All parents want to give their children a promising future. A good education is key to achieving that goal. However, the cost of education keeps rising. Finding ways to invest in your child’s education can be difficult, so you must start thinking of how to save for your child’s education early. Here are ways to invest in your child’s education:

1. RESPs

Registered Education Savings Plans (RESPs) are a popular way for parents to save for their child’s post-secondary education in Canada. With an RESP, you can contribute per child. The contributions are tax-free while in plan, and the government also contributes 20% on the first $2,500 contributed annually, up to $500 per year and a lifetime of $7,200  into an RESP under the Canada Education Savings Grant (CESG).

RESPs are better than most saving options because they offer grants and the income earned adds value over time. However, there are limitations. For instance, the money in an RESP can only be used for educational purposes. There are penalties for withdrawing money from RESP for non-educational purposes. CST Savings can guide you from the first contribution to graduation. You can check out CST savings reviews to find out more about the plan options available. The money in the RESP can be used to pay for tuition, textbooks, and other educational expenses associated with a post-secondary education.

2. Mutual Funds

Mutual funds are another popular way to save for your child’s education. A mutual fund is a pool of money managed by a professional investment manager. The manager can invest the money in stocks, bonds, and other securities.

You can invest in mutual funds for your child’s education through a TFSA or a non-registered plan. A TFSA allows you to invest up to $6,000 annually. The contributions are tax-free. Income from the investment is also tax-free. A non-registered plan is tax-free. You can invest any amount you want in a non-registered option.

Mutual funds are great for saving for your child’s education. They offer the potential for high returns. However, they also pose a few risks. The investment value fluctuates depending on the assets’ performance.

3. Savings Plans

Savings plans can help you prepare for your child’s education. You can open one and deposit money regularly. The percentage earned on the savings is added to the principal. It increases the overall value of the investment. Savings are low-risk because the principal is guaranteed. However, the amount earned is generally low. This means the returns on the investment may not keep up with the rising cost of education.

4. Real Estate

Real estate investments can help with your child’s education. You can buy a rental property and channel the income to education. You can also buy a property and sell it when the value has increased. Real estate is a lucrative way to save for your child’s education. However, it can be risky. The value of the property fluctuates. There are maintenance costs associated with owning a property.

When investing in your child’s education, start early and be consistent. The earlier you start saving, the more time your money has to grow. Consistency ensures that you reach your savings goals.

Consider your long-term financial goals when choosing an investment option. For instance, if you plan to retire in the near future, don’t invest in a rental property. It requires ongoing management and maintenance, which can be tiring. Seek professional opinion when unsure of your best option.

BY KEISHA BAILEY

Life happens.

I get it.

It’s hard enough to make the bill payments each month, much less to think about the future and trying to make things financially better. Frustration easily sets in because you want to feel more secure about your finances, but at the same time you simply don’t have enough money to invest. I believe that money is possible for everyone and with a few simple steps you can start freeing up cash to be able to invest in your future wealthy self.

If you feel like you never have enough money to invest, realize that the change starts within you. The change begins when you change how you look at money. Once you understand that money is a tool, much like a hammer is used to drive in nails, money is used to achieve the financial goals that you have for yourself.

So how exactly do you unlock the true potential of your money? When you decide to take control of your finances and direct money to its rightful purpose then you unlock the true potential of money.

Have you ever heard of the term pay yourself first? It is important that you find money from your salary to invest in yourself, just as you would pay any other expense, such as your utilities, groceries etc. Once you have cash, you will find a reason to spend, as expenses will always surface, especially now with the spike in prices resulting from inflation.

Here’s my golden rule:

50% of your income is the maximum for NEEDS (bills & utilities)

30% of your income is the maximum for WANTS (splurges and fantasy items)

20% of your income is the minimum to Savings + Investments

Here are some additional tips to support paying yourself first:

1. Set up an automatic salary deduction to transfer money to an investment account monthly.
2. Create a monthly budget to ensure you always have some money to invest. If you see where your expenses exceed your income, then that is a red flag and needs urgent attention. To correct this problem, see where expenses can be cut, so that you can find money in your budget for investing. Remember, we do not work to live just for today. There will come a day when you no longer receive a monthly salary, and that is when the investments that you made become even more important, by allowing you to live a quality life.
3. Just start! These are two very powerful words, even if $100 is all you have to start; it is still a step in the right direction. As the saying goes, something is always better than nothing at all. Additionally, you will be quite surprised at what $100 can become when it is being invested consistently into the right type of investment over time.

I believe in your future wealthy self. I see you accomplishing all your financial goals and being secure in your personal finances.

BY KEISHA BAILEY

Since the 2008 financial crisis, the global economy has been rebounding with inflation hovering around all-time lows in many parts of the world before the onset of the pandemic. It’s a situation consumers were getting accustomed to, and perhaps comfortable with. You literally could borrow money very cheaply and lots of people were using that money to buy assets, mainly real estate and stocks. This created huge price surges for these assets to the point where questions about “asset bubbles” were emerging.

Now the ‘honeymoon period appears to be over, induced by yet another crisis with no apparent end in sight. We may be coming out of the pandemic, but we need to be mindful of whether we may be headed into another.

Prices are again on the rise and just about everyone is starting to feel the economic pinch as wages aren’t increasing enough. Inflation, which once was thought to be a passing problem by governments and central banks, is now viewed as a persistent and an increasing threat to what our money can do each month. In essence, income is shrinking while living expenses are rising – could this be a recipe for disaster?

At the heart of the problem is the increasing cost for shipping because of the continued lockdowns in China. In short, companies and merchants are paying significantly more to move the goods we consume. Also the Russia/Ukraine war continues to cause oil prices to go even higher. Have you seen gas prices lately? Commodities such as wheat and grains also have higher prices, which filters into higher grocery bills for all of us.

But amid the crisis there are beneficial opportunities. For example, certain investment areas like real estate, stocks, bonds and commodities may be wise financial moves now. Inflation will likely increase the resale value of a property. It could also benefit the investor by way of rent income, which will also increase as inflation soars.

With regards to stocks and bonds it may not be easy to see how investors can benefit since inflation is not good for fixed-income instruments and stocks generally keep pace with inflation. However, strategic moves like purchasing inflation-indexed bonds can help. In these instances, interest payments rise because the interest paid is based on the base value. Similarly, investors should focus on buying stocks in companies where the rising cost of the product can be easily passed on to consumers. In the same vein, tangible assets are a good bet during inflationary periods. For example, investing in agricultural produce or oil will likely deliver significant dividends.

As inflation forces consumers to revisit how they can get the most value for their buck, banks are also looking to cash in. Notably, banks are uniquely positioned to benefit from an environment where inflation is on the rise. That’s because inflation is usually followed by an interest rate increase. In the interim, consumers around the world continue to buckle under inflationary pressures after decades of relatively low consumer prices.

I really hope that with my views and the information shared that you are able to make some shifts in your investing. I want you to be a successful investor and knowledge is critical to do so. I would love to keep connected so reach out to me on IG or Facebook @profitjumpstarter or I am one click away at keisha@profitjumpstarter.com.