I did my RRSP and TFSA Now What?

in RRSP, TFSA

Seriously, I have friends ask me that exact question, with little or no context to explain much else. What do they mean by this? I thought maybe you knew, because I usually answer with my fatherly response of, “Well that’s good, you should be proud”. The question, “How do I a DO an RRSP?” or “How do I DO a TFSA?” appears in my inbox many times, and I am really not sure how to answer, without sounding rude or nasty (I do specialize in that, I know).

The way that RRSPs and TFSAs are marketed these days you almost want to stand outside a bank branch with some kind of brochure pointing

The Circle of Savings in Canada

The Circle of Savings in Canada

out that you can actually do more than put money into a TFSA “Savings Account” (which is a bank account inside of a TFSA vehicle) or buy the Bank’s own High MER Mutual Funds for your RRSP, but I suppose I should be celebrating the fact that folks are at least trying to save? Nah, I think I’d rather stand outside a bank with a Sandwich Sign saying:

The End is Near and it has an MER of 3.2%!

and on the back

1.2% Interest on a TFSA Savings Account is not a good thing!

A little drastic, and given how cold it is in Canada in February maybe not very good for my health, but the number of folks I know paying these fees is quite alarming (to me).

I think my concern is that people seem to spend more time daydreaming about what car they want to buy, some day, yet they will walk into a bank, hand a stranger $2000 and say, “Do something with it!”, and the bank person will gladly  take it and put it in whatever makes them enough money (maybe not, but that is my vision of what happens).

 

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{ 4 comments }

{ 4 comments… add one }
  • Kanwal Sarai @ Simply Investing February 4, 2014, 6:16 PM

    Not just cars, most people spend more time researching which vacation, motorcycle, LCD TV, laptop, or smartphone to buy than any time to figure out how to invest. I’ve been saying this for years now “Learning how to invest should be taught in schoolh”!

    Reply
    • bigcajunman February 4, 2014, 6:17 PM

      Agreed, but I also think they should have more Auto Shop, Woodwork/Carpentry and Industrial Arts courses as well.

      Reply
  • Matt February 4, 2014, 1:53 PM

    I might not get the volume of emails that you do with questions like that but its frustrating seeing things like that. Most people have no clue what to do with money let alone investments. I’ve learned a lot in the course of my life (most of it through the school of hard knocks) and the one thing that I think most people could benefit from a financial literacy course or training. All too often its just easier to take the ignorant route out.

    Reply
    • bigcajunman February 4, 2014, 3:02 PM

      AMEN Brother! Unfortunately you are preaching to the choir here, we need to work on that Financial Literacy quotient in Canada.

      Reply

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