Dave Chilton

What is an RESP?

How long have they been around?

What was the government's intention in laying them out the way it did?

Right, and it stands for Registered Educational Savings Plan, and you're registering it with the government because, to your point, you get certain tax advantages.

The money grows tax-sheltered while it's in the plan, and the part that's taxable comes out taxable in the hands of the student.

And again, to your point, they're paying a very low tax rate in the vast majority of instances.

You mentioned the two pots that come out.

The other, I assume, is the contribution money itself, which is not taxable because, unlike an RRSP, you didn't get the tax deduction when you put it in.

Okay.

And so walk us through, how does the grant work?

How does the free money, to use your expression, work?

Yeah, that makes a lot of sense.

And so let me ask you an interesting question.

Let's say that you're lucky enough to have very well-to-do grandparents and they look at all this and they say, we really want to fund this aggressively.

Do people ever put a lot of money in the RESP upfront?

So 20, 40, 50,000 right away.

They don't get the full advantage of the grant necessarily if they do it that way, but they have the advantage of the compounding on a tax deferred basis over X number of years.

Do you see that much at all?

Right, for sure.

Yeah, very rare.