Snake oil from Royal Bank

[From The Hip]

In my travels yesterday I passed an RBC branch that had a huge picture window advertisement of "$75 per week over 20 years = $224998" so I went in today to that branch to ask about it.After 5 minutes of conversation about it I got it nailed down to the brass tacks when I asked "what is that SPECIFIC investment?" and I was told "It is an example of how money CAN accumulate" so my response was "Thanks for wasting my time" and I walked out abruptly and cut the guy off mid sentence.

Dont show a big advertisement if you dont have the means to back it up.....and the microscopic fine print does not = a way out.

FTH

[stefk]

Nothing like good old fashioned switch and grab false advertising..

[Grizzly Adams]

Most of those investment plans promoters sell are just as Pie in the Sky.

Grizz

[CanuckShooter]

Originally Posted by From The Hip

In my travels yesterday I passed an RBC branch that had a huge picture window advertisement of "$75 per week over 20 years = $224998" so I went in today to that branch to ask about it.After 5 minutes of conversation about it I got it nailed down to the brass tacks when I asked "what is that SPECIFIC investment?" and I was told "It is an example of how money CAN accumulate" so my response was "Thanks for wasting my time" and I walked out abruptly and cut the guy off mid sentence.

Dont show a big advertisement if you dont have the means to back it up.....and the microscopic fine print does not = a way out.

FTH

So...how does it work? If you put $75 a week into an interest bearing account, how much would you have in the bank after 20 years? Or maybe the question is what interest rate would you have to get to reach that amount in 20 years??

[badger]

The required return is 10% per year compounded. A little higher than the stock market return from 1995 to 2015. You would have invested $78,000 over the 20 years, $75 X 52 weeks/year.

[Freedom55]

Or you could think of it as a self-directed pension scheme for yourself rather than spend it all now and complain that the federal government doesn't do enough for retiree age workers or rant about former municipal workers on a defined benefit pension plan that you don't have to support.

Free

[Takemeoutside]

Probably just trying to get someone with no investment experience or knowledge in the door asking questions.

While it might be optimistic, I don't think it's an unreasonable advertisement. Especially considering other out there.

[decker]

Don't listen to the banks, they offer no service and are scam artists. They have minimal training with investments. Go find a broker to invest with, Broker are investing in the same investments that the banks do.
The banks take your money and offer you maybe 2% return and turn around and invest into other markets where they are receiving up to 24% return. Why not go see and broker and invest like this and receive from 5 to 16%, and cut out the banks.

[Clgy_Dave2.0]

Originally Posted by From The Hip

In my travels yesterday I passed an RBC branch that had a huge picture window advertisement of "$75 per week over 20 years = $224998" so I went in today to that branch to ask about it.After 5 minutes of conversation about it I got it nailed down to the brass tacks when I asked "what is that SPECIFIC investment?" and I was told "It is an example of how money CAN accumulate" so my response was "Thanks for wasting my time" and I walked out abruptly and cut the guy off mid sentence.

Dont show a big advertisement if you dont have the means to back it up.....and the microscopic fine print does not = a way out.

How about we read for ourselves what it's about, rather than the rantings of someone's inaccurate generalizations and assumptions.
It's simple math on how to save money using compounding interest.

RBC's Regular Investing Creates Extraordinary Possibilities

investing a little each week in a Registered Retirement Savings Plan (RRSP) can help make it happen.

The sooner you start, the more it adds up.
Investing regularly (weekly, monthly, etc.) can grow into a large sum over time. Start with just $75 a week or another amount that fits your budget.
Set it and forget it.
[more info]

Originally Posted by Freedom55

Or you could think of it as a self-directed pension scheme for yourself rather than spend it all now and complain that the federal government doesn't do enough for retiree age workers or rant about former municipal workers on a defined benefit pension plan that you don't have to support.

^^ This guy gets it.

Some of these threads.

[79ford]

Rbc is bad for the bait and switch, they ll have an internet ad that leads to something totaly different than the sticker says.

[avb3]

Years ago, my first job was in a bank. Then it was all about customer service, keeping deposits and lending out money, after most of the banks money was made on the interest spread between deposits and loans.

Staff at that point interacted with customers and knew who they were. Bank managers had overall authority depending on the size of the branch on making loans and other financial arrangements with customers.

In today's world, the vast majority of bank employees are actually salespeople and are paid at least partially on their sales performance. Many branches do not have an actual branch manager other than an administrative manager, and decisions are made electronically, and at regional and head offices.

Some of their sales tactics are as slick as the proverbial used car lot. A significant if not major portion of their income in today's world come from fees, not the spread in interest rates.

[Clgy_Dave2.0]

Originally Posted by 79ford

Rbc is bad for the bait and switch, they ll have an internet ad that leads to something totaly different than the sticker says.

You probably clicked on the wrong ad.

[Stinky Buffalo]

A former co-worker of mine had started a financial advisory company. On their web page, it declared how a periodic investment of x amount would result in y dollars after z years, using their services.

Quick math revealed that stuffing that same amount into your mattress at the same frequency would have the same net effect.

[I-Love-Eyes]

World Financial Group (WFG) has an ad on TV that shows the "Rule of 72"

Divide 72 by a fixed rate of interest to see how long it takes your investment to double. For example:

72 divided by a rate of 12% = 6 years.
72 divides by a rate of 1.5 % = 48 years.

So, if you put $5000 into an investment at a fixed rate of 1.5 %, it would take 48 years to become $10000.

I laughed at the ad for the simple reason of the rates they are using. A 0.5% rate is almost as good as it gets right now.
72/.5=144 years to double.

[CanuckShooter]

Originally Posted by badger

The required return is 10% per year compounded. A little higher than the stock market return from 1995 to 2015. You would have invested $78,000 over the 20 years, $75 X 52 weeks/year.

And assuming, if you had enough room, put that $75 and your increased income tax refund into an RRSP....what sort of return would you need? Assuming a 43% combined income tax...

[Clgy_Dave2.0]

Originally Posted by I-Love-Eyes

World Financial Group (WFG) has an ad on TV that shows the "Rule of 72"

Divide 72 by a fixed rate of interest to see how long it takes your investment to double. For example:

72 divided by a rate of 12% = 6 years.
72 divides by a rate of 1.5 % = 48 years.

So, if you put $5000 into an investment at a fixed rate of 1.5 %, it would take 48 years to become $10000.

I laughed at the ad for the simple reason of the rates they are using. A 0.5% rate is almost as good as it gets right now.
72/.5=144 years to double.

I think you're confusing simple interest rates vs investment returns.
If your investments are only returning ~1% then you need to invest more wisely.
We're not talking about a savings account here.

[Clgy_Dave2.0]

Originally Posted by CanuckShooter

And assuming, if you had enough room, put that $75 and your increased income tax refund into an RRSP....what sort of return would you need? Assuming a 43% combined income tax...

Umm...the investment that the OP and the RBC ad is talking about IS an RRSP investment.

[CanuckShooter]

Originally Posted by Clgy_Dave2.0

Umm...the investment that the OP and the RBC ad is talking about IS an RRSP investment.

Could be a TFSA?

[I-Love-Eyes]

Originally Posted by Clgy_Dave2.0

I think you're confusing simple interest rates vs investment returns.
If your investments are only returning ~1% then you need to invest more wisely.
We're not talking about a savings account here.

I don't think so........

http://www.worldfinancialgroup.com/the-rule-of-72/

[Nova316]

Originally Posted by 79ford

Rbc is bad for the bait and switch, they ll have an internet ad that leads to something totaly different than the sticker says.

I think there only good one was that $50 card prepaid.
Come talk to a specialist for an RRSP account and get $50.

Walked in talked to an "Adviser",
How high are your MER for these funds? You don't know?
Average %? Don't know that either?
Want to sign me up for a credit card? Annual cost?

Okay were done wheres my $50

[Clgy_Dave2.0]

Originally Posted by CanuckShooter

Could be a TFSA?

The OP was talking about an RBC ad. That ad was talking about an RRSP investment.

Originally Posted by I-Love-Eyes

I don't think so........

http://www.worldfinancialgroup.com/the-rule-of-72/

You missed my point. I know what the rule of 72 is.
You said

A 0.5% rate is almost as good as it gets right now.

That is not the average rate of return for most wise investments. It is the average rate for simple savings accounts interest.

Originally Posted by badger

The required return is 10% per year compounded. A little higher than the stock market return from 1995 to 2015. You would have invested $78,000 over the 20 years, $75 X 52 weeks/year.

$75 per week over 25 years...you only need 6.5% annual rate of return to get to $225,000

[I-Love-Eyes]

Originally Posted by Clgy_Dave2.0

That is not the average rate of return for most wise investments. It is the average rate for simple savings accounts interest.

HMMMM...simple savings account? The GIC I just got is only .4% for the term.

The way I see it, the only way to get a higher rate of return is to invest higher risk products. At the stage of this economy, I am not willing to jeopardize my principle amount on high risk investments. I have investments in mutual funds that at this point are pretty shaky, and they are supposedly in a "balanced risk" portfolio.

That being said, I won't claim to fully understand how all that works, but based on the TV AD, it would sure be nice to see a 12% return rate on my cash.

[Takemeoutside]

Through my workplace RRSP I had some money in about 5 different funds. As of last year they were returning between 7-16%. Everything is hurting now though. But 10% is definitely achievable in a good economy. Those 5 funds average returns over 5 years are 7%, 8%, 10%, 14% and 18%.

Things can be pretty confusing when you are starting out getting into a little investing, I'm just starting to get the basic ideas I feel.

[Clgy_Dave2.0]

Originally Posted by I-Love-Eyes

HMMMM...simple savings account? The GIC I just got is only .4% for the term.

The way I see it, the only way to get a higher rate of return is to invest higher risk products. At the stage of this economy, I am not willing to jeopardize my principle amount on high risk investments. I have investments in mutual funds that at this point are pretty shaky, and they are supposedly in a "balanced risk" portfolio.

That being said, I won't claim to fully understand how all that works, but based on the TV AD, it would sure be nice to see a 12% return rate on my cash.

12%?? You only need 6% compounded annually to get the returns the Ad is talking about. ($75/wk over 25 years=$225K) Which is certainly doable with long term mutual fund rrsp investing.

[Tfng]

Originally Posted by I-Love-Eyes

HMMMM...simple savings account? The GIC I just got is only .4% for the term.

The way I see it, the only way to get a higher rate of return is to invest higher risk products. At the stage of this economy, I am not willing to jeopardize my principle amount on high risk investments. I have investments in mutual funds that at this point are pretty shaky, and they are supposedly in a "balanced risk" portfolio.

That being said, I won't claim to fully understand how all that works, but based on the TV AD, it would sure be nice to see a 12% return rate on my cash.

I'll preface this with saying I'm far from an expert. I just saw an investment specialist yesterday though. That GIC won't even keep up with inflation.

With the economy the way it is everything is "on sale", it's a great time to buy. Perhaps you're very close to retirement and can't risk your principle. I'm a higher risk investor and have time on my side. Over the years I've done well in higher risk, when things drop ignore it and buy more. It's always balanced out and earned me good returns.

[The Cook]

Isn't the RBC the same scabby outfit that wanted their soon to be laid off employees to train their third world replacements ? Wouldn't p^ss on them if they were on fire.
Just one fools opinion

[Clgy_Dave2.0]

Originally Posted by The Cook

Isn't the RBC the same scabby outfit that wanted their soon to be laid off employees to train their third world replacements ? Wouldn't p^ss on them if they were on fire.
Just one fools opinion

Yes...RBC are scum, but the other chartered banks are saints.

They're all businesses out to make money. They all offer the same services at the same rates. You can dress up different packages and put on a few bows and ribbons, just like cel companies and cable companies do...but in the end, you're going to get the same product for the same price.

[wildwoods]

Originally Posted by Clgy_Dave2.0

12%?? You only need 6% compounded annually to get the returns the Ad is talking about. ($75/wk over 25 years=$225K) Which is certainly doable with long term mutual fund rrsp investing.

I think the same way as you in this regard. This isn't snake oil.Had the OP given the guy at RBC a chance to explain himself and prove the numbers potential, he may have figured that out.
I've had years at 17% returns recently and last year that dropped to 10%. This year so far hasn't gained much of anything but we're buying low and will sell high eventually.



I have banked at RBC since i was a little kid. There's no perfect financial institution but they're always been great to deal with.

[Weedy1]

What is wrong with you people!!!!

Buy a frickin lottery ticket!!! That's the way 34% of Canadians will be retiring!!
Just see here: http://www.canadianbusiness.com/blog...ement-lottery/

I figure if I buy 3 tickets then I can retire tomorrow. I mean do the math:

3 tickets * 34% chance to win = 102 % chance of winning = instant retirement.

Makes perfect sense to me.

[From The Hip]

Originally Posted by wildwoods

I think the same way as you in this regard. This isn't snake oil.Had the OP given the guy at RBC a chance to explain himself and prove the numbers potential, he may have figured that out.
I've had years at 17% returns recently and last year that dropped to 10%. This year so far hasn't gained much of anything but we're buying low and will sell high eventually.



I have banked at RBC since i was a little kid. There's no perfect financial institution but they're always been great to deal with.

OP Here

I did ask several pointed questions to the guy I was talking to.I asked about yearly interest yield/TFSA/RRSP and on and so forth.The basic parrot answer I got was that the RBC had no specific financial product on OFFER that could back up the advertisement.I was told "it is a possibility" but when asked for a specific financial investement the guy had no effing clue.

FTH