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TFSA vs. RRSP Duel: Who Wins?
The inability to make a decision has often been passed off as patience.
~ Author Unknown

At this time of year, many Canadians are trying to figure out where to put their savings in order to reap the greatest tax and long term investment advantage. With the introduction of TFSAs, that decision has been complicated a bit. There has been great debate over which are the best investment vehicles to choose for your TFSA and whether RRSPs are a better retirement savings option.

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RRSPs: Taking Money Out
Life is not long, and too much of it must not pass in idle deliberation how it shall be spent.~ Samuel Johnson

Our series on RRSP Basics continues today with some information on how and when to take money out of your RRSP.
Withdrawing Money Before You Retire
The idea behind RRSPs is that you won't be taking any money out until you retire. But as we all know, life happens. Here's how it works if you encounter an emergency where you absolutely need to take some of your money out:
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TFSA: Investment Gains, Withdrawals and Contribution Room
Money often costs too much.
~Ralph Waldo Emerson
Last year I wrote about TFSA Withdrawals, giving some examples of how they work. In the last couple of weeks, however, I've received a lot of questions from readers on how capital growth affects your TFSA contribution room.
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TFSA Contribution Limit for 2012
Simplicity is the ultimate sophistication.
~Leonardo DaVinci

Most people have calculated that if the CPI (Consumer Price Index) runs around 2%, that would mean we should exceed the threshold as of 2012. While that looks likely to happen, the CRA hasn't officially announced the 2012 TFSA limit yet. I spoke to someone at CRA last week and they said that the official announcement hasn't come yet, but that it will (obviously) be out by the end of 2011. He advised us to keep watching the CRA website for TFSA updates.
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RRSP vs. Paying Down Debt
Today, there are three kinds of people: the haves, the have-nots, and the have-not-paid- for-what-they-haves.
~ Earl Wilson
RRSPs work best for the haves. The have-nots might be better off starting with TFSAs, and the have-not-paid-for-what-they-haves should pay down debt first. That would pretty much sum up my general view of using RRSPs.
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Financial Outlook for 2012
We are rapidly coming to the point where we can no longer stuff the dirty clothes and toys under the bed. There is no more room. We are going to be forced to actually deal with the mess.
~ John Mauldin, 2012: A Year of Choices

Just a few weeks into 2012, markets have been mostly positive - until Friday's rumours of European downgrades and JP Morgan's disappointing earnings results derailed the enthusiasm. The warm holiday glow of optimism seems to be fading and 2012 is already starting to feel a lot like 2011, with all of ...
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Yes, You Can Live Without Bonds
The conventional view serves to protect us from the painful job of thinking.
~J.K. Galbraith

A recent article in the Globe and Mail delivered the following advice to investors: Don’t Let a Fear of Bonds Infect Your Healthy Portfolio. The implications are clear:

Recent concerns about ultra-low interest rates eventually turning higher are overblown.
If you succumb to the paranoid people who think interest rates can actually rise above 0% - 3%, your portfolio will be unhealthy, damaged, infected. (The image with the article showed people in protective masks.)
And my personal favourite: Long term investors ...
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6 Remedies For a Debt Hangover
Cheers to a New Year and another chance for us to get it right.
~ Oprah Winfrey
OK, so you overindulged. You read all of those articles warning about moderation or complete avoidance. You intended to follow that prudent advice. But you didn't. I could easily be talking about alcohol consumption or debt consumption. Either way, over-consumption will put you in a precarious position.

If you're not in that position on either front, congratulations. If you are, you're not alone. Debt has been in the news a lot lately and if you read my post on 2010 ...
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The Gene Mauch Rule for Investing Success
The following is a guest post by Rob Bennett. I'm pleased to announce that Rob will be sharing his thoughts with us here in a monthly column. Thanks Rob! :)

Gene Mauch was the manager of the Phillies baseball team when I was a boy growing up in Philadelphia. He once said something in an interview that has stuck with me ever since.

Mauch said that, when his team was on a winning streak, his job was to pop holes in the inflated egos of his players. When players are winning, they start thinking that they are so ...
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The Real January Effect
We spend January 1 walking through our lives, room by room, drawing up a list of work to be done, cracks to be patched. Maybe this year, to balance the list, we ought to walk through the rooms of our lives... not looking for flaws, but for potential.
~Ellen Goodman
Have you ever heard of The January Effect? It's basically a piece of market folklore that gets mentioned each New Year, with updated performance statistics. It usually comes with an endless debate about whether it's an actionable piece of information or something more ...
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Are Public Pensions the Next Bubble?

By 2 Cents on November 17th, 2010 | Category: Economics | 12 comments

The world is governed more by appearance than realities so that it is fully as necessary to seem to know something as to know it.

~Daniel Webster

Update: This article was featured in the Carnival of Wealth #13 posted at Personal Dividends. Thanks!

I used to think that accounting principles were sort of set in stone like 2 + 2 = 4. You take account of how much you have and how much you owe. End of story. Dealing with my own finances and watching some of the voodoo accounting to which we’ve borne witness over the past few decades has caused me to realize that there is more art than science to accounting practices.

What is my net worth? That depends on the value I assign to my assets. I might say my house is worth $300 000, but if I can’t find [...]

Read on and enjoy … Are Public Pensions the Next Bubble?

Time to Stop the Bubble Machine?

By 2 Cents on October 29th, 2010 | Category: Economics | 17 comments

Debt and deficits are not inventions of ideology. They are facts of arithmetic.

~Paul Martin, Canada’s finance minister at the start of the country’s “Redemptive Decade”

Update: Thanks to The Financial Blogger for choosing this article for the #1 spot in the Best of Money Carnival – My Favorite Money Quote Edition.

Usually our Friday Food for Thought posts highlight a single article. Today, I’m going to highlight and compare 3 great pieces, so this article is a little longer than usual. I think you’ll find, however, that these articles will provide you with a lot of food for thought that’s well worth your time.

On Monday I laid out some of the reasons why most of our capital is in cash. I then went on to look at What Would Make Me Invest in the Stock Market again. I [...]

Read on and enjoy … Time to Stop the Bubble Machine?

The Law of Diminishing Returns

By 2 Cents on September 6th, 2010 | Category: Spending | 10 comments

You can never get enough of what you don’t need to make you happy.

~ Eric Hoffer

Remember when you were a kid and you begged, pleaded with, and nagged your parents to buy you something for months on end? You wanted it so badly. It would solve all of your problems and provide you with endless happiness.

When your birthday came along and you finally received the desired treasure, it probably did give you the boost you predicted. But how long was it before that treasure ended up collecting dust somewhere and you moved on to the next desperately needed gadget, trinket, or toy?

For many of us, this cycle repeated over the course of our youth. For some of us, it continued well into our adult years. Indeed, the decades following World War II saw society as a whole adopt much the same pattern. Our homes gradually [...]

Read on and enjoy … The Law of Diminishing Returns

No Respite in Diversification

By 2 Cents on July 23rd, 2010 | Category: Investing | 13 comments

Invest a few moments in thinking. It will pay good interest.

~ Author Unknown

Update: This article appeared in the Canadian Personal Finance and Investing Carnival posted at Investing Thesis. Thanks!

We’ve been talking about bubbles all week. So far, we’ve outlined 5 financial bubbles and 5 socioeconomic bubbles that could affect your money and your quality of life. It looks like we may have a bubble of bubbles on our hands. Does that have to be a bad thing? How can we prepare for the popping of these bubbles? What does all of this mean for your investment strategy?

Traditional Advice

One perennial piece of advice is that diversification can smooth out fluctuations in your investment returns. Don’t put all your eggs in one basket. That way, if you have 3 baskets and one is dropped or [...]

Read on and enjoy … No Respite in Diversification

5 Financial Bubbles: Are We Facing a Bubble of Bubbles?

By 2 Cents on July 19th, 2010 | Category: Economics | 21 comments

Economic advance is not the same as human progress.

~ John Clapham

Update: This article was included in the Carnival of Personal Finance #267 at Beating Broke. Thanks!

We’ve heard a lot about bubbles in the economic world over the past decade – so much, in fact, that it seems like we might be facing a bubble of bubbles. But what does that mean to the average person? We’ll take a look at some of the issues and implications of our bubblicious culture this week and try to figure out how to handle it all.

What’s a Bubble?

The term bubble has been tossed around pretty liberally of late, with just about every asset class having been labeled a bubble at one time or another. All the while some analysts keep insisting that some of these bubbles are just bugaboos [...]

Read on and enjoy … 5 Financial Bubbles: Are We Facing a Bubble of Bubbles?

TFSA vs. RRSP Duel: Who Wins?

RRSPs: Taking Money Out

TFSA: Investment Gains, Withdrawals and Contribution Room

TFSA Contribution Limit for 2012

RRSP vs. Paying Down Debt

Financial Outlook for 2012

Yes, You Can Live Without Bonds

6 Remedies For a Debt Hangover

The Gene Mauch Rule for Investing Success

The Real January Effect

Are Public Pensions the Next Bubble?

Time to Stop the Bubble Machine?

The Law of Diminishing Returns

No Respite in Diversification

5 Financial Bubbles: Are We Facing a Bubble of Bubbles?

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