Installing Docker on a new VM

A few people have asked me for RESP advice, so here is my generic answer, with the disclaimer that I'm not a financial advisor.

There are two major decisions to make for an RESP:

  1. Decide how much you want to invest per year
  2. Decide whether you want to self-manage your money or not

This article discusses the options for 1. It really depends on how much money you have available to invest and what your alternatives are. I'm assuming you've maxed out your RRSP/TFSA: if you haven't, you probably want to contribute the minimum $2500 per year to max the gov't RESP grant and put the rest in your RRSP/TFSA. If you contribute at least $2500 per year for 14 years, and then have an additional year where you contribute at least $1k, you'll max out the CESG, which is the gov't grant you get for contributing to the RESP.

In terms of choosing how much to invest, the mathematically optimal thing to do is to invest all of the money (~$50k) in the first year. This is, obviously, hard to do, but will result in the best outcome, as the money has the longest time horizon to grow tax-free. You don't get much gov't grants by doing this, but it's a good way to maximize your

A second option is to invest $16500 ($14k + $2500 annual contribution) upfront, and then invest an additional $2500 every year until they turn 14, at which point you've maxed out all the gov't grants, and you can top it up with $1k.

Finally, if that's not financially feasible, you can do $2500 per year, and try to catch up the remaining $14k when you have extra income. In any case, it's worth doing the minimum $2500 to max out the grants.

  1. Self-management.

A lot of the RESPs that are actively advertised to parents are, to be blunt, scams. I'd recommend going with either a low-fee online broker, like Questrade, QTrade, or WealthSimple, or with one of the big bank brokerage accounts, like TD Direct Investing or BMO Investorline. Basically, whoever you have your RRSP/TFSA with should be able to open an RESP up with them.

The recommended strategy for investing your money is to start out with a 90/10 equities/fixed income portfolio, something like VFV/VAB, and every year, adjust the portfolio so that when they turn 18, you have 100% in fixed income. You basically make the % allocated to fixed income equal to the (kid's age + 2) * 5%. So 10% in the first year, 15% when they're 1, 20% when they're 2, etc. You can be slightly more aggressive with your schedule, but you really want to be gradually shifting the portfolio towards 100% bonds by the time they're 18 to minimize variance.

This is pretty easy to do if you're comfortable buying/selling ETFs. I have a spreadsheet that calculates this.

If you're not comfortable doing this yourself, I'd go with one of the managed funds. I like JustWealth as they provide a dedicated RESP target-date fund which will do everything I described above for you. You could also go with Questwealth or WealthSimple and adjust the aggressiveness over time. Looking at Questwealth as an example (but all the advisors have similar options), I'd start out in an Aggressive fund for the first 4 years, then Growth for the next 4 years, followed by Balanced for 4 years, then Income for 4 years, and ending in Conservative. This would be easy to do, just set a calendar reminder to lower the aggressiveness every 4 years.

Lately, I have been writing on my newsletter.