5 Massive TFSA Mistakes to Avoid in Canada!

[@WealthAwesome]

Check out my blog post about this topic here! wealthawesome.com/tfsa-rules-tfsa-mistakes-to-avoid/

[@alanruhland2489]

When I first opened my TFSA in 2009, they didn't tell me that investing in stuff like mutual funds was an option. I was given the impression that cash was the only investment option they were offering. A few years later, an investment person at the bank suggested GICs, but didn't mention mutual funds.It wasn't until 2017 that they told me mutual funds were an option.

[@WealthAwesome]

Yeah that's mistake number 1. Check out ETFs, I prefer them over mutual funds.

[@alanruhland2489]

@@WealthAwesome I'm in mutual funds now, thanks to an advisor. Doing decently well too.

[@geraldineb.9204]

Same here.. Call your banks and explore whether your money is invested, worst is mostly they just let it sit on a Savings account 😢😢

[@tribukahu9335]

@@geraldineb.9204 Hey ara ka man d?..lol..jimboy

[@geraldineb.9204]

Haha.. Stress reliever ko ni Jimb.. Lol

[@glenpreece]

So true I never knew this until I started watching videos about using wealth simple etc

[@WealthAwesome]

Glad to hear you enjoyed the video

[@kapapage]

Very helpful video. Although finances are typically a boring topic you covered the important topics quickly and efficiently and made the whole video much more enjoyable to watch. Keep up the great work :)

[@WealthAwesome]

Glad you enjoyed it!

[@leoyuan3f]

They really need to define how frequent is too frequent trading. Number of transactions per year, amount traded or something along those lines. It's kinda scary how they leave it vague then can choose to screw you when they feel like it. Obviously I'm not gonna hold my stocks for months at a time when I should be ditching them nor am I gonna not jump on good buying opportunities just cause I'm afraid that's gonna be "too frequent". I just wanna follow the very basic strategy of buy low and sell high without fear of getting harassed by the CRA.

[@WealthAwesome]

Yes I wish they would define strict guidelines also!

[@FS02012]

Best is to mix it up, out some in rrsp, tfsa, and regular cheqing acc.

[@alaadekhili9229]

I think it's less about volume and more about purpose. TFSA is made for investing long term not trading. from what youre describing, it sounds like you want to trade. Though unless you buy and sell every day, you should be fine.

[@CharisMaggieTV]

I think the tfsa is named that way on purpose. When ppl save money on banks, it’s a win for them cuz they can lend out our money at a higher rate. The more ppl investing isn’t really a win for them

[@WealthAwesome]

That's an interesting point! Thanks!

[@BC-yd6dl]

I think you meant “create money out of thin air.”

[@suusfaria529]

Rehypothecation

[@FranEJ]

Loving your content. This is my first video of yours.

[@WealthAwesome]

Welcome aboard! Glad you like my content

[@NTaylorFitness]

Good information. You might also want to mention US stock dividends will be taxed, but US stock growth won't.

[@WealthAwesome]

Very true! That's a hidden one many Canadians aren't aware of

[@user-dv8bs7tb5c]

Really?! Wait. So how are we supposed to report the dividends?I had no jdea

[@user-dv8bs7tb5c]

Nevermind i googled it, the tax is take off at source before you get it...easy peasy!

[@robertpearson8798]

I opened a TFSA several years ago and deposited a small amount of money in it but never made any further contributions, choosing instead to contribute to my RRSP's because it's easier to do through payroll deduction. I just recently learned that unused contribution room in TFSAs accumulates year to year like it does in an RRSP. At some point I'll be receiving inheritance money and should then be able to deposit a portion of this into my TFSA up to my limit so I can build some tax free retirement income. This makes me glad I opened one in the first place. We'd all be a lot better off if some sort of financial planning education was offered in schools when we're still young and can take full advantage of it. They concentrate on teaching us skills we need to earn money but give us virtually no knowledge of how to manage it.

[@WealthAwesome]

That's a good plan Robert! But it doesn't really matter when you open your TFSA, you could have opened it later and have had the same contribution room available.

[@robertpearson8798]

@@WealthAwesome Does that mean my Wife can have the same contribution room as well if she opens one this year?

[@zeetheprincesswarrior]

@@robertpearson8798 yes it is from the age of 18 until your wife’s age, multiplied by 5-6k per year! (If I am correct)

[@zeetheprincesswarrior]

@@WealthAwesome hey, just wanted to make sure, so if a person is born in the year of 1996, and they are 24 years old, does that mean they are allowed to contribute up to $36,000 (for simple math let’s say if the contribution per year was 6k)...just confused if I am only allowed to put 6k and that’s it, or is it the contribution room per year multiplied by the amount of years between 18 to current age?

[@KyleBaran90]

Wish they were more clear on #5. Though, I can't see that holding an equity for 1-6 weeks could be considered day trading, especially if you only do a handful of trades in a month.

[@WealthAwesome]

Yeah I wish they had clear guidelines also on that!

[@arlyngasang5967]

Thank you for the advices! And I like your "TFIA" (make more sense) than the TFSA term..

[@WealthAwesome]

Glad it was helpful! Yeah the government dropped the ball on that one!

[@arlyngasang5967]

Just got an email from EQ Bank today, they again decrease the interest rate for Savings Plus Accounts and TFSA all down to 1.25%!!!! What's your best thought about this?

[@katiehicks9920]

Your TFSA contribution room is also available online through your MyCRA account.

[@WealthAwesome]

Hey Katie, yes it is, but it's not always accurate which can be frustrating. Always track it carefully yourself as well!

[@CKyAwol]

4:52

[@mi7chgo]

Good content for beginners. If you're just starting out with TFSAs you should definitely understand these.

[@WealthAwesome]

Glad you think so!

[@rajivhs9737]

I wish I saw this 3 years ago. Too bad the banks don’t like to give this information upfront. I wonder why that is? Hmmmmmm

[@WealthAwesome]

Yes there's a lot of misinformation from the big banks. They want you to deposit into their savings account at a low rate, so they can lend it out at a much higher rate.

[@jaybino3918]

@@WealthAwesome I have let's say 60 thousand, in my TFSA, I want to take out 7grand. I go to the bank and do so.. now do I owe that 7 grand back or no?

[@rajivhs9737]

@@jaybino3918 You do not owe it back. But you can’t deposit it back into the account till the following tax year. So if you take out 7g this year, your limit for next year will be 7g plus whatever CRA says is the deposit limit for that year.

[@a.l.8618]

Because they don’t care. All these products are designed to this who can spend the time knowing all of this. Otherwise, ride a bike, paint a picture. Do anything but participate in this shit.

[@OrangePop-q2y]

I shared this video to all of my hard working friend~

[@WealthAwesome]

Thanks so much!

[@witmal99]

My favourite strategy is to sell covered calls on the stocks (US account) that I am holding in my TFSA account.

[@WealthAwesome]

That's a good strategy!

[@rutamesfin7431]

What does that do

[@alicegiang8327]

What kind of stock u buy to do the Covered Call on?

[@witmal99]

@@rutamesfin7431 it generates an extra income similar to dividends. With the right stock and strategy, you can bring an extra money basically every month but first, you have to know what you are doing. Be careful.

[@witmal99]

@@alicegiang8327 as I mentioned above I have a US account. My favourite stock to trade around and sell covered calls is AAPL. I also like, TWTR, WDC, SNAP, MU. Trading options is kind of complicated so please educate yourself first before you do anything.

[@medgolly7342]

Excuse me we have been told to always have at least 3 to 6 months saving for emergencies or a rainy day fund !

[@WealthAwesome]

Yes that's true, but I keep my emergency fund separate from my TFSA to keep that distinction between saving and investing clear. Also, the TFSA is a poor choice to hold emergency funds, because if it truly is an "emergency," you can't access the TFSA funds right away. It usually takes a businessday or two to withdraw the money into your bank account.

[@tedpark6814]

@@WealthAwesome Thanks, great video. You're right, emergency funds are exactly that, and should be reasonably accessible. We keep ours in a separate account, different from our investment savings account, which accumulates money and we transfer out to investments, and the TFSA accounts which are investment accounts. I suppose it might be possible to minimize money in banks and use line of credit or credit cards and repay by liquidating non-RRSP investments.

[@rs4619]

Another point that I ended up paying penalties on....if you are a non-resident living in another country, you cannot contribute to your TFSA....

[@WealthAwesome]

Yes that's true, it's not as common though so I didn't include it on my list

[@joshuasmith2814]

"Anyone who has had some decent ‘wins’ in their TFSA - especially large ones - are presumed to be carrying on a business" - in case you actually made some money, CRA will always take their cut (so typical).

[@WealthAwesome]

Hey Joshua, they won't always penalize you for overtrading and making investment income, but if it's a large enough gain they will probably review it at least.

[@Pantomath.]

Loving the Canadian content❤️🇨🇦❤️

[@WealthAwesome]

Thanks! Glad you are liking it

[@robarandjelovic4068]

Nice video! Since I only recently became eligible for the TFSA because I just moved back to Canada, my fund wasn't that large and I figured I'd put it into cash to maintain my flexibility. Now that the total is getting fairly substantial, I'm going to heed your advice about moving the funds to a better vehicle. Cheers!

[@WealthAwesome]

Hey Rob I'm glad my video helped! That really makes me happy to hear

[@YuriyGapon]

The lack of clarity from CRA around #5 is very confusing. Not that I personally plan to day trade in TFSA or any other account. CRA should define clear rule around what is considered day trading. For example, any returns on assets sold within short term (30 days whatever) are taxable. Or based on frequency or total amount of gain, whatever that could be but something well defined.

[@WealthAwesome]

I agree, from the comments section in this video it's been the most controversial point. I wish I could give a more concrete answer to my viewers but I just go by what the CRA has said in the past.

[@thespiritsafe]

I would add using a TFSA to save for a downpayment. Better to use an RRSP and use First Time Homebuyers plan.

[@WealthAwesome]

That's a good one, thanks!

[@ahsannizami5727]

Thanks it was very educating for me.

[@WealthAwesome]

Glad it was helpful!

[@thebreadwentstale]

Great video my man! Thank you! The GME train and all my tendies are in my TFSA. I had no idea what a TFSA was to begin with haha. New subscriber right here! 💎💎🤚✋🚀🌙

[@WealthAwesome]

Hahaha. Be careful, if you make a million from GME the CRA might come knocking on your door!

[@thebreadwentstale]

@@WealthAwesome you wouldn't have the number for a Cayman Island banking institution off hand would you? 😂

[@mnsoyan]

@@WealthAwesome But if he holds GME for weeks, that is not day trade so shouldn’t he be tax exempted?

[@crush42mash6]

What do you think of MIC’s? You can put in your cash and they will take it as a collective for mortgages and you can get a 12 to 15% return. That’s what I’ve been told, looking forward to your opinion

[@WealthAwesome]

I have a blog post coming out about this soon on wealthawesome.com, just doing research on them now, so subscribe to the newsletter for updates

[@andrewtam3185]

the example about having credit card debt and TFSA (equal amounts) at the same time - the drawback is well understood by many. Under normal circumstances, that argument is valid. However, personal financial priorities over investment should be the determining factor and prioritization and risk/cost tolerance is very subjective. If i don't have a lot of cash but want to ensure liquidity ( sudden needs which require cash right away), the approach (having credit card debt and TFSA (equal amounts) at the same time) is a viable option. the loss your refer to can be very tolerable for those people to have their peace of mind, if they can afford to slowly pay down/off the cc debt (regular income) while maintaining liquidity for sudden or emergency needs (instead of re-accumulating cc debt ie.. paying off/down and withdrawing again to meet sudden/emergency needs as there are a few limitations to cash advance for credit card users , e.g. daily limits, etc). However, your argument holds true if the person does not have regular income - better pay off / down, otherwise the person will be draining his/her limited financial resources

[@WealthAwesome]

Hey andrew yes good point. But having emergency cash for liquidity in your TFSA isn't great, because it takes time to withdraw the cash, (sometimes a few business days) so it's likely they would use a credit card or something anyways if they had sudden liquidity needs.

[@andrewtam3185]

@@WealthAwesome not all banks/accounts, e.g. TD allows instant, online withdrawal (TFSA savings only, not TFSA GIC or mutual fund), but not with another bank where i also have TFSA (quite conservative in my humble opinion lol). i guess the person has to know very well his or her situation (e.g. annual limit) otherwise may incur overcontribution problems you mentioned. TD bank defers to the user to make the decision - like "it's your call" kind of approach -- which I think is reasonable. One will get that kind of messages when withdrawing online

[@andrewtam3185]

@@WealthAwesome But i do like your approach to this topic here: short and sweet, clear and targeting scenarios with examples, and NOT misleading - unlike another youtube on TFSA: this headline is how you can transfer RRSP to TFSA without paying tax (with-holding tax of course). I am not a CFP but do know this area quite well and was curious about what I miss/don't know, so i "clicked" - turned out he was saying one can withdraw TFSA and RRSP but create another mortgage account....offers you opportunity to avoid tax (I didn't even listen the whole message LOL) - i know what he is getting at but that requires very specific conditions to make one eligible for such "benefits", honestly a long shot! By using misleading headlines, yes, he might have earned my click, but not my like! Your straightforward approach is appreciated here

[@ChancePike]

Wealthsimple all the way bro

[@WealthAwesome]

I always recommend either Wealthsimple or Questrade for a discount broker, depending on what your investment needs are.

[@huejanus5505]

My portfolio is set at 25% higher income and 75% more conservative. I’m 61 and hoping to retire in 1 to 1.5 years. My riskier investments are in my tfsa and my conservative investments are in my rrsp. This way if (and hoping) that any big money gains will be available tax free.

[@WealthAwesome]

Sounds like a solid plan! You sound like you've been well educated on how the TFSA vs RRSP works.

[@alicegiang8327]

I am same age and same portfolio as u. I find it difficult to invest in the choppy market

[@francoislepine4698]

This is probably semantics...but in my mind "higher income" ARE conservative stocks...the kind that pay dividends...as opposed to no dividend, growth stocks. While everybody is averse to paying tax I would caution anybody to not let this goal become all encompassing to the point of excluding all other considerations. (Having ALL your "riskier" investments in a TFSA is WAY too risky for me!) With an RRSP you have already gotten a tax deduction and the returns realized in your plan have been tax free. When you start to withdraw funds for income in retirement you will be doing so at a presumably lower rate than you are paying now. As a "for instance"...I'm 71...I have three sources of income: OAS, CPP and a RRIF(converted RRSP).....My total tax bill was only 7.5% I'm not going to worry or lose any sleep over that! As a lawyer friend used to say: "There is nothing wrong in paying tax...IF you've got the cash to do it."

[@mauragarey7316]

Great video. Would love to see some videos about finance 101

[@WealthAwesome]

I made a video on how to start investing in Canada, you might want to check it out

[@cheynebest7028]

Good video! But your right hand seems left out. Hope you all were able to take advantage of the deals this march. Almost could mark it on the calendar from last year. Cheers

[@WealthAwesome]

hahaha very observant! I had a beach volleyball injury at the time on my right hand

[@cheynebest7028]

@@WealthAwesome that's no good

[@cmstilllearning4418]

Good job! Really clear explanation. Keep it up!

[@WealthAwesome]

Glad it was helpful!

[@LayoWills]

Great video! Please make more TFSA videos!!

[@WealthAwesome]

Thank you! Will do!

[@KaySeminomadic]

Great points. Thanks for sharing.

[@WealthAwesome]

Thanks for watching!

[@bradmanmisera2689]

Great video that you put together and I happened to get guided too. Canadian content too!!

[@WealthAwesome]

That's awesome! Thank you.

[@BusterDarcy]

Thanks for this, would love to see a comparison of TFSA and RRSP as retirement investment vehicles. If you went all in on one or the other (and reinvested your tax refund for the RRSP), which would leave you with more money to live on throughout your retirement?

[@WealthAwesome]

Hey i haven't made a video on this, but I wrote a blog post about this here: wealthawesome.com/tfsa-vs-rrsp-2020-5-simple-steps-to-max-out-your-after-tax-income/

[@cryousflinn4479]

Since TFSA withdrawls are tax free, they are not included in income tax. Thus you can get more from income means tested government programs.

[@createone100]

Much smaller limits on TFSA.

[@cryousflinn4479]

@@createone100 That depends on how much you make. If 18% of your yearly income is less than the TFSA yearly increase, you could have a bigger TFSA than RRSP.

[@alanruhland2489]

Assuming that your marginal tax rate is the same at the time at withdrawal as it is at the time that you contributed, and assuming that no other factors are involved, such as income-tested benefits, then there is no overall difference between a RRSP and a TFSA. However, you have to take into account the effect of the tax refund when you make the contribution, and the tax inclusion when you make the withdrawal. Hypothetically, let's say that you have $10,000 in your bank account. On February 28, 2021, you contributed $6,000 to a RRSP. Two weeks later, you file your tax return. Let's say that your marginal tax rate is 25%. By the end of March, you get a tax refund in connection with this contribution. This will be equal to 25% of your RRSP contribution, or $1,500. So if you contribute $6,000 on February 28, then you'll have $5,500 in your bank account (assuming that other deposits and payments from your bank account cancel out). Now let's say that, on February 28, 2021, you make a $6,000 TFSA contribution. By the end of March, you have $4,000 in your bank account (assuming that other deposits and payments from your bank account cancel out). Then look at what happens when you make the withdrawal. Let's say that you make the RRSP contribution of $6,000. By the time you withdraw that amount, it has doubled to $12,000. Assuming a 25% marginal tax rate, you'll pay income tax of $3,000. So when you make the $12,000 withdrawal, you'll only be able to spend $9,000 of it. But if you make a $6,000 TFSA contribution, and it has doubled to $12,000 by the time of the withdrawal, then there will be no tax inclusion when you withdraw the money. You'll be able to spend all $12,000. So a $6,000 RRSP contribution is not the same as a $6,000 TFSA contribution. But now let's change the scenario. On February 28, 2021, you have $10,000 in your bank account. You contribute $8,000 to your RRSP. You file your taxes soon after. You'll get a refund of 25% of that. By the end of March, assuming that other deposits and withdrawals from your bank account are the same, you have $4,000 in your bank account - which is exactly what you'd have in your account if you contributed to a TFSA instead. By the time you withdraw the money from their RRSP, it has doubled in value to $16,000. You get tax inclusion. You'll pay tax equal to 25% of that $16,000. So, of the $16,000 you withdrew, you get to spend $12,000. In other words, in the scenario I've set out, an $8,000 RRSP contribution leaves you just as much in your bank account (once you've gotten your tax refund) as you'd have had if you'd made a $6,000 TFSA contribution. Meanwhile, once you make the withdrawal from the RRSP, then after paying your taxes on that, you'll have just as much in your bank account as if you'd made a $6,000 TFSA contribution instead. What complicates things is changes to your effective marginal tax rate, but this reply has already gone on long enough and I think that I've established my initial point. Take in mind, however, that I'm not a finance guy. Don't rely on anything I've said until you've gotten confirmation from an actual professional.

[@josephwilliams2604]

Great vid Chris! In the spirit of your (surely?) Graham Stephan inspired thumbnail I am commenting for the youtube Algorithm.

[@WealthAwesome]

haha thanks! no not graham stephan actually it's more Charisma on Command that I was more going after :)

[@sonnymendoza9654]

You need to educate yourself. This is thought in finance in MBA. Not from stephan graham. Stephan graham did not invent financial mgmt. Its there he only vlogged it so he can earn money from people like you who dont know

[@sonnymendoza9654]

@@BeNachos i cant read what you wrote

[@antonyall]

Excellent presentation sir.

[@WealthAwesome]

Glad you liked it!

[@jin-hahwang7435]

Amazing video very informative!! Thank you I just subscribed!!

[@WealthAwesome]

Awesome! Thank you for the support! Check out my blog also if you like my content :)

[@ElenaWalks]

Very informative, thank you :)

[@WealthAwesome]

Glad you enjoyed it!

[@archsilber6482]

Great content, WA!

[@WealthAwesome]

Much appreciated!

[@michaele1278]

How the hell does the CRA know how much time you devote to research? Who the hell do they think they are?

[@WealthAwesome]

Haha I think it mostly means if they see you're unemployed or hardly working elsewhere and making a lot of trades, then obviously you're devoting a lot of time to trading and research.

[@michaelattallah6765]

CRA is never accurate

[@KyleBaran90]

@@WealthAwesome One would think that putting time and research into a good investment would apply to anyone, not just day traders.

[@tessiechanp]

7:06 He is telling you

[@michaele1278]

@@WealthAwesome Well the number of trades is no indicator of amount of time invested in research. Lots of fools make many trades and didn't do anything, but go with a feeling or a lucky guess. I could spend weeks researching a handful of securities and make a killing. All done with few trades.

[@kareshi2k]

if CRA tax me when I have gains with overtrades, they should allow me to claim capital loss when I have net loss with overtrades.

[@WealthAwesome]

That is a good point, I hope they are more clear on the rules one day!

[@cbar6537]

Hello question I have. I was under the impression as long as the money stays inside the TFSA you can make a large profit on a stock and sell that, reinvest with all that money in the same year

[@WealthAwesome]

You are correct! You just can't withdraw it from your TFSA, then contribute it back again the same year

[@cbar6537]

@@WealthAwesome thanks so much for the quick response!

[@tedholly6178]

It may be a huge mistake however we all need something to fall back on if we are unemployed or sick a saving is needed to prevent being homeless especially if your a single man no safety net like there is for women !

[@WealthAwesome]

Haha thanks Ted! I’m not saying don’t save money it’s more of a mentality shift to use your TFSA for investing first and if you must save with a high interest savings account

[@a.l.8618]

If there are mistakes to be made that will negatively impact wealth, why even take the risk. This is why monetary products should be illegal. Imagine if your dishwasher was this hard to operate?

[@WealthAwesome]

I understand your frustration, but unfortunately, that's the way life is. No risk, no reward in most cases. Everything carries risk, from your career choice, investments, relationships. It's about getting educated and making the best calculated risk that you can.

[@jonisousa-guthrie3121]

How often is too often when it comes to trading within the TFSA ? Just found your channel and learning a lot. Thx

[@WealthAwesome]

Hey Joni, unfortunately there aren't any hard rules that the CRA has posted of an exact amount of trading that makes an account overtraded. I would suspect that several times per month, or even per week is ok, but constantly trading in and out of positions daily or weekly could set off some red flags for the CRA.

[@jonisousa-guthrie3121]

@@WealthAwesome thank you. 👍🙏

[@citaagustin1890]

I think Jim Flaherty is the one introduced the TFSA

[@WealthAwesome]

yes his government introduced the TFSA, but I believe Kevin McCarthy is the one who named it!

[@thefozzybear]

Inflation is not at around %1.5-%2 which the Feds want you to believe. With the Feds printing money, it's more like %5-%6, just look around you and what is the cost of living now? This is why more people need to invest and not save.

[@WealthAwesome]

thanks, I agree that people should invest more!

[@MrBeatboxmasta]

I read the title as: 5 Massive TESLA mistakes to avoid in Canada. 1 minute into the vid, I would like: Why is he talking about savings?

[@WealthAwesome]

Haha yeah I guess TFSA is pretty close to TESLA

[@MrBeatboxmasta]

@@WealthAwesome It's more about the fact that's I've been watching a lot of stocks vids and of course Tesla keeps being mentioned. I also watched a vid about what Tesla needs to do to improved quality, before landing on your vid. :P

[@warrenbrockett2414]

Sorry I disagree with your advise. You should balance your credit card usage along with selective loans from other sources to boost your credit score. This is just bad advise. You want to purchase property along side your investments as an additional investment. The long and short of this means lower intrest rates due to high credit scores means a more balanced portfolio in the long term. Dont make short term decisions like this, think long term with TFSA due to compounding interest over 20+ years

[@WealthAwesome]

Thanks for your input Warren! I was mainly trying to say don't hold any high-interest debt with credit cards before investing in your TFSA, but I agree with your property and long-term approach

[@Chris-yi9gc]

Any idea of how many trades would be considered too many? Great video

[@WealthAwesome]

There's no set rule, the CRA evaluates it on a case by case basis. But overall I would say they are pretty fair.

[@robertpearson8798]

@@WealthAwesome So the rules are arbitrary and made up as they go along. Sounds like typical government at work.

[@jimmywkwan1]

Great video. Keep up the great work))

[@WealthAwesome]

Thanks, will do!

[@rayspencer7255]

You are also allowed to purchase Option contracts in both your TFSA and RRSP.

[@WealthAwesome]

Yes, you can purchase options as well.

[@alicegiang8327]

I am not sure if u can sell puts. It would be great to do the Wheels strategy

[@rayspencer7255]

@@alicegiang8327 Purchase only, Calls or Puts .Spreads are not possible. I have leap Calls in Tesla in my TFSA & RRIF . So far so good.

[@alicegiang8327]

@@rayspencer7255 I have not learned how to do the Leap yet.

[@alicegiang8327]

I am not sure if I can open the RRIF

[@ginadoldolea8043]

I don't use banks for my TFSA. Banks use mutual funds. Segregated funds is the best where there is bigger returns than a 1.5%. This is the reason I sit down one on one to people using zoom to show them their options. Financial education is a need for each individual.

[@WealthAwesome]

Segregated funds have extremely high fees, and I don't recommend them in most cases because of that. It is good for certain things, such as bypassing probate and creditors but those are rarer cases.

[@ginadoldolea8043]

I would love to invite you in one of our session. Let's learn it together. There is other way to by pass that probate. It depends on what company you work. I don't work in the bank. I am licensed too and I work with different companies.

[@ericjjohnston1]

Mistake #6 making your spouse a beneficiary instead of successor. They'll be horribly disappointed in you when you kick the bucket.

[@WealthAwesome]

Yes that's a good one also!

[@yanivmedia3309]

great video. thank you. keep it up.

[@WealthAwesome]

Thanks, will do!

[@tundeolowookere9670]

Hello please I already made a mistake trading and putting alot on my tfsa and last year is my first mistake what can I do now?

[@WealthAwesome]

You might be ok, call the CRA to make sure, you might not have went over your limits

[@someoneelse.2252]

Good points. Thanks.

[@WealthAwesome]

Thanks for watching!

[@g59490155]

Hey dude, I have 500 bucks in my Wealth Simple TFSA, what's considered to be a frequent trade? 10 per day? 10 per month? Like what's frequent in their mind? That said, 500 bucks is nothing even if you did frequent trade?

[@KeiraR]

I'm in the same boat. They are super vague with what defines day trading vs what defines investing.

[@WealthAwesome]

I wouldn't worry if it's $500 in your TFSA at the moment. I have a feeling the CRA only cares if you make huge gains, like more than a couple hundred thousand in your TFSA, will they bother to take a closer look at your account.

[@mickman321]

@@WealthAwesome if you have a full time job and invest with your TFSA they can't ding you for day trading as your job is your legitimate source of income

[@freddymax5256]

About 20% of my TSFA consists of pre split Tesla shares. They have appreciated to a substantial amount of tax free worth. Can I withdraw (sell) some of my Tesla gains (shares) and replace that amount with my personal company shares, up to the value of Tesla shares I sell, that I have been making a living with? If I can are the earnings in this company tax free and will it be taxed in my estate?

[@WealthAwesome]

Good question, I had to look this one up. Types of investments states that "certain" shares of small business corporations are allowed in your TFSA. In edge cases such as these I always recommend calling the CRA as they can guide you through exactly if your corp is eligible for TFSA. If it's eligible I would assume the earnings are tax-free in your TFSA. See this CRA doc here: www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/types-investments.html

[@samueltremblay177]

got a question... saw a video saying that if you made a profit on a stock, then withdraw your initial investment and profits, you can then reinvest up to the highest value of your tfsa(before cashing out). you said if we withdraw lets say 5k, we cant re contrubute that amount because its over contributing. help?

[@WealthAwesome]

If you're at the contribution max, you would have to wait until the next year. If you're not at the max, you might be ok to reinvest that same year. But yeah you will still have that room, you just might have to wait until next year.

[@eddiewheeler5013]

Nice video man!

[@WealthAwesome]

Thanks for the visit

[@TheBrownly]

Can u explain the over contributing again. For example :- let’s say my contribution limit is 2000. I put 2000 in my tfsa account. I withdraw it after one week for something and then deposit 2000 back. If u see overall only 2000 is invested not 4000. How will that be over contributing?

[@WealthAwesome]

Because that $2,000 room is not available again until the next year (2022)

[@veronicar5504]

Why does my gf owe from her previous TFSA accounts? She just got this TFSA return back in the mail last week, stating that she owes around 5 grand for previous TFSA accounts and she has to pay in a week and a half in full and if she doesn’t they are going to add more interest. Is there any thing she can do to possibly even make payments instead?

[@WealthAwesome]

I would highly recommend calling the CRA directly, and see if you can negotiate something. Sometimes they allow for honest mistakes and might waive the penalty.

[@babakk.8166]

Great video and well articulated. Question regarding mistake #3 and over contribution. Just to be sure I understand your point correctly. If have never used any of my contribution room can I invest the entire amount in one year. Let's say that I have all 69k available in 2020. Can I invest all of that or am I still limited to 6k?

[@WealthAwesome]

Yes, you absolutely can! double check in your CRA account to make sure you have the room.

[@sz9349]

Yes it’ll say in your cra

[@DaddyDirective]

Thanks for the great info. One question, I understand that next year’s TFSA contribution is what ever you withdrew this year + next year’s contribution. Does that mean, let’s say you contribution for this year was $1000. You put it $1000 and somehow you made it into $10000 and withdrew 10000 this year. Does that mean next year, if next year’s contribution is $1000, My allowed contribution for next year is $11000?

[@WealthAwesome]

Yes, absolutely that's it. But it works both ways also. Say your $1,000 investment went to $100. Then you withdraw $100. You will only have $100 room for the next year (plus whatever the new limit is)

[@DaddyDirective]

@@WealthAwesome thank you! So i am correct in understanding that if I manage to invest well and increase the value of TFSA i can ‘effectively’ increase my contribution room that way. Nice! I just wanted to make sure. Thanks for the reply!

[@Mightea]

What is considered overtrading? Does an average of 1 trade per day for the whole year qualify?

[@JDJDJDJDJDJDJDJDJDJD]

up

[@WealthAwesome]

There are no hard and fast rules the CRA has outlined unfortunately. They evaluate on a case by case basis. The one thing I do know is that unless you are making some huge returns, the CRA probably won't care much about looking into your account.

[@hiphopheaven]

I'm so scared of investing I have zero risk tolerance it's not helping that most people lose money investing

[@navjitdhillon2725]

Hey, do you know if I can redeposit some money if I took some out? I took 1200 out can I out that back?

[@WealthAwesome]

If you're at the max limit, you have to wait until the next year. If not you might still have enough room to deposit. That's what mistake number 4 is all about.

[@theaanch]

You're awesome! (and very underrated) I'm sure you'll blow up at this rate :O

[@WealthAwesome]

Thanks! I hope so too!

[@markcameroon6613]

i am in a TFSA under select balance and am sick of it seeing it fall like you said during inflation im thinking of just doin 6 months to a year under TFSA in GIC to gargantee tax free money no risk any suggestions thank you ?

[@WealthAwesome]

sure, try EQ Bank here: wealthawesome.com/recommends/eq-bank-gic

[@ianfaulkner6870]

Great content! How about a video on RESP’s. Are we allowed to purchased American listed stocks in those accounts or sell calls? Thank you Wealth Awesome!

[@WealthAwesome]

Sure, I have RESP planned for later this year. Yes, if you open up an account with an online broker like Questrade you can purchase american stocks or options like calls and puts no problem in your RESP.

[@simo91554]

yes you can purchase us stocks, and no you can not sell call! ie you can not trade spread, only buy naked call or put, means very exposed and risky, ......stupid like CRA rules.......

[@maniadoc1]

How does CRA tell "How much time spent researching markets"?

[@WealthAwesome]

I'm guessing if the person is unemployed or part time and has made huge gains, they can probably assume they are spending most of their time researching markets and trading.

[@maniadoc1]

@@WealthAwesome I was also thinking that financial institution where we open TFSA may report to CRA as to how much time we spend logged in to their portal. They do report the transactions, so CRA could calculate contribution room for next year. Time spent may be a part of that report! Just guessing.

[@patwelch1373]

In your chart why did you leave 2009 out of the calculation?

[@WealthAwesome]

Hey it must have been a small editing error, see this updated chart on the blog post which includes 2009: wealthawesome.com/tfsa-rules-tfsa-mistakes-to-avoid/

[@lakshmanankannan2413]

Great video thank you I will be following you. Why do you prefer ETF than mutual fund. Except the time of trading is there any advantage in ETF?

[@WealthAwesome]

The one main reason is the fees are much, much lower for ETFs vs mutual funds

[@lakshmanankannan2413]

@@WealthAwesome thanks for the information. Will try to explore.

[@darkftforce]

i m confused in similar sense, i use tangerine and opened tfsa, after putting funds in it, i couldnt invest from it. it was just acting like a regular savings account. i found out that tangerine offers tfsa investment account, then i opened that, transferred my funds from tfsa savings into tfsa investment and then was able to do investments. i m still confused why tangerine is offereing tfsa savings if i cannot invest from that account? there is lot of confusion out there. initially even i thought the same way that just put funds in tfsa savings and it will do rest automatically but later found out that not only i have to put funds in tfsa but also to invest them, then i found out i couldnt do that in tangerine, i have to open a separate tfsa investment account for that. do you have any such experience or any advice on this? thanks.

[@WealthAwesome]

Tangerine has a separate investment account, and a separate savings account for their TFSA. You have to separate the two. It can get confusing.

[@darkftforce]

@@WealthAwesome thank you for your reply, so would you suggest that i close the tfsa savings and just keep tfsa investment with tangerine because what i want to do is not possible with their tfsa savings. or is there any benefit to keep it?

[@petrojaxson5470]

GREAT VIDEO

[@WealthAwesome]

Glad you enjoyed it

[@nancychartrand7808]

What about the TFSA account with tangerine ?

[@WealthAwesome]

I believe Tangerine only allows you to invest in their portfolios. If you want more flexibility to choose your investments, I recommend Questrade or Wealthsimple Trade.

[@FS02012]

I have tfsa with tangerine too...can i link simple trade with it?

[@1017208]

Thank You for information

[@WealthAwesome]

Glad you liked it!

[@TheFoxfourty8]

If you’re an individual with no consumer debt but loads of student debt while still in school, would it be wise for you to build your portfolio still? Or are you better off saving your dollars to pay it off right away?

[@WealthAwesome]

That's a great question. if you graduate in 2-4 years, who knows what the interest rates will look like then. I am guessing with yields creeping up, the interest rate will be higher than today. In that case, I would recommend paying off your student debt as quickly as possible. And since your time horizon is relatively short, I would either put your money in very low risk investments, or even a high-interest savings account to make sure your money is there when you graduate (EQ Bank TFSA is at a 2.3% rate right now, for example, which is pretty great)

[@TheFoxfourty8]

@@WealthAwesome Not sure if I should make a portfolio dedicated to paying off the debt and pulling the holdings as soon as I am done school. What do you think?

[@michaelmoreton5042]

I set up my TFSA with TD and invest in their eSeries Index Funds and some Vanguard Index etf. Both have very low fees. A little slow and cluncky in trading between Funds but not ETFs I am happy with this, Bit of a hassle setting it up but not that bad. I am unsure whether my heirs will have to pay tax on the TFSAon inheriting it. Any info?

[@WealthAwesome]

Hey Michael, check out this doc from CIBC, I believe that generally you won't have to pay taxes on your TFSA for estate transfer: www.cibc.com/content/dam/personal_banking/advice_centre/tax-savings/tfsa-holder-dies-en.pdf

[@ducktorinthehouse]

Great info.!

[@WealthAwesome]

Glad it was helpful!

[@Bill.i.3231]

Question: Im new into tfsa as of this year, and so far I invested in etfs and some stocks under "TSX". However, I also bought shares on a "shroomstock" called Numinus which is under 'TSXV". Is it ok for me to hold shares on a tsxv stock under my tfsa account or definitely a no-go?

[@WealthAwesome]

Yes, it's absolutely ok to invest in the TSXV in your TFSA! You can even invest in U.S or international stocks in your TFSA. Also, I love the name "shroomstock" haha.

[@Bill.i.3231]

@@WealthAwesome excellent! Very Appreciated 👍

[@maniadoc1]

If I withdraw only the paid dividend monthly for my budgetary needs. Will that be considered "conducting business"?

[@WealthAwesome]

This likely won't be considered conducting business, this is a very common usage of the TFSA is to withdraw monthly dividends.

[@evelynrenz8573]

Another mistake you can make is investing into something very risky, if the company goes bankrupt you’ve lost that contribution room forever!!

[@WealthAwesome]

Yes that's correct, thanks Evelyn!

[@spidythe]

Great video! I recently purchased some OTC stock "PSHZF" in USD. I just learnt that many OTC stocks are not considered qualified to be held in TFSA or RRSP accounts by CRA, but there seem to be an exception for stocks that are also traded on international exchanges that are approved by CRA as Designated Stock Exchanges. Since PSHZF (Pershing Square Holding, Ltd.) stock is also traded in Amsterdam as ticker "PSH.AS" and also in London as "PSH.L", does that mean the PSHZF stock would be acceptable to hold in TFSA or RRSP accounts? - thanks for your help.

[@WealthAwesome]

For this specific of a question, I highly recommend calling the CRA at 1-800-959-8281 they can give you an exact answer. I'm not confident my answer would be 100% accurate.

[@spidythe]

@@WealthAwesome Thanks for your advise. I will call CRA to clarify.

[@Kimuji9]

Hey I have a quick question I can't find the answer to: I would like to transfer my assets from a TFSA in a bank to the TFSA in Wealthsimple Invest. How do I do that without doing first a withdrawal and then a contribution in the same year. I believe that is mistake 4 in your list.

[@WealthAwesome]

Yes that would be a big mistake, especially if you're at your TFSA limit or close to it. Check out this article: help.wealthsimple.com/hc/en-ca/articles/360056590414 and you can also call wealthsimple and they can walk you through it. Not sure exactly how that works with Wealthsimple Invest though, so probably best to call them.

[@Kimuji9]

@@WealthAwesome really fast ! Thanks for the answer I will contact them then

[@xJay2002]

Are you able to swing trade on your tfsa? Say 2 trades a week? And even if you do day trade on your TFSA, does the CRA even look at it if you have a small amount? I heard that only people with a substantial amount of gains in a short period of time would get the attention of the CRA (100k plus profit in a short period of time for example)?

[@WealthAwesome]

Hey Julian yeah I would suspect they won't care if it's a small amount. You're right, I image it would have to be a substantial gain to catch the CRA's attention. They have bigger fish to fry.

[@monacoelho7380]

Please elaborate a bit more on your 4th point. If I withdraw 5k and put 5k back how am I over contributing? Could you please elaborate on this a bit? Thanks in advance

[@WealthAwesome]

Yeah this one is the hardest to get. If you're at your limit, the room isn't available until the next year. So if you hit your limit, then withdraw 5K tomorrow in 2021, you won't be able to contribute another 5K until 2022 without getting a penalty.

[@monacoelho7380]

@@WealthAwesome thanks for your response

[@bka2810]

I am so confused my dad opened up a TFSA account with TD and we purchased a new house so we took the money out and now he’s being taxed I am so confused

[@WealthAwesome]

Did he try to put money back in? That could be the cause of it

[@lareinerose4126]

This is great thanks! Do you also do taxes as a business?

[@WealthAwesome]

No I don’t do taxes sorry!

[@craighuntley6547]

To your dividend gains or earnings from selling a stock effect your TFSA limits? Let's say I'm at my max contribution and then I sell a stock within my TFSA does that mess things up ?

[@WealthAwesome]

Your gains and earnings don't affect your TFSA contribution room, but it increases your limits if that makes sense. So if you grow your TFSA to 1 million for example and that's your max contribution, you can withdraw $100,000, then deposit that same $100,000 back the next year.

[@kiranjyoteminhas]

What do you think about wealth simple?

[@WealthAwesome]

I think it's great! I think wealthsimple trade is one of the best trading platforms: wealthawesome.com/recommends/wealthsimple-trade

[@rice5phere]

For mistake #4: if you want to recontribute the amount you withdrew, is it safe to do so a year from when you first contributed (e.g., March 2021 --> march 2022) or can you contribute right at Jan 2022?

[@WealthAwesome]

January is ok. Weird rule right?

[@sxndhu0192]

Hey what if we only buy shares in tfsa daily but not selling will there be any penalty?

[@WealthAwesome]

Likely not, but that's a pretty unlikely scenario. Why would you be buying every day?

[@sxndhu0192]

@@WealthAwesome I love buying stocks daily I dunno why it’s kinda becoming my hobby

[@maretesa]

Hey thank you for the video! If you log into your CRA account online, scroll all the way at the bottom of the home page , it will show how much your contribution is, I don't know if this is useful info, but just wanted to put that out there. Just liked and subbed!

[@WealthAwesome]

Thanks Maria! My next video is actually going to be about this very same thing, how to calculate your TFSA limit and the 2021 updates.

[@sophiam3730]

So you cant max out your total contribution room, but you can max at that years contribution room?

[@WealthAwesome]

You can max out your total contribution room, but if you withdraw some, you have to wait until the next year to contribute again

[@6XxDJxX9]

@@WealthAwesome So let's say I maxed my limit and withdrew $5000 this year, and next year has a $6000 additional contribution limit. I could contribute $11k next year?

[@Agold-xd3tj]

I’m so happy I discovered you channel honestly. Say if you were born on 91, what would be my contribution limit? Say if the contribution limit is xxx for example, am I allowed to deposit exactly xxx into an tfsa and invest in stocks and such? and once I do, say if my investments go up by 100%, I don’t get taxed at all?

[@WealthAwesome]

That's exactly how it works! You won't get taxed on your gains. If you were born before 91, then your contribution limit would be $75,500. Check out this video of mine for more details: kzbin.info/www/bejne/mpTWoJyPmtVkabc

[@mog53j19]

is options trading considered investment or business??

[@WealthAwesome]

It could be considered either, depending on your circumstances. If you're an investment bank doing options trading, that's definently business income. If you're just a normal guy buying options once in a while it's probably not business income.