Minor RRSP - Advantages & Restrictions

Early Age RRSP

There is no minimum age requirement to open an RRSP account. Children with earned income can open an RRSP account. The following are required in order to do so:

• A SIN (Social Insurance Number) is required for minors.
• Income has to be legitimate
• Income has to be recorded with proper receipts or documents
• T1 tax return has to be filed

There are many advantages of opening an early age RRSP. The followings are a few to mention:

• No actual contributions have to be made in the RRSP. Contributions can be made anytime later on. There is no time limit.
• Accumulates RRSP room for several years, which can be carried forward indefinitely and increases lifetime contribution limits.
• Allows a minor to contribute in RRSP right after entering work force. Someone who did not contribute at an early age wont be able to contribute right after entering work force because there will be no contribution room.
• RRSP deduction can be used anytime later on, when there is enough taxable income to use the deduction. There is no time limit to claim deduction.
• Gives income-splitting opportunity for parents who own business. Parents can hire their own children as employees and can pay then accordingly. Salary given to a child is a tax deductible business expense and it will create contribution room for the child.
• Contributions made in the RRSP will start growing and compounding tax free inside the plan.
• A great way to give children practical lessons about money management and personal finance at an early age.

Not all financial institutions allow minors to have RRSP. Most of the banks and big fund companies (like CI Funds) will allow minors to open an RRSP. Some institutions might put restrictions on minor accounts such as:

a co-signer is required (fund companies can do this)

can’t invest in mutual funds (banks can do this)

can only invest in GICs or savings accounts(banks can do this)

If you happen to face one of these or any other restrictions, do not get discouraged and shop for the best one. Minor RRSP is a great investment vehicle for kids and can provide lifelong benefits.
First Published: May 2007 ADawnJournal.com

How to Find Your Passion

Find Your Path

Three Simple Steps to Find Your passion

Passion is something that comes from your heart and you can continue doing it for as long as you want without any struggle and with enthusiasm. One simple way to look at passion is you are doing something because you want to do it, not because you have to do it.

Here are some simple things you can do to help you find your passion. To discover your true passion, you need to use your creativity and ask yourself some questions to bring out your true self.

Passion in The Past - Go through the recollection of your memories to find out what did you enjoy doing or what you always wanted to be when you were a kid. There is a good possibility that you will find your passion right in your thoughts or dreams when you were a kid.

Your Living Patterns - Although you may not have noticed, your passion is imprinted in those things you do on a daily basis. What you do daily tells you a great deal of what you like enjoying without any pressure. Here are some activities/hobbies you can take a look at to find your passion: the types of movies you watch, the types of books or magazines you read, things you like to collect or perform in your leisure, topics that interest you, events or shows that attract you, types of music you listen to, smartphone or tablet apps that you spend most of your time with, things you love to do when you open your computer, and so on.

Reflection in Your Dreams - We all dream and dreams can be a part of positive thinking to achieve the kind of life we want to live. What type of life do you always dream about living if you were given the opportunity? Or let’s say, if your finances have been taken care of and you don’t need to work anymore to earn money, what would you be doing? How would you allocate your time slot daily for the rest of your life?

If you can come up with your responses for these simple points mentioned above, you will be able to find what your passion is. Once you live a life doing things that you are passionate about, you will have the motivation, enthusiasm, and persistency to sail ahead at full throttle in life. Extraordinary success and fulfillment will be on your way.
First Published: May 31, 2013 www.simplepersonaldevelopment.com

Aeroplan 101– Tips, Tricks, and the Basics

Aeroplan – What You Need to Know

Today, I will give you an overview of the Aeroplan frequent flyer program. Keep in mind this is just some brief basics on the surface and there is a lot more to know if you really want to fly business class, pay very little, and make the most out of this program. In the section “Travel Miles | Points” I will discuss various hotel and airline rewards programs in the future.

What Is Aeroplan – Aeroplan is the loyalty program created by Air Canada and now owned by Aimia.

Aeroplan Value – There is no definite answer. It totally depends on how knowledgeable you are about the program and how you use it. The Points Guy values Aeroplan at 1.5 cent. Aeroplan sells each mile at 3 cents when you are short and need to buy from Aeroplan. Aimia CEO Rupert Duchesne mentions it can be worth 7 to 8 cents in some cases and nearly 30 cents for a business class trip. This is somewhat true; it all depends how you use it.

Star Alliance – Air Canada is a part of Star Alliance, which has 28 members, including Air Canada. In general, you earn and redeem miles within any airline alliance with any frequent flyer miles belonging to any member of that alliance. For example, you can earn/redeem Aeroplan on Swiss Air or you can earn/redeem Miles & More on Air Canada. Also, Aeroplan has some non-alliance partners and numerous retailers, banking and other partners.

How to Search for Flights – This is where you have to know your stuff. I will give you some basic tips. Start with Aeroplan’s website. However, not all rewards flights will be available on Aeroplan. There are some paid sites solely for search purposes. However, you can search on other alliance websites such as United.com (Saver Awards only, Standard Awards appearing on United may not be booked for Aeroplan) and Ana.co.jp for flights that won’t appear on appear on Aeroplan’s site. To book these flights found on other alliance member sites, you have to call Aeroplan to book over the phone and there is a $30 fee.

Avoiding Fuel Surcharges – Air Canada (and some other airlines) is notorious for charging hefty fuel surcharges when you use Aeroplan. Avoid these airlines and the unnecessary charges by simply flying with other airlines that don’t feature these charges. I will not go into details, as I have a video explaining this. View it here: How Not to Get Dinged by Air Canada on Aeroplan Rewards Flights

Do Not Fly Cash Free – Aeroplan encourages you to fly cash free by paying taxes and fees using Aeroplan. However, you will end up being the loser if you choose this option, as your extraction rate for paying fees will be only 1 cent per mile, whether your goal should be to redeem Aeroplan for higher value such as 5 cents or beyond. So when you have small taxes and fees to pay (if you can manage to avoid paying fuel surcharges by not taking those airlines as I mentioned in the video), use cash and save your miles from redeeming them for 1 cent each.

One-Way or Round-Trip – Aeroplan (and most other frequent flyer programs) offer booking a one-way trip for exactly half of the points required for a round-trip. One-way trip booking provides better flexibility, as you may want to book the other leg of your trip with another program or even cash if you get a good deal.

Stopover and Open-Jaw – One of the best kept secrets of Aeroplan is that it allows you to book a stopover in a different city along the way on a round-trip at no additional costs. Open-Jaw allows you to fly to one place and leave from another place (the arrival and departure cities are different) on a round-trip. If you know how to utilize this, you can actually visit 4 places on one round-trip flight on Aeroplan.

Cancel, Change, and Last-Minute Booking – Aeroplan allows you to cancel or change up to 2 hours before departure for a C$90 fee and you can also book up to 2 hours before departure.

What I discussed above is just the basics about Aeroplan. With any hotel or airline loyalty programs, you need to know the ins and outs to become successful. I will be discussing more on AhmedDawn.com about many programs in the future.

How to Make Money Online

Make Money Online

The Internet in its way has had as profound an effect on the world as any invention before it. As profound as television, electricity, the telephone and all the other world-changing developments without which it is hard to imagine life. The Internet is definitely right up there among all of the others, because not only are you sitting reading this on a computer, where it is available specifically due to the Internet, but also the information that makes the writing possible was researched using the World Wide Web. The speed of transmission of information these days is something that the average human could not have conceived of back in the 1980s. Now, it is taken for granted.

Using the Internet to make money is still a relatively new thing, certainly in comparison with how businesses have operated without it. It is now possible to make money, spend it and save it without ever leaving your home. Recognizing an opportunity to make money, then realizing it by putting your idea into cyberspace and watching the cash roll in is something that more and more people are finding to be a surprisingly manageable solutionto money worries, and a worthwhile income stream for people who are already doing OK. Like many ways of making money, people look at the Internet and the business opportunities it offers and think “There has to be more to it than that.” They scorn that it might just be a matter of getting an idea and putting it into practise. But they are not quite right to do so.

Sure, if you are looking for a “get rich quick” scheme, you will generally find that your options are at best limited. If there was a way of everybody making money just by doing nothing, then the global financial crisis would be easily solved. Things do not work that way, and you need to have something to offer if you are looking to get anywhere. It may not be easy, and it certainly will not just happen. But one thing that is for certain is that the Internet has opened the way for many people to make a tidy sum of money without having to spend a lot or travel very far. It hasn’t made making money easy, but it has presented people with opportunities. These opportunities have made a lot of people rich, and anyone with an idea, the work ethic to make it happen and a cool head can do very well for themselves.

If you have a PayPal account, a website and an idea, you can make money online. The PayPal account is available to everyone, the website is too. Even if you don’t have the ability to create websites yourself, blogging platforms make it possible for you to simply take care of the text and the images, and leave the technical stuff to someone else. The idea? Well, that has to come from you. But many of the people who are billionaires today had an idea that may not have been anything more complicated or revolutionary than an idea you have had. What has made them rich and successful is their desire to make that idea a reality. That is something that is not beyond any of us.
First Published: April 18, 2009 entrepreneurjourney.com

Let Your Credit Card Company Pay Your Interest

Credit Card Pays Interest

By paying your balance every month in full, you are actually using your card company’s money for free for your full billing period. Your card company always wants you to carry a balance so they can charge you interest and that’s how card companies make money.

If you are paying your balance in full, you are actually using your card company’s money at their high interest rate for free. Let me give you an example. In Sep 2006, I bought five British Airways return tickets for my trip at approximately $2000 each. My total cost was $2000 * 5 = $10,000. Most of the card companies charge 20% annual interest rate. If I do an approximate calculation for $10,000 at 20%, my one month interest charge would be $165. Yes, that’s right.

My one month interest charge would have been $165. But I avoided this charge by paying my balance in full and definitely my card company did not like it because they lost $165. If you look at this little differently, you can say that I borrowed money for one month at 20% interest rate but I have not paid any interest because my credit card company paid it for me.

What do all these translate into? Know how you are being charged and what your interest rate is. Pay your balance in full. It’s like using your card company’s money at their expense.