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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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Financial Spilled Milk: Macbeth Meets Ponzi

By 2 Cents on May 11th, 2010 | Category: Debt | 4 comments

It doesn’t matter how much milk you spill, just so long as you don’t lose the cow.

~ Mark Guilbeau

“Fair is foul and foul is fair.” (Macbeth, Witches, Act I, scene i) The EU is the latest hero in the bailout bonanza. A paltry trillion dollars bought a rip-roaring short-covering rally on stock markets world wide yesterday. So why don’t I feel all better?

Once again, we are perpetuating a cycle that’s running in reverse. In a capitalist system, we’re supposed to reward success and let the failures fail. To use the forest fire analogy that I’ve used before in my discussion of the CMHC and Fannie Mae, we’re still holding up the dead wood and choking out new, healthy growth. If we continue to reward failure, failure is what we’ll continue to get.

Welcome to the Money Pit

“Welcome back my [...]

Read on and enjoy … Financial Spilled Milk: Macbeth Meets Ponzi

Category: Debt | Tags: bailouts, economy, financial crisis, Minsky, sovereign debt |

Is Capitalism Broken?

By 2 Cents on April 12th, 2010 | Category: Economics | 13 comments

What we have in America is socialism for the rich and capitalism for the poor.

~ Gore Vidal

Update: This article is included in the Carnival of Financial Planning #138. Thanks!

In the inaugural installment of this series on capitalism, we introduced Capitalism’s 3 Children: owners, managers, and employees. All of them have key roles to play in the success of our economy. But, like any group of siblings, they tend to jockey for attention and frequently squabble among themselves.

Is Capitalism Doing Fine, Fundamentally Flawed, or Broken?

When the financial crisis and ensuing recession hit, we heard a lot of people blaming the capitalist system for the problems. So today we’re asking: Is capitalism broken? It seems to me that there are 3 main camps, each of which would answer that question differently:

No. There’s [...]
Read on and enjoy … Is Capitalism Broken?

Category: Economics | Tags: capitalism, financial crisis, Minsky |