|When I was a teenager, I used to work in a dollar store. I remember that Halloween was a big thing and that the 31st of October was definitely a big day in term of business. However, as early as November 1st, while we were taking off the Halloween stuffs, old ladies were asking: “Sorry young men, could you tell me where I can find your Christmas goods?”. Xmas, is that really what you have on mind in early November? I now work in the banking industry, and people are never asking for RRSP’s in early November.
Every year is the same, I am always surprised to realize that people wait until February 28th to contribute to their RRSP plan. It seems that they are trying to avoid this moment as they would do it for a dentist appointment. Well I can tell you, there is no bad point of having a solid retirement plan! As the RRSP season approaches, I will write several articles on this subject. You will be able to follow my posts throughout my RRSP Category on the left side of this blog.
A great time to analyse your overall situation
Beyond the RRSP contribution, this is also a great time of the year to meet with your banker or your financial consultant. The year is almost is November is just the right time to look at your finance before you hear about your end of year bonus or you get in the Christmas Royal Rumble. If you wait until January, chances are that your credit cards will be maxed out and you could not find enough free money to contribution into your retirement plan. You should fix goals from year to year and analyse your overall financial situation at this time of the year. Let fix your little spending habit before Xmas starts so you can get going with your investment program. Do not forget, pay yourself first!
Know what you invest in
I know that several people just say that “they invest into a RRSP“. However, you must be aware what your financial consultant did with your money over the past years. Investing into your RRSP grants you a tax benefit. You must know that most investment products are eligible for a RRSP contribution. Therefore, your are not buying a RRSP, you are buying investment products within a RRSP portfolio. It is really important that you are aware of what lies in this portfolio. Discuss different products and strategies with your consultant. If he is not able to explain his actions throughout the year or if he offer the same solution years after years, you must take your money and run!
Establish your strategy
Depending on your age, your tolerance to risk and your ability to understand complex financial product, you should establish a good investment strategy that will go along with your situation. Saving money on taxes is one thing, but investing this money correctly is another. You should never decide to invest into a RRSP only in regards to the tax benefit. RRSP’s should be used as a part of a whole financial strategy. Do not leave this strategy in the hand of your financial consultant without questioning. It is primordial that you understand what he is doing with your money. For those who are building their own portfolio, the RRSP season is a great moment to balance your portfolio and adjust your investment strategy. You can always refer yourself to an advisor for specific questions or to a consultant for tax advices.
So tomorrow it is November 1st. Make sure to call your banker if you need a RRSP loan and to establish how much you should put into this RRSP this year. You will be happy to take care of this earlier than later once you will retire!!
Speaking of a scary thing, I just created the Primerica Series Category in my blog. You can read my four post on this “Primerica Business Opportunity” right here.
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