Total portfolio

For a while now, I’ve been writing a lot about my finance life. Lately, that’s the subject that’s been on my mind the most whether it’s relating to my savings, loans, budgets or spendings. Every time this topic comes up during a conversation, I try to squeeze in an advice to save. I tell my friends to save whenever they can. It doesn’t have to be a large amount at one time. It can be as little as five dollars a month. As long as they save, they’ll have something in the bank, it’ll be something that can slowly gain interest in a high interest earning savings account.

I’ve been depositing part of my pay into my Registered Retirement Savings Plan (RRSP). I started by depositing $25 a month and depositing it into my RRSP. I started up an automatic savings plan where the bank would automatically withdraw $25 from my chequing account. I was working at a job that paid minimum wage and twenty dollars a month was no big deal to me. I had no reason to start saving for my retirement at such a young age. No one gave me any information about it whatsoever. I only started one up because of the bank teller asked if I wanted one and I said yes on the spot. I’m glad that I started an RRSP at an early age because my savings are growing a lot more than I had anticipated.

My first RRSP was with Royal Bank of Canada (RBC). I was doing my banking one day and at the end of my visit, the teller asked if I would like to start up a retirement savings plan. My first thought was that I’m still young so why is she asking me to start saving for my retirement. Then I remember hearing about RRSP and how they’re locked away until you get to the age of sixty five. At the time, I was looking for a way to save money and this seemed like a good idea because I couldn’t touch that money or else I would be penalized. It was a sure fire way for me to save without touching a penny so I agreed.

After a few minutes of filling out some forms, I had an RRSP with an initial balance of $25. Every month, the bank would withdraw $25 from my account and I would think nothing of it. I hardly ever checked my pay stub so I assumed that whatever was being deposited into the bank was the amount that I earned for the month. So when the bank withdrew $25 at a time, I didn’t even see it. It was as if that $25 was part of my pay deduction.

After a year, RBC sent me a summary of my RRSP savings. When I looked at the total, I was surprised to a balance of over $300 saved up. At the time, it seemed like a lot to me and I liked the way things were going so I decided to continue to contribute to my RRSP. The following year, I was expecting an balance of $600 but I saw that there was more. I don’t what happened but there was an extra $400 in the account. I don’t think that rate of investment was that high so I might have contributed a bit more somewhere down the line. Nonetheless, I was happy with my savings.

The more I saved, the more I became interested as to how much I could save. Throughout the years, I continued to play around with my RRSP by increasing my deposits and changing my risk profile. Before, I was more conservative and I was very cautious as to how I spend my money. But now, I’m a bit more of a risk taker and I’m investing for the purpose of gaining higher growth.

Here’s a breakdown of what my investments are like as of the beginning of this month:

  Oct. 2007 Nov. 2007 Change
ING Direct $3,215.81 $3,276.15 +1.876%
Sun Life Financial $2,912.65 $3,115.58 +6.967%
Royal Bank of Canada $4,142.92 $4,220.91 +1.882%
  $10,271.38 $10,612.64 +3.322%

I’ve been investing since 1999 and this is where I’m at. I went from saving $25 a month to $150 a month. The ING RRSP was something that I started in January. I took out a $2000 loan and deposited all of that into an RRSP account. I earned $90 in interest in that account but I had to pay back $60 in interest to the loan. I didn’t care about the interest that I had to pay back since I was making $30 and increasing my tax return. The Sun Life RRSP is one that I started back in May and it has grown quite well. The company that I work for was kind enough to match 75% of my RRSP deposits and I’ve taking advantage of that.

I tell my friends all that the time that they should start up an RRSP. It’s a good way to save up and prepare for the future. My goal is to reach the $1,000,000 mark, retire and live off the interest.

4 thoughts on “Total portfolio

  1. Hi your return was very low, even less than a saving account. Am I right? Thus, it is much safer to deposit in a saving.

  2. Sun,

    Yes, my return does seem low. I’m not sure if it’s supposed to be like that but it goes up and down every month. Last quarter, I was averaging 8.6%. I’ve had one quarter where the ROI was in the negatives. As long as I’m gaining, I’m not too worried.

  3. Keep saving – it’s a good idea but watch for agressive funds, at the moment with the credit crunch in the US and banks posting losses RRSP returns could be negative on higher risk ones. Stock indices are pretty much maxed out now too.

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