Armymedic
Good advice. I started my SRSP back in 1983 when I came back from overseas and started out small like you with a $100/month. With pay raises and promotions I took the money, even before I became accustomed to having it, and upped my monthly payments to $250. That more or less maxed me out, with usually only about $40 at the end of a fiscal year that I could put into my RSP. By having the Payroll deductions, I never even missed the money. It takes a while before it seems to do anything, but suddenly after about 15 years it will suddenly take off.
The best advice I ever got before joining was from a RSS Sgt. He advised me to buy a house on every posting, and in the end of my Service I would own a house. Many of us older guys remember those old SSMs, RSMs and Officers who lived in PMQs and had all kinds of big toys, who when they retired landed up working on Base as cleaners because they had to buy a house and couldn't afford it on their pensions. At first, being single, I enjoyed living in the shacks, but when I got married and then posted to Kingston, I was forced to buy a House as there were no PMQs free at that time. The best move I made. I sold that house for a bit of a profit, something you can't do if you rent, and bought in Petawawa. In Pet I was able to get my mortgage down to $5,000 and when my wife, who had got a job in Ottawa was loosing her apartment, all my suggestions that a mortgage was cheaper than rent paid off. We bought a house in Ottawa, and remortgaged the house in Pet. Now I have two mortgages, which keep my pockets kind of empty, but in a couple of months when I Retire and sell the house in Pet, I will be able to use all that cash to pay off the house in Ottawa. That advice from that Sgt paid off and I will own my house on Retirement.
When buying a house, I would advise you to take out a mortgage and make weekly payments. That way you actually cut down on the time it will take to pay off your mortgage, you will save in the range of $100,000, and you will know that every week you will be missing so much from your account. By paying weekly, or even bi-weekly, you are actually paying for 13 months in a year. That extra month really knocks down your mortgage. Another thing, if you have extra cash, make an Anniversary Payment and knock your mortgage down even more, as that is paid against the Principle and there is no Interest deducted. If you reallyhave extra cash, some banks allow you to pay more than what your mortgage paymen; ie: if your mortgage payment is $100/week, you may be able to up it to $105 and that extra $5 goes directly against the Principle, and it has no affect on what you can pay for an Anniversary Payment.
Stocks and Bonds. Canada Savings Bonds are a waste of time and money these days. If you want to get into that GICs are usually a good idea and most Banks can help you out there. When you have some "Fun Money", money that you can loose and not affect your finances, and you want to play with Stocks and Mutual Funds; shop around. I had some Fun Money years ago and went to a Broker, who sold out to Midland Walwyn and I was doing OK, but they were bought out by Merrill Lynch, who decided that they were not making enough money in Canada, and sold out to CIBC. Well, now, I am not a big investor and with the stock crashes, I have under $10,000 invested with them. CIBC has a management fee of just under $150 annual to manage the money you invested, don't forget buying and selling fees, on accounts under $10,000. They are recouping their fees by selling my stocks and lowering my account even more. Don't you just love the big Banks for Service Charging the "little guy" to death? I would advise that if you do want to start playing with Stocks etc. that you shop for an Independent Broker and only do so if the money you want to play with will not cause you financial grief down the road.
Independent Brokers are a good thing. They usually deal with more than one family of Funds, Stocks, etc.; where the Banks and large firms like Merrill Lynch sometimes do not deal with Stocks or Funds outside their "Family".
Independent Insurance Brokers are also good to find for Car and Home Insurance. They will shop around and find you the cheapest, or best Insurance for your needs.
I'll take a rest and let someone else give some good advice.
Gw
