By 2 Cents on November 15th, 2011 | Category: Saving |  Simplicity is the ultimate sophistication.
~Leonardo DaVinci
When the Tax Free Savings Account was introduced in Canada in 2009, it was hailed for its practicality and simplicity. Any Canadian 18 years or older can now contribute up to $5000 per year to a TFSA and have those savings grow completely tax free. While TFSA contributions are not tax deductible, you will not have to pay any tax on the money you withdraw from your TFSA.
You can put just about any type of investment in your TFSA, or choose a number of different TFSA accounts for different purposes. You could simply have a TFSA savings account, or you could open a TFSA brokerage account whereby you could include stocks, bonds, ETFs or just about any other type of investment vehicle. Whether you earn interest, dividends or capital gains on your savings, your money can be withdrawn tax free. [...]
Read on and enjoy … TFSA Contribution Limit for 2012
By 2 Cents on February 21st, 2011 | Category: Saving |  The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.
~F. Scott Fitzgerald
Update: Thanks to Arjun at Investing Thesis for including this article in the Canadian Personal Finance and Investing Carnival #16.
Very few topics elicit the kind of virulent debate that the TFSA vs. RRSP argument has generated in Canada this RRSP season. To be honest, those of us who cover finance are probably a little tired of writing about the TFSA vs. RRSP war. I’m sure a lot of readers don’t care to read about it anymore. And yet we (including me, apparently) just can’t seem to let it go. (The RRSP deadline for the 2010 tax year is March 1, 2011, so it should be over soon. )
For years, [...]
Read on and enjoy … RRSP vs. TFSA: One Last Dip into the Debate
By 2 Cents on January 24th, 2011 | Category: Retirement |  The conventional view serves to protect us from the painful job of thinking.
~J.K. Galbraith
Update: This article was included in the Canadian Personal Finance and Investing Carnival #14. Thanks!
January is already coming to a close and February will soon be upon us. In the Canadian financial realm, that usually means a mad dash by financial advisors and journalists to remind us that we only have a few weeks left to make the obligatory contribution to our RRSP, or face the reality of dining on Tender Vittles in our golden years. This year, however, there seems to be a bit of an RRSP backlash, with more than one article taking a not-so-fast tone to contrast the steady “RRSP now” drumbeat pounded out by some members of the financial services industry and media.
Recently, Jon Chevreau of the Financial Post reviewed [...]
Read on and enjoy … 5 Reasons to Skip the RRSP Contribution this Year
By 2 Cents on May 25th, 2010 | Category: Saving | The best things in life are nearest: Breath in your nostrils, light in your eyes, flowers at your feet, duties at your hand, the path of right just before you. Then do not grasp at the stars, but do life’s plain, common work as it comes, certain that daily duties and daily bread are the sweetest things in life.
~ Robert Louis Stevenson
Update: This article is included in the Carnival of Personal Finance #259 at A Gai Shan Life.
I love TFSAs. I think they’re the best financial “innovation” to hit the market in a long time. Last week, I wrote a lot about the complexities that have built up, wreaked havoc on, and continue to threaten our financial system.
The beauty of Tax Free Savings Accounts (TFSAs) lies not only in their tax sheltering function, but in their simplicity. The [...]
Read on and enjoy … TFSA Withdrawal Rules
By 2 Cents on March 16th, 2010 | Category: Money Psychology | I try to take one day at a time, but sometimes several days attack me at once.
~ Jennifer Yane
Update: This article is featured in the Money Hackers Blog Carnival #109 posted at Maximizing Money. Thank you!
I’ve written a lot of “vs.” posts comparing various financial priorities like RRSPs vs. TFSAs and RRSPs vs. Paying Down Debt. I still understandably get a lot of questions about which of these to do first and how to put financial priorities in order. Should you take them on one at a time or try to tackle them all at once? As usual, a lot of that will depend on your unique situation.
We are constantly bombarded by advice that tells us that we need to be maxing out our RRSP contribution room, our TFSA contributions, and saving [...]
Read on and enjoy … Financial Priorities: Focus vs. Diffusion
By 2 Cents on March 11th, 2010 | Category: Investing | Know safety, no injury. No safety, know injury.
~ Author Unknown
This is another question that’s come up quite a bit lately and it’s pretty easy to answer. The safest place for your money is in a government guaranteed account. If you are Canadian, this means an insured account at a CDIC member institution.
OK, so it’s not quite that simple. There’s quite a bit that you should know about where and how the Canada Deposit Insurance Corporation protects your deposits. I’ll try to cover most of it here.
What’s Covered?
Note that the following list refers only to Canadian dollar accounts. If you have a U.S. dollar denominated account, it is not covered by the CDIC.
Deposit Types
Savings and chequing accounts GICs or other term deposits, as long as the original term is 5 years or less Money orders, certified [...]
Read on and enjoy … What Is the Safest Investment?
By 2 Cents on February 2nd, 2010 | Category: Planning | 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.
The C.D. Howe Institute recently released a study entitled Saver’s Choice: Comparing the Marginal Effective Tax Burdens on RRSPs and TFSAs. As we noted in RRSPs: Who Needs Them?, the cardinal rule of RRSP investing is that they work best if your marginal tax rate when you put the money in is higher than it will be when you take it out. The [...]
Read on and enjoy … TFSA vs. RRSP Duel: Who Wins?
By 2 Cents on January 29th, 2010 | Category: Book Reviews | People on commission cannot be trusted.
~ David Trahair, Enough Bull, p. 121
This book came out in August of 2009. By that time, the market tailspin had finally subsided and many investors have since felt comfortable diving back into the investment pool. David Trahair would probably advise against that.
This book was billed as “the one book your bank really does not want you to read”. When you understand Mr. Trahair’s position, you can see why. Many of the ideas he proposes in this book would be considered sacrilegious in many circles, including some parts of the personal finance blogosphere, and of course, the financial services industry.
My first impression was that Mr. Trahair’s views were a little too extreme and that the book probably wouldn’t even have been published if it weren’t for the panic instigated by the financial crisis of 2008-2009. The thing is, [...]
Read on and enjoy … Book Review: Enough Bull
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