Hello alphabet soup
I like to plan out my life and think about the future. This is not a secret. But I've never actually thought about the day that I'll be 60 or when I'm going to be retiring and needing money to support myself. I've always been like RRSP-what?? I've never thought that I really needed to worry about all that kind of stuff because I'm young and I'll worry about it when I'm older.However, living solely on my own now and paying increased rent along with more bills has made me realise I really need to budget. It's also made me more money-conscious and I'm starting to think about saving for the long term. Which is why tonight I attended a financial education workshop for women. Tonight is the first of 3 classes (which are free) wherein I'm learning about RRSPs, GICs, mutual funds, stocks, bonds, the new Tax Free Savings Account, along with a million other things. And at the end of it all, I'm going to be investing and building an RRSP and likely more.
AND, because I never realised how important this all was, I want to pass on the message to everyone to gain knowledge and then INVEST. It's so important!! I have to pass on the cases of Early Elaine and Late Larry, which were outlined tonight because I think this makes it so clear. Early Elaine invested $4000/year into her RRSP, starting at the age of 25. (And come on, $4000 a year? That's about $300/month, which is peanuts. Here is the motto of the evening: pay yourself first.) Okay, so this Early Elaine chick puts away $4000/year for 12 years until she's 36. Then she doesn't contribute another penny. By the time she's 71, she will have made over A MILLION DOLLARS after only contributing a total of $48,000.
On the other hand - if you suck and wait until you're 37 to do something about your future, like Late Larry who invests $4000/year starting when he's 37 - if he keeps investing that same $4000 every year until he's 71, he'll have only made around $700,000. Not even close! AND, he had to contribute a total of $140,000.
MY POINT IS: start contributing to an RRSP early! The younger you are, the better. Wow that turned into a giant rant and I hope I sound like I marginally know what I'm talking about.
INVEST!
Labels: money
posted by Maresa @ 12:49 AM
5 Comments:
Haha, its all true...on paper... but I started investing into my RRSP when I was 20. I put in $200 a month into it for two years, never once turning a profit... every quarterly report was a loss. I abandoned it as a lost cause when it was down to $2400... or 50% or what I had invested while I was still pumping money into it. It seems crazy to keep feeding it I know, but I was really young and foolish. I stopped paying into it when and it finally leveled off...almost. Then obviously in recent times its taken another beating... so now my $4800 is now around $1500. Don't think its just a license to print money... sometimes you can make a nice return, but if your bank mismanages your funds you would be better putting your cash under the bed in a sock!! I'm sure just as many people will chime in saying they have made as much on their investments as I have lost, but the game on the whole isn't generating money but simply moving it between investors. Hopefully, you are on the receiving end!!
Ah, for $300/month to seem like peanuts... If you subtract the plane fares, my "annual income" evens out to just about $300/month... Sigh. But your entry is encouraging. It is POSSIBLE to make money. And even to save it. Something for the future, when I'm old... ;)
Geoff - you need to find another investment company! Asap!
And Jenn - $300 a month isn't really peanuts to me right now either... I definitely live paycheque to paycheque. Although in the long run $300 really doesn't seem that bad, especially if you factor it in to your monthly budget as like another "bill".
long term investments like RRSPs are just that - long term! although you may lose over a few years (i did too - like probably everyone these days) you will GAIN over the next 40 years before you retire! :) the worst part is that being a millionaire for your retirement is totally not enough! but if you put enough in at the beginning and let it rest, you should be good to go! really happy that you've been inspired by the workshop so far mares!
Yep, that's absolutely true!! I am just going to let what's left sit for the long term... who knows hopefully it will amount to something nice when the dust settles!
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