You probably know that you can use your RRSP to make investments. Perhaps you already have a few that you know you want to invest in – private mortgages are one of the most popular ways to do it, for instance. But do you know how to do it? It’s more than just going to the bank, opening an RRSP and putting in your full contribution amount. You need to have a self-directed mortgage, and before you do, you need to know what that is and how to do it.
A self-directed RRSP is one that’s needed to put your money into investments. One of the best things about self-directed RRSPs is that you can use them to hold more than just one investment. You can choose a number of different investments, even from a number of different companies. But you can’t do it at a bank. You need to go to a brokerage or an investment firm that can set up the RRSP properly for you, ensure that it’s self-directed, and that you can make those investments that you want to with it.
Why would you hold more than one investment in an RRSP? One reason is specifically if you’re investing in private mortgages. Lending to more than one borrower, but all from the same RRSP, allows you to keep track of all those different borrowers, and all the assets and dividend returns you might be gaining at the same time, all at a glance. There’s no need to pull out all kinds of different holdings statements or packages and sort through them all, because they’ll all be there at a glance for you and you’ll be able to sort through them easily.
You’ll also obviously have a much wider range of what you can do with your RRSP when it’s held at a bank or a mutual fund company. Because the RRSP is self-directed, it really is just that – you direct, and you decide what and when you want to do with the funds in your account. There are few restrictions, and you’ll also have an advisor on hand that can give you great advice on what to do with your RRSP. It won’t just be a banker looking to increase the bank’s portfolio and client base.
Investing through your RRSP is a great idea, but know what you need to do first. You need to visit a brokerage and set up a self-directed RRSP that will help you do it.