Becoming an Expert in the Stock Market
If you want to become an expert in the stock market, you should consider important factors. You have to obtain sufficient knowledge in stock investing as well as other crucial points involved in the stock market. This does not necessarily mean you have to take formal education in order to enter the world of stocks. Obtaining sufficient knowledge involves the fundamentals of investing or trading in the stock market, learning the ins and outs of the market, and employing the right strategies to make money and minimize risks. You should learn how to keep your investments protected. Say, if you are buying stocks, you could opt to buy a varied number of shares from various companies and industries that offer diverse products and services. You could protect your investments through this method since you have a balanced portfolio and the opportunity to play up with the rise and fall of the stock market trends.
You could opt to invest in mutual funds in order to buy stocks from different companies and industries. Mutual funds are different for each sector although some mutual funds are included in several sectors such as pharmacy, energy, real estate, and health. You coulds also use a currency trading platform to do forex. It is important that you know the reason why you are investing in the sector. This is to say that you should discern if you are investing for a short or long period.
Finally, if you have expenses that you are not obtaining any worth from, you could discard them and turn aside the funds into investment. Say, if you have credit cards with high interest, you could pay them off entirely in order to save the funds for your investment. You could also establish automatic deduction to your investment account from your checking account in order to obtain a fixed amount, which is move to your investment for buying stocks. This would save you time and effort as you buying of stocks is done automatically.
Filed under Stock Market | Comment (0)Registered Education Savings Plans
While your saving for yourself to retire early its important that you don’t forget about the future costs you will incur to send your children to university. Canadian investors can open up a registered educations savings plan (RESP) to help them pay for this rather large burden. To open a registered education savings plan account you simply need to apply for a social insurance number for the child and then choose an RESP provider. Most banks and brokerage firms offer RESP accounts. Why is it important that you open a RESP account instead of just a regular savings or brokerage account? Because when you make contriubtions to a RESP not only does your investment grow tax free but the Government of Canada will make contributions to your plan as well through savings incentives.
The savings incentives are called Canada Education Savings Grants (CESG) and Canada Learning Bonds (CLB). The maximum amount that can be contributed to an RESP per child is $50,000 with no annual maximum but the Government of Canada will only apply CESG credits to the first $2500 contributed per year, each child is eligible for these credits up to the age of 17 although special rules apply between age 15 and 17. If you contriubte $2500 per year the CESG credit you will receive will be $500. The Canada Learning Bond credit is available to modest income famalies and depends on your income. For more information on both CESG credits and CLB credits you can visit the Government of Canada website at http://www.canlearn.ca/eng/saving/resp/index.shtml.
Once your child enrolls in university withdrawals can be made from the amount with proof of enrollemnt. You may withdraw $5000 in the first 13 weeks and any amount after that. Any income earned in the account will be taxed in the childs hands which since the child is in university should amount to little or no income tax being payed depending on the childs income. Contribution amounts are of course withdrawn with no tax implications.
If your child decides not to attend university, the CESG credits can be used for a siblings education or must be returned to the Governemnt of Canada. Any income or contriubtions in the account can also be used for a siblings education or contributions can be withdrawn tax free and up to $50,000 of income can be transferred to your own RRSP account without tax implications.
The savings in this account can grow quite dramatically, if you were to contribute $2500 per year from the time the child is born up to age 17, you would also receive $500 per year in CESG credits. This amount would grow to a staggering $85,485.03 by the time your child is ready to attend university, assuming you were making a 6% return. If you were to contriubte a yearly amount with the goal of maxing out the lifetime limit of $50,000 per child in contriubtions this amount would grow to $102,910.63. As you can see the results speak for themselves! So while your saving to retire early don’t forget to save for your childrens education as well!
Filed under RESP | Comment (0)Pay off your mortgage faster and achieve your dream of early retirement…
How can you pay of your mortgage years faster and save thousands in interest costs over the life of your mortgage? Simple if you switch your monthly mortgage payment to a bi-weekly or weekly rapid payment schedule!
Bi-weekly and weekly rapid payment options have been growing dramatically in popularity in Canada and many institutions now offer this option. The reason this ends up reducing your amortization and interest costs so dramatically is the way the payment is calculated. You take the monthly payment and divide it by four (weekly) or two (bi-weekly. By doing this you end up reducing your mortgage principal each year by the amount of the monthly payment.
For example, if your monthly mortgage payment was $800.00 you would make a total yearly payment of $9,600 ($800 x 12). By dividing this by 4 you would have a weekly payment of $200 and thus pay a total yearly amount of $10,400 ($200 x 52). Or if you were paying bi-weekly you would pay $400 and again pay a yearly total amount of $10,400. This would result in an additional $800 being applied to your mortgage each year, which would directly reduce the principal. By taking advantage of an accelerated payment plan you could reduce a 25-year mortgage to 21 years. That’s four years of mortgage payments saved. Since your mortgage payments are made with “after tax” dollars this is a huge savings!
Below is an illustration of a mortgage of $300,000 over a 25-year amortization period at 5.0%:
| Payment Frequency | Amount | AmortizationYears | Total Interest
Paid |
Savings vs.
Monthly Payment |
| Monthly | $1,744.82 | 25.0 | $223,332 | $0 |
| Bi-Weekly | $805.30 | 25.1 | $222,604 | $728 |
| Weekly | $402.65 | 25.1 | $222,350 | $982 |
| Bi-Weekly Rapid | $872.41 | 21.4 | $185,889 | $37,443 |
| Weekly Rapid | $436.21 | 21.4 | $185,477 | $37,855 |
You can see from this illustration how dramatic your savings will be! Savings that can help you achieve your goal to retire early!
Filed under Mortgages | Comment (0)