TFSA or RRSP - The Decision Tree for INVESTING in Canada 💰

In this video, I provide a comprehensive overview of the differences between Tax-Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP) and discuss when it may not be the best time to invest your money. I delve into the details of how much you should consider investing and where the best places to invest are. Additionally, I share my personal investment strategy and provide valuable insights for viewers looking to make informed financial decisions. This video is perfect for anyone looking to gain a deeper understanding of TFSAs and RRSPs and how to effectively utilize them in their investment portfolio.
Time stamps
00:00 - Intro
00:45 - When not to invest in the stock market?
02:26 - How much to invest in the stock market?
03:21 - Where to invest - RRSP or TFSA?
08:20 - What's better?
12:21 - Decision Tree: Investing!
14:42 - My investment strategy?
19:53 - Final thoughts
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MORE ABOUT ME 👇
My mission is to provide you with actionable content that enables you to build your wealthand live up to your potential. I came to Canada with my wife (Simran), during the pandemic in 2020, started with very little money, no job - to today, where I recently quit my job after building my side hustle to a cool 6-figures in revenue. I have met so many amazing people and mentors along the way, and I want to bring everything that I have learnt and continue to learn to you via this channel.
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
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[@donaldgaff2271]

Big ups to everyone working effortlessly trying to earn a living while building wealth. I’m 50 and my wife 44 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle made it possible for us this early even till now we earn monthly through passive income.

[@Alexedmartin.]

Nice one .Any investment tip? I would love to know how you made it this far

[@donaldgaff2271]

@@Alexedmartin. Alright so generally, investing requires higher knowledge. For this reason, It's important to have a solid support structure (financial consultant) to guide you through especially in asset picking. I operate with (REGINA LOUISE COLLARO) an investment advisor who partners with a licensed wealth management firm. For the record, the experience has been the best for my finance. She is quite popular for her services so you might have heard of her. She made me financially stable investing through her help, now I earn on a monthly basis through her passive income strategy...So I’ll advise you do get a good Investment advisor for yourself.

[@Alexedmartin.]

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[@donaldgaff2271]

@@Alexedmartin. look her up on the internet and leave her a message she's quite popular for her services as she was recently featured on cnn. She can work with anyone irrespective of where their located

[@emeldcentor1474]

@@donaldgaff2271 I have had the intentions of starting investing. But I always thought it was late and I think I need to stop procrastinating. I will definitely 🔍 Regina Louise Collaro and see what she can advise .Thanks a lot . This was of so much help to me .

[@bhalinderpalchahal]

Hi Navjot, do you invest a set amount in each individual Canadian fund you mentioned? or you just invest 25% in each?

[@dilipravikanti]

Thank you for such a great video, it's very informative

[@Hi-kt8jg]

Thank you soo much for sharing lots of information and personal strategy which is brilliant and no one does. as I'm new immigrant this video and all the other videos in your channel is very informative...I hope world has more people like you sharing knowledge for others success😍😍😍😍

[@growwithnav]

Thank you 👏👏

[@madhuriarora8991]

Awesome video!!!!!!!

[@nitishkammyvlogs]

which tool you use for video presentations?

[@akhere4279]

If you dont take moneyy out of your incorporation, then what to do money inside incorporation? Are you buying real estate on your incorporation name or you are buying whole insurance or what to do to get money used inside incorporation now or in future?

[@anima2020]

Great video. What would be your reason for not investing in the Indian economy, given it is a faster growing economy.

[@lookingforwardto]

Nicely described. Should new immigrants go for FHSA first or any thing else?

[@vancouverdiaries738]

Thank you GURU!

[@growwithnav]

👏👏

[@vancouverdiaries738]

@@growwithnav Two days more to invest in RRSP for this year, BUt curious if I need to invest in RRSP or wait for the first-time home buyer savings account to start? First time investing in both! Salary range is between 70-90k a year!

[@AHMEDALI-uw4hr]

Navjot, please, if possible, also make a detailed video on IUL and Whole Life insurance. Basically on becoming your own banker

[@MohaPlaban]

Cash deposit allowed in TFSA account?

[@tarunnavlani]

Good one. Thanks for the video. I have a question. Do you invest into personal account from your own corporation or you have holding corporation added under your main corporation and you invest via holding co. ?

[@growwithnav]

Right now via Corp, but will change it to hold co setup from next month.

[@tarunnavlani]

@@growwithnav yeah.. i also need to float holding co for investments and real estate. Specially there is a capital gain exemption. Of 880k under a corporation

[@siddhantnaik]

Thanks for the informative video. Does your employer match in the RRSP also count towards the RRSP room or only your contribution count towards the RRSP room ? Thanks

[@growwithnav]

Both contributions make the RRSP room

[@jayantarora5934]

Can we take out DCPP amount while purchasing 1st time house if yes what's the limit ?

[@pjm3005]

no. a dcpp is NOT an RRSP.

[@KJ.18]

Sir i bought tata stocks in NYSE and they delisted it in wealthsimple. How to sell it ? Please reply 😢

[@growwithnav]

Call Wealthsimple and check

[@danialhassan1691]

Great Video Navjot Very informative Is this strategies applicable only in Canada or whole in North America ?

[@growwithnav]

Actually it’s similar (but not 100% same) RRSP = 401K TFSA = Roth IRA

[@ravneetbawa5164]

Amazing video, you made it so easy to understand for a new person

[@growwithnav]

Thank you 😊

[@GAURAVCHHABRABCE]

I invested in NREG non registered account for my first year in Canada is that different from TFSA??

[@growwithnav]

Yes it is different… you are taxed on capital gains on NREG when you take the money out.

[@GAURAVCHHABRABCE]

@@growwithnav meaning the limits I have on TFSA are separate from NREG

[@RHFactory]

Can a person on closed work permit is eligible to open RRSP account in canada ?

[@growwithnav]

Yes you can. You just need to complete 1 tax cycle first

[@RHFactory]

@@growwithnav thanks for your reply . I came up last year in august ,2022 and now my new cycle started up from jan ,23 , did you mean my first cycle is completed ? Thanks!

[@jaydeeppatel7962]

What if we withdraw before retirement from tfsa? It will be taxed?

[@pjm3005]

no.

[@ra24ra1]

Thanks Navjot, any suggestion on Tax or finance consultant who can help for tax filing etc.

[@balpreetkaur4288]

if our income ia near about 40 k in a year shoyld we still invest in rrsp on low income ?

[@growwithnav]

Not for tax purposes. But if the employer is matching, then why not

[@balpreetkaur4288]

@@growwithnav my employer is not matching so i should not invest ? tax saved by investing in rrsp i can invest in tfsa ?

[@pjm3005]

@@balpreetkaur4288 no employer match? then invest in your TFSA. your income isn't high enough to make rrsp worthwhile.

[@abhiketgaurav293]

Hi Nav, great video. I am a new immigrant to Canada. I am 36 years old and moved in 2021. I have never contributed to TFSA or RRSP. Can you guide me as to how can I calculate my contribution limits as of 2023?

[@saurabhbabbar2631]

This is amazing!! Thanks for sharing great content!!!

[@growwithnav]

👏👏

[@CanadaTop5]

Hi Nav I had a RRSP account with TD bank and pulled the money out when I purchased the first house. Now I am contributing to the RRSP through sun life which comes as part of my new employment. My question is do I need to put money back to the TD’s RRSP account or I can put in any RRSP account for the next 15 years.

[@abhiketgaurav293]

You can put in any RRSP account. Saw this on other video

[@pjm3005]

bro, did you tke money out of your rrsp through the Home Buyers Program? if so, YOU ABSOLUTELY, 100% HAVE TO REPAY THAT MONEY WITHIN 15 YEARS or you owe taxes on it...

[@eiramshaikh]

Being a new immigrant in Canada , a person will not be able to create RRSP account right !!! so in that case, where should the person put his/her money in order to reduce the taxes , considering that the amount can be used for buying the first house, which is otherwise possible in case of RRSP account for the person who has filed the taxes in the first year. So basically, I want to know if there is any alternative to RRSP account . (Note : TFSA is not a solution to me as i won’t be able to use it for my first house ). I would truly appreciate your response .Thank you

[@201kirti]

Very informative video 🙏 specially for new immigrants. Thank you

[@growwithnav]

👏👏

[@jamesohearn]

Hi Nav. I enjoyed your analysis, however I think there is an important calculation you may have missed. When it comes to RRSP matching, I would argue that it is always better to aim for the "Full Barber," that is aim for 10%. If the matching is less than 5%, it is better for you to make up the difference. If the employer offers you 1%, you put in 9%. The reason for this is because the deduction from income would come prior to the calculation of gross (taxable) pay, not after. This is important because it means that your overall level of income is amplified. For example, let's say you make $4000 biweekly. After CIT, EI, and CPP, you are left with around $2800. If, however, your employer offers you 1%, and you add 9%, that 9% ($360) is deducted from your taxable income, and after CIT, EI, and CPP are deducted, you are left with around $2600. While this is $200 less than what you previously took home, you also have a $400 contribution to your RRSP (1% + 9%). Combined, your income is $3000. If you had stuck with the strict matching (1% + 1%), your take home pay would be a little less than $2800, plus $80. In effect, by leveraging the deduction in taxable income, you are giving yourself a 4% to 5% raise.

[@growwithnav]

Sure, that’s how you can optimize your RRSP.., but honestly , I am not a huge fan of over contributing to RRSP. 1. High probability of much higher tax brackets on retirement - it’s putting your fate in the govt’s hand 2. Most people who do well in their working years and build assets would have same / more income on retirement :) That’s why, I like maxing out TFSA first and then contributing more towards RRSP… which is there in the final step on the decision tree. Just my $0.02 😀

[@jasminderpalsinghsehgal2169]

I think RRSP calculation is wrong or confusing! How come "After Tax income" increased? 50k-9k(rrsp) = 41k. It should be "Taxable income" and not "after tax income" Thanks

[@growwithnav]

It’s confusing as the numbers almost match. The tax is calculated on 41K but the after tax income is over 41K :)

[@jasminderpalsinghsehgal2169]

Good video overall

[@dhartisiddhpura4272]

Hi Navjot bhaiya .. commenting after long on your video.. More than thanking you, I would like to appreciate the efforts you put in each of your videos. You are really hardworking, and your videos are really very informative. Thank you 😊

[@dhartisiddhpura4272]

Also, I have one question. Would like to understand why you are refraining from investing in Indian economy?

[@growwithnav]

Thank you :) No particular reason. It’s just that I think it comes with the risk of currency exchange and inflation.

[@dhartisiddhpura4272]

@@growwithnav Thank you for your reply😀

[@catherineto]

Man, you have a typo on TSFA vs. Your spelling TFSA

[@makkusambu1069]

Common....8% YOY??????? I have been saving into RRSP for 22 years now.......$228k has moved to $253k. Have been through two tsunamis of 2008, 2016 crashes as well as 2019 Covid debacle. These excel gimmicks will entirely depend on multiple factors and macro economics. Yes, there were years when Gurus like you created excel sheets with 35% growth.

[@pjm3005]

what is your rrsp invested in? you just letting 228k in cash just sit there making 1%?

[@nerissa5857]

Liked the video and all the information Nav. I know about both, but now I know more and how to strategize better. Once you know more about the first-time home buyer savings account, could you please make a video on that. Not sure if you can use that money as well as RRSP for the down-payment or closing of a first house. Thank you.

[@growwithnav]

Will do thank you :)

[@dreamus2canada]

Good video, Nav. Not putting money in RRSP is saying goodbye to free money if you have an employer match. In addition, good way to save taxes over the interest in TFSA account and have your portfolio grow over the years. Looking forward for more videos!!!

[@pjm3005]

if you're in the first two tax brackets, the benefits from an rrsp is minimal. investing in tfsa is much more sensible.

[@dalal.krishnakant]

Great video as always Navjot. Would really love to see your points on what should we do with our mortgage payment with rising interest rate. Should we increase the mortgage if bank don't with a variable interest rate. (Bank keep increasing mortgage tenure)

[@UmerKhan-tt3gv]

Hi Nav , Great Info . Please make a video how much your investment portfolio grew over these 3 years using these strategies.

[@growwithnav]

It’s down by 4% due to the current market… but you need to consistently invest for a couple of decades to see the kind of returns that would make sense :)

[@gratedata8847]

Hi Navjot. Isn't investing in RRSP after drawing minimum salary(falling in first tax bracket) from your corporation, the tax would be lower than the corporation tax you would owe for that same amount ? Also could you make a video on how one could invest directly through the corporation.

[@growwithnav]

Corp tax is 12.2% The lowest bracket of all :) Sure; will make one soon.

[@shubhamb264]

Thanks for your information.i also use to fund my TFSA from RRSP return. I use Vanguard ETF for TFSA, would request if you can guide on ETF as well as post a video on incorporation things like things to do post incorporation for example minute book .

[@growwithnav]

👏👏

[@reubenkumar129]

Amazing video thank you 🙏

[@growwithnav]

👏👏

[@naimrahman82]

Hi Nav, Liked your videso. Very informative. Like you, i also have a corporate account. Would like to know more about investments that can be done through a corporation without paying yourself. Appreciate if you can create a dedicated video on this for professional who have a corporate account and would like to grow money in a corporate account though real estate, NRSP etc...

[@growwithnav]

Will make one soon… Questrade for business is how I do via incorporation for stocks.

[@user-su6hi1gb4t]

Hi ​@growwithnav paji . I also just started through questrade. Do you invest from operating company or have a saprate holding company. Friend of suggest on open holdco for investment