https://padlet.com/rmtjoyxie/ijvey5c308500q1e by Ying Chao XIe en-us 2021-03-24 20:36:16 UTC 2021-03-30 01:31:52 UTC hello@padlet.com rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350057402 A lot of people believe that investment is for financial professionals, but it is actually part of everyone's daily life. Investment doesn't have to be predicting curves of the stock market. Actually, when you purchase a house, it is an investment; when transfer you money to your  Registered Retirement Savings Plans (RRSPs), it is also a form of investment.

In my padlet, I will compare two of most accessible forms of investment, RRSP and mortgage. I will try to explain what they are and which one we should choose. ]]> 2021-03-24 20:40:41 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350057402 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350380823 This short video is a RRSP 101. It is a basic yet comprehensive introduction of RRSP. It uses simple and clear language to explain how RRSP can save you on tax and generate income from interest. It also includes information on opening RRSP account, limit, contribution room, early withdrawal, penalty, and difference from TFSA. 
It covers all the aspects you should know before investing in RRSP. If you want to invest, you need to do further research of all the pros and cons. It lays out the simple facts of RRSP without bias. ]]> 2021-03-24 22:40:28 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350380823 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350416721 This is a tool provided by Sun Life Financial. It has taken consideration of the money available for investment, your income, your RRSP return, your mortgage interest rate. 
Even though it may be some biased on the analysis from Sun Life, it is still a good tool to quickly compare investment in RRSP and Mortgage. Just keep in mind that, Sun Life does provide products for RRSP investments, so you should do a bit more research before making your decision. For example, the calculation does not include the tax you will need to pay when you withdraw your RRSP. ]]> 2021-03-24 22:59:07 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350416721 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350446588 Now, you have a basic understanding of mortgage. Let's look at the components of mortgage payments: principals and interests.
Figuring out the amount of interest you pay plays an important role in your decision on investing in RRSP or mortgage. The calculation is a little bit complicated, but the videos provide us with the framework and concept. We will have more understanding of where our pennies go. ]]> 2021-03-24 23:14:48 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350446588 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350639661 Before putting your money in anything, it is always wise to understand what it is. Besides the basics of mortgage, this video contains information on interest rate, accelerated payments, and mortgage related fees such as mortgage insurance premium, appraisal fees, etc. 
To compare the the return of RRSP and mortgage, we have to look at expenses involved in each investment. This video not only brings up the potential fees or expenses but also gives out some very important tips on paying less for your mortgage. A lot of people do not realize that you almost always pay less interests when you choose variable interest rate. ]]> 2021-03-25 00:40:50 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1350639661 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1352529197 RRSP is not for everyone. RRSP is probably not for you if you will be in one of the four situations listed in this video: modest income, having a pension, leaving Canada, and already in high RRSP balance.
Government started the RRSP program encourage Canadians to save for their retirement. However, this is not for everyone. When we look the the incentives given by the government, we have to look at the cons of the program. We have to know our situation and consider how RRSP may work against us, and this video is a good reminder. ]]> 2021-03-25 12:44:43 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1352529197 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1353351111 1.What did you learn about your topic that surprised you the most?
I think the accelerated bi-weekly payment will save much more money than I thought. I did not really look into accelerated and unaccelerated payment, because I thought it would only save me very little money. I will do more research on it.
2. Provide a real-life example of how this topic is relevant or interesting for you.
I just renewed my mortgage agreement and I was discussing whether I should go for variable or fixed rate. Most of my friends get fixed rates, because it is predictable and they know exactly how much they need to pay. Also, the interest rate is very low now, so they want to secure the low interest rate.
After careful consideration, I still chose variable interest rate for my mortgage. First of all, I want to sell my property in the next few years, the penalty is much lower after third year into the contract. Moreover, as mentioned in Video#3, you always save more with a variable rate. The main reason is that your interest payment is always the highest because your principal is the highest at the beginning of your mortgage term. The interest payment proportion will decrease with time. Whether the interest rate is going up or down, you always take advantage of the lower rate when your principal is higher.
3. If you could pass on your knowledge to a family member or friend, what
do you think is the most important thing to pass on?
The most important thing I will pass on to my family or friend will be always do your research. Do not just follow others and hope you will get the same result. Everyone's situation is different. For example, RRSP works mostly for people with very high income now, but expect to have much lower income when retire. ]]> 2021-03-25 15:09:44 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1353351111 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1355830198 This calculator is provided by Financial Consumer Agency of Canada, Government of Canada. You can use it to calculate the monthly payment, interest you will pay over the term of mortgage and over your amortization period. If you click the "Summary Report", you will see how much interest and principal there are at each payment. This is very important, because the interest is reducing after each payment, which plays an important role in deciding whether to invest in RRSP or mortgage.
This is a reliable resource. Before you know which institute you are getting your mortgage from, you can have some rough ideas on how much interest you will be paying. You can also calculate how much money you will save on interest if you increase your prepayment by adjusting the number in the "prepayment amount" row. ]]> 2021-03-26 02:56:54 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1355830198 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1355863778 As we have already know from the previous videos. The main incentive to invest in RRSP is to save on taxes by deferring your tax in the high income years; then, you make a withdrawal at retirement when your income is expected to be lower. With the RRSP calculator generated by TurboTax, you will be able to calculate how much you can save on tax by entering your income and the amount you plan to contribute to RRSP. 
This is a great resource, because there is no better place to estimate your RRSP tax saving than the software which does your tax for you. It is also up to date. ]]> 2021-03-26 03:13:01 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1355863778 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1360442621 Once you put your money in your RRSP account, you don't just let it sit there. There are many RRSP investments you can choose from to increase the value of the savings. This article lists the qualified RRSP investments, such as bonds, mutual funds, GICs, etc. It also reminds you some of the non-qualified RRSP investments, which are not permitted to be held in an RRSP, such as precious metals other than gold and silver or Commodity futures contracts. Now, you have some ideas of what investment options are available, you can research further. 
When you search for RRSP investments, you will find many articles are biased. Most of them are either published or sponsored by the financial institutes marketing their products. This article is more objective by listing your options, so you can look further into the options you prefer. ]]> 2021-03-27 21:49:41 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1360442621 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1365746086 This image gives you a brief look of how you can save or profit from an RRSP account. It defers tax, holds different investments such as GICs and bonds. ]]> 2021-03-29 20:33:43 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1365746086 rmtjoyxie https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1365781948 By understanding the terms, we can also learn more about the costs such as interest rate, closing costs, etc. 
When choosing between RRSP and mortgage, it is basically calculating if the money you save or profit from RRSP is more than what you save from the costs of the mortgage. ]]> 2021-03-29 20:48:44 UTC https://padlet.com/rmtjoyxie/ijvey5c308500q1e/wish/1365781948