Alison’s Rule #1:

Think Inside the Box
You have an RRSP, or you intend to open one. That's the box. But it is critical to pay attention to the investments inside that box. If you don't understand them you can't monitor them. If what is inside your RRSP box confuses you then you need to go back to the basics and understand each and every investment.

Alison’s Rule #2:

Protect Your Interest
Make sure you put your interest paying investments such as bonds, GICs and high interest savings into your RRSP. Interest is taxed at the same rate as earned income. But inside your RRSP the interest you earn will be sheltered from tax. So your money will grow that much quicker.

Alison’s Rule #3:

Avoid the Borrowing Trap
Do not borrow for your RRSP unless you have the discipline to a) use your all of your tax refund to pay it back and b) pay back anything left on the loan by the end of the year. Remember the interest on an RRSP loan is not tax deductible. And if your investment loses money you still have to pay back the loan and the interest on it.

Alison’s Secret:

Understand or Walk Away
The single biggest mistake people make with their RRSP is to purchase product they don't understand. If you don’t understand an investment well enough to explain it to your spouse or a friend, then walk away from it. And if your advisor can’t explain it well enough so that you can repeat the explanation, walk away from it.