Kid Thu, 13 Dec 2007 22:15:14 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-19884 I agree, by most standards (from surrounding peers) I’m ahead of the game. Though I’m way behind John as I’m just getting started at 30, just to find John looking around at such an early age is impressive to me. Keep up the good work, your on the right path to success, just don’t go overboard our you might miss your youth (and you can’t by that at any price) I agree, by most standards (from surrounding peers) I’m ahead of the game. Though I’m way behind John as I’m just getting started at 30, just to find John looking around at such an early age is impressive to me. Keep up the good work, your on the right path to success, just don’t go overboard our you might miss your youth (and you can’t by that at any price)

]]> By: credit card debt http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-6552 credit card debt Tue, 19 Jun 2007 07:04:15 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-6552 It's nice to see that young people are mature enough to think about investing in their future. When I was 19 I cared only about buying nice stuff. That was the shortest path to credit card debt. I'm still working to straighten out the financial mess I made as a college student. It’s nice to see that young people are mature enough to think about investing in their future. When I was 19 I cared only about buying nice stuff. That was the shortest path to credit card debt. I’m still working to straighten out the financial mess I made as a college student.

]]> By: High Interest Savings Accounts- competition is a good thing - Thicken My Wallet http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-5812 High Interest Savings Accounts- competition is a good thing - Thicken My Wallet Thu, 07 Jun 2007 11:41:36 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-5812 [...] I posted a comment on Million Dollar Journey yesterday that ING does not have the highest rates anymore in high interest savings accounts- guess this is changing rapidly. I also wonder if this is the beginning of another round of interest rate increases for other high interest savings accounts. As I wrote on Monday, RBC managed to secure $1.6 billion of deposits from outside its existing customer base in the first 90 days after it introduced its high interest savings account; so the field is becoming very competitive and financial institutions have to keep making their high interest savings accounts more attractive by increasing interest rates or getting creative with their incentives. With the Prime Rate most likely going up soon, the banks may have room to increase the interest rates on these accounts as well. You have to love competition when it benefits the general public like this! [...]

[...] I posted a comment on Million Dollar Journey yesterday that ING does not have the highest rates anymore in high interest savings accounts- guess this is changing rapidly. I also wonder if this is the beginning of another round of interest rate increases for other high interest savings accounts. As I wrote on Monday, RBC managed to secure $1.6 billion of deposits from outside its existing customer base in the first 90 days after it introduced its high interest savings account; so the field is becoming very competitive and financial institutions have to keep making their high interest savings accounts more attractive by increasing interest rates or getting creative with their incentives. With the Prime Rate most likely going up soon, the banks may have room to increase the interest rates on these accounts as well. You have to love competition when it benefits the general public like this! [...]

]]> By: Riscario Insider http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-5792 Riscario Insider Thu, 07 Jun 2007 04:08:53 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-5792 It's great to see young folk planning their financial futures. At the risk of being boring, what's wrong with earning interest in GICs or a savings account? That could be a good starting point. There's satisfaction in watching money grow steadily without stress or undue monitoring. John could allocate earnings between boring fixed interest and the more exciting choices described above. It’s great to see young folk planning their financial futures.

At the risk of being boring, what’s wrong with earning interest in GICs or a savings account? That could be a good starting point. There’s satisfaction in watching money grow steadily without stress or undue monitoring.

John could allocate earnings between boring fixed interest and the more exciting choices described above.

]]> By: Middle Class Millionaire http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-5759 Middle Class Millionaire Wed, 06 Jun 2007 15:32:41 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-5759 I have to agree with FB, I don’t’ think that starting an RRSP with so little income would be wise as he’d receive no tax advantages other than the compounded growth inside the RRSP. With so little income it would not matter what he invested in (even if it was all taxed at his marginal rate). It would be preferable if he could accumulate RRSP room which he could then use once he starts working full time. He could even transfer his invested amount from his unregistered account to his registered account once there is a tax advantage to do so. Cheers, MCM http://middleclassmillionaire.blogspot.com/ I have to agree with FB,

I don’t’ think that starting an RRSP with so little income would be wise as he’d receive no tax advantages other than the compounded growth inside the RRSP. With so little income it would not matter what he invested in (even if it was all taxed at his marginal rate). It would be preferable if he could accumulate RRSP room which he could then use once he starts working full time. He could even transfer his invested amount from his unregistered account to his registered account once there is a tax advantage to do so.

Cheers,
MCM
http://middleclassmillionaire.blogspot.com/

]]> By: ThickenMyWallet http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-5758 ThickenMyWallet Wed, 06 Jun 2007 14:41:28 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-5758 John may also want to explore options with respect to his bank account. ING is not the highest paying savings account anymore. I also agree with Financial Blogger- John's income falls under the basic personal amount credit (depending on which province you live in the first $9,000 can be earned tax free)- and he's in a stage in his life where he needs to have money around to meet his growing expenses. He should invest outside registered plans. With respect to what product to buy, John should do his research before he buys anything. He should understand what he is buying and why. There's a lot of product, he just needs to make sure he knows what he is getting himself into. Good luck John! Its nice to see someone young taking control of their financial future. John may also want to explore options with respect to his bank account. ING is not the highest paying savings account anymore.

I also agree with Financial Blogger- John’s income falls under the basic personal amount credit (depending on which province you live in the first $9,000 can be earned tax free)- and he’s in a stage in his life where he needs to have money around to meet his growing expenses. He should invest outside registered plans.

With respect to what product to buy, John should do his research before he buys anything. He should understand what he is buying and why. There’s a lot of product, he just needs to make sure he knows what he is getting himself into.

Good luck John! Its nice to see someone young taking control of their financial future.

]]> By: The Financial Blogger http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm/comment-page-1#comment-5753 The Financial Blogger Wed, 06 Jun 2007 11:46:52 +0000 http://www.milliondollarjourney.com/reader-mail-young-and-just-starting-out.htm#comment-5753 I would suggest John to go directly in the non-registered investments for 3 reasons. 1st, You won't benefit from tax return now as you would have to carry forward your RRSP contributions. 2nd, The investments in the RRSP are tax sheltered until you withdraw money from it. As your income is low, you won't be taxed for your growth. Non-registered is a better option. 3rd, As you are young and at school, you might encounter rough financial time. You can always cash in your investments if they are non-registered. That would just trigger capital gains which have minimal effect on your tax situation. However, if you withdraw from your RRSP, you won't be able to put this money back. As your RRSP room is limited, I consider you are better off with non-registered investment. Index funds are good because they offer a great potential at a low cost. I also like dividend funds as they are fairly stable and provide a good stability. Make sure to read all characteristics and be aware of all fees related to the mutual funds you are buying. Some of them have low MER's but high close end fees. A bit of reading won't hurt :-) Hope this helps! FB. I would suggest John to go directly in the non-registered investments for 3 reasons.
1st, You won’t benefit from tax return now as you would have to carry forward your RRSP contributions.
2nd, The investments in the RRSP are tax sheltered until you withdraw money from it. As your income is low, you won’t be taxed for your growth. Non-registered is a better option.
3rd, As you are young and at school, you might encounter rough financial time. You can always cash in your investments if they are non-registered. That would just trigger capital gains which have minimal effect on your tax situation. However, if you withdraw from your RRSP, you won’t be able to put this money back. As your RRSP room is limited, I consider you are better off with non-registered investment.

Index funds are good because they offer a great potential at a low cost. I also like dividend funds as they are fairly stable and provide a good stability. Make sure to read all characteristics and be aware of all fees related to the mutual funds you are buying. Some of them have low MER’s but high close end fees. A bit of reading won’t hurt :-)

Hope this helps!
FB.

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