RRSP increase

Last Friday, I had a meeting with a Royal Bank associate to discuss my RRSP contribution. I had the times mixed up so I didn’t meet up with the person that I was scheduled to meet. Instead, I met with another associate and she helped me out with my RRSP. I didn’t have any plans on increasing my contribution but that’s what I ended up doing.

A customer service representative called me back in December to book an appointment with someone at RBC in January. The only day that I would be able to make it to the appointment was on a Friday. I schedule an appointment with a Mr. Albert Wong for 12:00pm. Or so I thought.

When I got to the Royal Bank in Jackson Square, I saw that there was an Asian girl at the reception. She had a lot of make up on and she looked like one of those toy dolls that closes their eyes when you lay them down. Not that I’ve ever played with one. I’ve just seen them around somewhere.

Usually there’s another lady with long wavy hair that works at the reception desk but she was away at the time. The Asian girl greeted me and asked if she could be of some assistants. I informed her that I had a 12:00pm appointment with Mr. Albert Wong. Somewhere in that last sentence the Asian girl heard, “Michelle.” That’s the name of the receptionist that works at the desk. I repeated back to her that I’m not looking for Michelle but Albert Wong.

Shortly after, Michelle arrived at the desk. I informed her about my 12:00pm with Mr. Wong. She told me that Albert went to lunch at 12:00pm. She asked for my client card to see if she could look me up on the computers.

After a few minutes of searching, she informed me that the appointment was for 11:00am. I don’t remember scheduling an appointment for 11:00pm because I wrote down 12:00pm on my PDA. Since the associate was on lunch, I thought I might as well go home. But then Michelle asked me if I was willing to see someone else. Since I was already at the bank, I agreed.

I met up with Christine, a tall attractive lady with dirty blond hair and a great smile. She seemed rather young to be working in her position. Either that or she’s close to my age. She was in the middle of clearing off her desk when I had arrived.

When we got into her office, it was a little awkward at first because neither of us knew the reason why I was there in the first place. I had booked an appointment but I wasn’t sure what the appointment was for. She had no clue what I was there for because she’s seeing me at the last minute. I informed her that the original meeting with Mr. Wong and it probably had something to do with my RRSP and we went from there.

Christine pulled up my account and checked out my portfolio. We talked a little bit about the types of risks involved in the current account that I held but the risks were rather moderate. Before this meeting I had no idea what exactly a Balanced Fund account was. From what she told me, it’s an account that has medium risk with a medium rate of return.

I asked Christine which she would rather recommend investing in, Bonds or Mutual Funds. I only asked because someone else had asked me a similar question but I didn’t know how to respond. Christine didn’t seem sure of what to respond either. She started to stuttering a bit and was sometimes lost for words. Maybe it had something to do with my surprisingly good looks and charm that cause her to be speechless. I had to help her out with a few terminologies. In the end, she recommended the Mutual Funds because it has a higher return.

Mutual Funds RRSP was exactly what I had invested in. My investments are divided and certain amounts were invested into different securities. Each of those options will have some return but not a lot. If I wanted a higher return on investment (ROI), I would have to make higher risks. That would mean that I have to start investing in equities. At the moment, my current portfolio doesn’t allow me to invest in equities.

Currently, I’m investing in RBC Balanced Funds. Its main objective is to provide a modest income and capital growth. In order to do so I’ll be investing in a balance of Canadian equities, foreign equities, bonds and short-term debt securities. When I met with Christine, this fund was giving me 8.1% ROI but as I’m typing this, that has increased to 10.2%. Of course, that number will fluctuate throughout the year but at the moment, it is on the plus side so that means that it’s gaining.

Once my portfolio builds up, I’m thinking of investing in the RBC Canadian Equity Fund. This fund will be a higher risk but according to its performance chart, it’s been doing pretty well. Year to date, the fund has a 16.5% ROI. If I choose to invest in this fund, about 93.9% of my portfolio will be invested in Canadian Equities, with 6.1% invested in cash. I’m not entirely sure what that means but it sounds good. Basically, I’ll be investing in major Canadian companies which will give me a more broad exposure to economic growth.

By the end of our meeting, I had increased my RRSP to $100 per month. I get paid on a weekly basis so that means $25 from every pay cheque will go into my RRSP. I also have my ING Direct RRSP that currently has a high balance. I’m planning on moving that into my RBC RRSP and hopefully use the investment to help me increase my ROI by investing in equities.

If you’re planning on starting up an investment, this is probably a good way to start. Investing in RRSP allows you to diversify your investments by investing in different securities. This will minimize your risk and give you a moderate return. The earlier you start, the better. Or you can invest in the Canadian Savings Bond but that won’t yield a high return. Savings bond will yield approximately 3.5% but so far Mutual Funds RRSP will yield 10.2%. Which would you rather choose?

4 thoughts on “RRSP increase

  1. I don’t know the difference between Mutual Funds and Savings Bonds though I do have some money in savings bonds. Maybe you and I should talk sometime Don. So you can educate me! lol But other than that, i think having a little bit of money saved in anywhere is good. I mean.. i’d hate to be one of those people who live from paycheque to paycheque…. or only having only $10 to their name :S

  2. Hehehe… I’m one of those people who has $10 to their names… 😛 right now, I have $4.75 in my chequing account… woot! woot!

    Dun wolly… I financial plan for you…

  3. YEAH RIGHT! $4.75? lol.. damn.. well you went to talk to them about RRSPs! Not about increasing your limit on credit cards… so i’m guessing that counts for something lol

  4. They tend to increase my credit limit without asking me. I think it’s their way of encouraging me to spend more. I can buy a lot with $4.75!

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