The TFSA Mistake Most Canadians Make (and how to fix it)

[@slaurids]

It's kind of sad that TFSAs have been around since 2009, yet so many people still don't understand how a TFSA works. Personal finance should be a mandatory course for high school graduation. Thanks Adam for your efforts to enlighten the masses.

[@jjcaron72]

100% agree. We had a course called Career and Life Management (CALM) back in 1990/91 in high school. I honestly think it did not have anything to do with finance.

[@waffles1ca]

I’ve had one piece of information that my dad told me when I was very young, i remember this fact with no effort, it’s front of mind. I repeat this often to my children over the past 20 years. A 10% return compounded doubles your money every 7 years, think about that over 14, 21, 28, 35 years, amazing power of compounding.

[@isaiahsmith8523]

Financial literacy is part of the curriculum, but who pays attention in high school?

[@DillonNme]

💞 I absolutely agree with you. PERSONAL FINANCE AND PERSONAL PLANNING should be mandatory courses for high school graduation... and even offer continueous educations in all Colleges and Universities. I would have loved, loved that!!!... even starting in grade school to high school to university and throughout my career life & upto now! *If all levels of governments, especially the Federal & Provincial Governments, and parents and teachers, all think about it... it would obviously be a "WIN, WIN SITUATION FOR A BETTER FUTURE FOR EVERYONE!!!," especially for the children & the economy of Canada!!! NO one wants to see anyone in poverty, homeless, and cannot afford school or food... no one in this world should have to make very tough decisions, like school or food for all the children! Plus, no one wants to be struggling, and see kids loitering or upto no good as opposed to going to school & studying and be the very best he/she can be... because "ALL THE CHILDREN TODAY AND FUTURE GENERATIONS, REGARDLESS WHERE THEY ARE FROM OR WHERE THEY LIVE, THEY ARE OUR FUTURE FOR A BRIGHTER AND BETTER LIFE TOMORROW!!!" There are only very few philanthropists who really care, and no government has all the money in the world to fund everyone for everything, at least in Canada. So, why not start with our children of the future in high school with MANDATORY PERSONAL FINANCE & FUTURE PLANNING COURSES, similar to mandatory courses like mathematics, english, science, etc.??? IT WOULD HELP EVERYONE & I BELIEVE, IT WOULD HELP KIDS KEEP OFF THE STREETS AND HELP THE GOVERNMENT IN THE FUTURE. As I grew up, I always relied on financial support and financial education on my caring & loving parents and my only brother. Now, my dad & my brother have both unfortunately passed away very unexpectedly! I even went to a private high school and to the University of Toronto. Throughout my student life and big career life, there were no personal financial & future planning courses that were offered to help and prepare all of us students for a better future. It is certainly extremely sad that I personally missed out on everything!!! Now, then what??? I have already lost out on 50 years of extremely important educations! Very, very sad!!! You could have the brain on a statistician, like me, and still have no clue about personal financial & future planning. It's very, very depressing! Now, I am doing the back flip & damage control. I wonder what makes a country the happiest people in the world!?!? How can Canada be on top of this list & how can we all work together for better solutions? Obviously, it starts with mandatory educations with all the children in this world for a better future that we, elders, sadly all missed out on just because.... I believe all our schools have to start now & not tomorrow because, as my mom always says, "TIME IS GOLD!" Also, we always have to remember that "ALL THE CHILDREN IN THE WORLD TODAY AND FUTURE GENERATIONS ARE OUR FUTURE FOR A BRIGHTER AND BETTER LIFE TOMORROW!!!" 💞💞💞💖

[@loco4dogg]

It's not mandatory for a reason, those in power don't want the rest to have financial security.

[@alhum5542]

Put $10,000 into my TFSA account 3 years ago. Bought mutual funds per my bank's financial advisor. Today it is worth $9700. Mistake is listening to bank financial advisor. They make commission regardless if mutual fund performs or not.

[@HDCanadianTrainVideos]

Mutual funds are absolute garbage. The fees on them are insane, so they get rich off your money, and you don't make much, if anything at all

[@helenkubalek9596]

Brutal

[@c.m.7734]

the MER fees eat your lunch. Always ask what the MER is or fee for managing your account. Over time, it will deplete your savings.

[@jayframes4967]

Seems though the banks standard operating procedure is to TAKE your money, Not make you money!

[@alichebry]

Same here . Had a CIBC financial advisor put me in some safe funds for retirement but nothing but losses is what I got. SOnmany horrible financial advisors out there.

[@DeborahMicheal6k]

Investments are the roots of financial security; the deeper they grow, the stronger your future will be."

[@GraziaMacahilas]

The deeper your investment roots, the stronger your financial security will be in the future.

[@CharlesLiamh1p]

Exactly! With my adviser, I’ve cultivated deep investment roots, strengthening my financial security for the future.

[@TheodoreMateo3h]

I would love an introduction to an adviser who can help me strengthen my financial roots.

[@CharlesLiamh1p]

My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further.

[@TheodoreMateo3h]

Thank you for this amazing tip. I just looked the name up and wrote her.

[@OpmacGamingLounge]

Thank you again Mr. Harper for creating a amazing tool for Canadians. I started late with my TFSA for various reasons. Now maxed out and seeing it grow. For young Canadians just try and put any additional you can within a TFSA. Use a online investment calculator and see what consistent monthly contributions could grow into for you 30 years down the road. Pretty amazing and better yet tax free (At the moment)

[@pjm3005]

You know, I'd vote for Stephen Harper in a heartbeat. HARPER for PM!

[@BVT323]

Harper is dearly missed.

[@sjbutler2330]

I'm A senior and got out of mutual funds, praise the lord. And invest into TFSA s on a regular basis. Right now I'm getting between 5.4%--4.4% for the next 4--5 years which is good. But that is or won't be the norm unless you get into stocks...etc. Which I am not comfortable doing. Lost money in mutual funds, commission fees too high. I don't like risk ,I am doing gics. When interest rates go down again what should I be investing in to get at least 4--5 % again or more? Not much out there for shy investors!

[@pjm3005]

well gramps, if it was easy to make bank with zero risk, don't you think everyone would be rich?

[@TwinsDragon3]

Move the TFSA to a self directed investment account to get the most out of it. Many good ETF's or dividend stocks to choose from!

[@ProfessionalCleancutguy]

Where do you invest? What options are there that allows you buy twice a month without paying commission on every damn trade?

[@phyllisnaccarato5313]

What dividend stocks and how did you go about to buy the stocks?

[@gavinhassett479]

Buy ETFs that can run as a drip. You pay 9$ for one purchase, then watch it grow for the next decade, no taxes owed .

[@DB-bw5fz]

@@ProfessionalCleancutguyWealthsimple is good. I’ve been using it for several years. There is no commission charged on purchases and sales of stocks or ETFs. I’ve recently started contributing to my TFSA, and have been buying both S&P500 ETFs and S&P/TSX60 ETFs biweekly for a little more than a year…and I’m up about 11.5% overall in that time. On top of that, I’ve been using their cash account as well which is paying 4.5% interest. I’m now maintaining the bare minimum in my “Big Bank” account to avoid the monthly fee, in order to have for the functions not yet available within Wealthsimple (cheque deposit, ATMs etc…)

[@darrendanger6853]

@@ProfessionalCleancutguy tip; I use the points from my credit card to pay for the fees. painless.

[@Niko-Suave]

I had no idea about and how to use a TFSA account because the name is stupid and just not being educated but now I learned the last few months and regret not using it. I am just stacking MSTR and it's been the best performing asset in the world this past year... Thank goodness I finally took the red pill with TFSA

[@RetiredPilot]

good advice, we are in our low eighties, we keep dividend investments in our TFSA and use drips to increase our returns. Every year we move stock from our RRIF's to our TFSA to the max allowed. This may appear strange but we are required to reduce our RRIF by law but we can shelter and have some of it grow in our TFSA. Too bad Trudeau reduced the max contributions. We do not need income from our TFSA so they keep growing every year. Happy investing

[@my3dviews]

Good strategy. The TFSA amount did go up to $7,000 this year, but that's to keep up with the high inflation.

[@darrendanger6853]

This is a great strategy. Im not retired yet but I do something similar, I contribute enough to my RRSP that I get a return close to the maximum TFSA deposit for the year. Then I invest that return in a few well chosen dividend stocks. My TFSA is now bigger than the RRSP account using this strategy. I'll continue with your approach into retirement.

[@darrendanger6853]

BTW, if there are two of you do you manage two TFSA's?

[@philcadorette1383]

Hi , there is another strategy to add to what Adam is saying that really helps out if you are in a position to do so. I just retired last year at 59, my tfsa is maxed out with dividend paying ETF'S that is getting me another 8k per year which is reinvested in those said ETF'S ( dripped) . I also contribute the max amount every January every year. Now , in January of every year I am actually starting out with 15k of new money , making even larger dividends all year long. This situation turns into a very nice snowball. Lastly, if you don't have cash on hand to contribute to your TFSA, you can transfer from your RRSP to TFSA for the contribution room , this also helps with a wee bit of RRSP meltdown.

[@Sophie-go3ql]

Great plan. But, can you actually "transfer" from your RRP to a TFSA, without having to pay tax for the funds withdrawn from that RRSP?

[@philcadorette1383]

@@Sophie-go3ql Hi Sophie, questrade did let me transfer 7k in investments from RRSP to TFSA without withholding tax, but I am counting on paying the 20% withholding tax when it comes to tax time. I calculated the tax in my yearly tax component anyhow even though it was not done at the time of transfer. Hope this helps.

[@Sophie-go3ql]

@@philcadorette1383 Perfect, It all makes sense now. Thank you so much for your reply.

[@maxineporter8848]

tFSA's make a lot of sense for young adults too (I would help out my grandkids with "gifts' for their TFSA's). Perhaps to use for a downpayment, even more than the new liberal home savings program which has a cap of $40K. What I like that if you use the TFSA for a downpayment, the contribution $ withdrawn becomes available for future use.

[@imagonnacrash9736]

One of my advisors told me that is what most people do. In the last two and a half years my TFSA yielded $16000 profit from 4 stocks. It lost $7000 in two other stocks, so overall a %60 gain.

[@MiniTrump]

But how exactly? I do have a TFSA but I don't know how to use it to invest in the stock market. What is the plataform or website??

[@earthsteward9]

We have funds in our TFSA in a high-interest savings account because we are using it more as an extra emergency fund. We are going to move some funds to a GIC until we have a 6 month buffer in addition to one month in a chequing account

[@nobuddy2012]

Every vehicle option is available in a TSFA as every other type other RRSP type investment.

[@iany2448]

Have started moving money from RRSP to TFSA at the end of last year. It is the first small step of drawing down RRSP.

[@MsPoitras]

Carefull with this, money you remove from your RRSP is taxable since you didn't pay tax for putting it in your RRSP.

[@pargolf3158]

@@MsPoitras You have to pull it out sometime

[@Tsusday]

@@pargolf3158 You're better to keep it inside your RRSP until the moment you want to retire. Literally no reason to do what he says. Withdrawals don't adjust your yearly limit input on the daily either. Best move is to fullfill both limits at the same time and have them both grow at the same time. Move money from your bank account cash instead, you've already been taxed on it, no reason to double tax yourself and hurt your retirement snowball.

[@pargolf3158]

@@Tsusday Probably a good idea to start drawing down when you retire being mindful not to cross over to a higher tax bracket and not to exceed the OAS clawback net income amount

[@gavinedmondstone316]

Many people are frightened of putting their money at risk even if it costs them dearly in the long run.

[@BusterDarcy]

Investing is a basic principle of retirement savings and there are many types of investing to suit each individual’s level of risk tolerance. Frightened is a strong word but hopefully you (or whomever you’re referring to) is at least willing to speak to an advisor before letting decades go by and losing out on a comfortable retirement.

[@Subotai111]

Scared money make no money

[@sunnybizz4857]

My bank only offers Gic's at low rates. How do I move that into a higher yield? I will never use the money in my lifetime, and it will be left to my estate. I'm 65.

[@pablopiquante3227]

@@sunnybizz4857 Try opening up a TFSA with the money management arm of your bank (BMO has Investorline, etc.), or transfer your money to a different bank, firm.

[@nicklbckluvr]

Yes, it is such a "slippery slope ".

[@brads2041]

I'm using TFSA for both - emergency savings in a true high interest account, gaining interest tax free and at times I put half into a short term gic, and a TFSA in self investment firm with hbal etf. I'm in my mid 50s

[@beams2002]

Unless I misunderstood, I don't think TFSA is "tax deferred". 1:00 - mentions TFSA contributions are made with after tax money (and just before the highlighted text, it actually says TFSA contribution cannot be an income tax deduction). For the average person, this means you work, you get paid, you pay income tax, then you contribute to TFSA. Any growth on the TFSA will not result in further tax - you are taxed upfront on income, so not tax deferred. This is unlike RRSP, where you make a contribution and the contribution is used to deduct from your income for taxation. So you save on income taxes when you contribute, but pay income tax when you withdraw the RRSP later - ie. tax deferred.

[@nangel270]

Depends on age. If you’re older or retired you should be focused on enjoying your money instead of gambling with investments trying to make more money to leave to someone who will spend it immediately.

[@thetonys]

Well said!

[@samanthathompson9812]

What if you're old but don't have a lot of money

[@bennyjetsaroundtheworld9047]

Then you need to hit the reset button on life

[@pjm3005]

@@samanthathompson9812 you should have made better choices! You were at the prime age to take advantage of the most prosperous time in human history. Just imagine what's going to happen to the young people of this era!

[@samanthathompson9812]

@@pjm3005 you have no idea what happened to me buddy

[@DoneByD]

Another common sense, be smarter with your money people video... Thanks Adam, keep them coming.

[@ParallelWealth]

Thanks, will do!

[@DSP_2.0]

You are right about how TFSA's should be treated as investment accounts, but people should also learn to use them with a RRSP account. So, make regular contribitions to an RRSP account, then when you get your tax refund, take that refund and but it in a TFSA investment account.

[@J.FamGuy.M]

As a couple most of our investing has happened in our joint account. This week I realized my wife had 1250 in a TFSA savings account paying 1%. To put it into perspective we are now paying nearly 5% on home loan, GIC are nearly 5%, and inflation has been several percent.

[@edwilmot3732]

Another very helpful video. Thank you! I was just thinking a couple days ago how the Feds did us a huge disservice putting SAVINGS in the TFSA name. If they called it TFIA, as you suggested, that little change would have given Canadians who barely paid attention to what a TFSA can be a massive boost. I am heading into retirement soon and facing the RRSP meltdown taxes. I have educated my children to invest in TFSA only, not RRSP, for a very prosperous retirement.

[@murraytown4]

I don’t necessarily agree in all cases.. There are some, mainly retirees, who cannot afford to bear much risk. I’ve been delaying my kitchen reno simply because I was invested largely in a balanced fund which was absolutely hammered in 2022…down double digits. I had to build up my cash position to comfortably do anything. I went out today and bought all new appliances, which, if completely invested would have been impossible. So while I agree in many cases investing is an appropriate course of action, in some circumstances it is not. A more nuanced and balanced approach to the TFSA is required.

[@lw1405]

You should never invest money you need in the short term.

[@globetrotterca]

use TFSA and invest the money in GICs, very low risk

[@kellyevans9682]

Your TFSA is designed to be used as a retirement funding vehicle, don’t ever invest in the market for money you want back in the short term. Many indexes back up 20+ this year. Nasdaq up 50%

[@AR-sb5yc]

We have been investigating before for long tern and it didn't work out. Now to have peace of mind we use GIC

[@murraytown4]

@@lw1405 that’s precisely my point. TSFAs are not a one size fits all.

[@dennisspackman7147]

My TFSA is growth oriented. I have a deferred pension plan that I live on so I don’t worry if the value fluctuates up and down. Over the long run it has grown a lot. In early January each year I transfer a lump sum for the total maximum allowed for that tax year into the TFSA from my RIFF.

[@marysinclair1214]

I made this mistake. I didn’t know I could invest that money. I went conservative and invested in GIC. Those rates are dropping. I don’t know what to do next. You are 100% right I thought it was a saving account.

[@neolithic3]

It depends on lots of factors like your age, net worth, risk aversion etc. If you have a good relationship with your bank speak to them and ask them to run you through the options for your tfsa.

[@globetrotterca]

buy dividend paying stocks

[@darrendanger6853]

Scotia Bank has an excellent publication on taking best advantage of TFSA's

[@domxgun]

What truly is sad, is people paying fees for a financial planner instead of placing it themselves in a S&P 500 hedged ETF with 0 compounding fees.

[@brucecampbell7347]

I actually think it should be called a Tax Free Investment and Savings Account. The point of the account is to save money however it should be made clear that you can make investments within the account past the standard savings account.

[@sjbutler2330]

The gov. Probably doesn't want you investing in a TFSA cause they won't get any tax money from it!

[@trainer0075]

If you put GICs in your TFSA, you save on the full tax rate. If you invest in your TFSA, you save have the tax rate. With GICs, you are not exposed to any risk. With GICs, you are not exposed to a rigged stock market.

[@pjm3005]

GICs don't return enough for you to rely on them as your only investment vehicle.

[@robertweekley5926]

Just as your Monthly Car Insurance Payment should be smaller than you pay for your Car Payment, "Some" of your TFSA $ can be in a "Savings" Account, but, I would agree, that More should be in Great Investments! But, so few understand anything about what is "great" as to investments! 😳

[@Broxty]

I put $33k into my TFSA 6 months ago and strictly purchased ETFs. VFV, XEQT, XIU and CNQ have turned it into $42k. Now I'm addicted to adding to them.

[@mrsuitcase9799]

Adam's main thesis is correct - pick the RIGHT account for the job. But there are some assumptions here we can challenge - It's perfectly fine to use your TFSA for your "Savings Account" - provided you haven't maxed out your TFSA contibution limit. Even if you're only making 1%, it's still better to have that tax-free in an "emergency fund" TFSA than it is in an investment/margin account. Once you have contributed the max - agree with Adam -- it belongs elsewhere. Next is just one quick thing to be careful with when investing in a TFSA. US Dividends are subject to withholding tax in a TFSA, so make sure you throw those in an RSP instead. (note, you would still be better off with US Div stocks in a TFSA over a bank savings rate any day of the century)

[@slabsetters]

There is debate about your theory. Yes a tfsa does hit your US dividends / income with 15% withholding but putting it into an RSP also has its downside. Yes in an RSP your US dividends are not 15% taxed BUT as soon as you try to remove this or any income out of an RSP you will be hit your effective tax rate. For me it will hit that withdrawn income at 33% where the TFSA withdrawn hits me with 0%. So there are reasons for having US holdings in both tfsa and rsp. I have them in both.

[@hbh2470]

Fees ? I self direct in my tsfa and make over 10% yearly on monthly dividends with no fees.

[@user-od9iz9cv1w]

Your point is valid, but only focused on gain. What about loss? How much better will it be if they invest and make big returns? That's nice. What if they invest and lose money? Not nice. The best solution is to save enough that you do not need to take investment risk. I am 70. I have seen a stupid number of people who buy high and sell low and destroyed their retirement funds chasing these 'possible' returns. I continue to invest in my TFSA and plan to never use it. But it is a nice place to keep a rainy day fund that grows tax free. The terms properly and improperly are dangerously manipulative.

[@grandnaional]

i am embarrassed to admit but i still not follow. Do i put money into my TSFA then use that money to pay for my investments? Does it have to do with what account the money is drawn from that i pay for investments?

[@kaybae2870]

You can always contribute to your tfsa from any of your checking or savings account Once you do that the money just sits there not doing anything earning minimal to no interest which is what he is talking about So instead of having it sitting there you can invest it within the tfsa by using the funds to buy stocks, etfs, index funds, mutual funds or GICs whatever you like

[@michaelpoczynek]

Put everything into S&P 500 Index through Interactive Brokers. Much better than the banks. 😀

[@sjbutler2330]

One should diversify! Do not put all your eggs into the same basket!

[@alpo2smith]

Because Canadian banks lied to their clients - big time. Never have I ever invested my TFSA funds into high interest accounts. That’s just stupid investment practices

[@sjbutler2330]

Why???

[@cmair77]

Thank you for the information, I found it very helpful.

[@ParallelWealth]

Glad it was helpful!

[@wasupfool5692]

At 58 years old my wife and i are both maxed out on TFSA's and have some put away on GIC as well. They all come due in February this year. Ill lock them in for 4 years at 5.5%

[@my3dviews]

That's not a bad rate to get on a GIC. My mortgage is 5.25%, so you are getting a higher rate than that. Instead of investing in GICs, I just put all of my extra cash to my mortgage, so in effect I am earning 5.25% tax free by doing that.

[@MikeJones-vb1me]

What 34 year olds have an extra $95k these days!?

[@murraycrawford2741]

Sounds like you are suggesting that a 67 year old (like me) can invest their TSFA funds and get in excess of 5% per year without any risk. That's totally not the case. My experience in ETF's over the past couple of years was nothing but worry and anxiety. Now, after cashing out the ETFs into HIS within my TFSA, I get to watch it grow each month without any risk and no need to pay anyone endless fees. Sure, my estate might loose out on some money down the road but at least if and when the market totally crashes, I don't get crushed. Did I misunderstand your message? Not sure why you are recommending folks who are at retirement age to still be taking risks in the market without at least cautioning them on the potential downside of what you are recommending.

[@ParallelWealth]

Currently you can, but soon that won't be the case

[@Bull.2024]

I have an example: In 2020, If someone put 10k on a TFSA and invested in HIVE stock (Very High Risk), 1.5 years later he had a capital gain of 5000% of his investment. He sold it and made 500K profit. Would that trigger a Taxable Event with CRA? Thoughts???

[@mikebowers7719]

Where would you invest 20K ,in a GIC @ 4.55 SAFE, or something else in a TFSA? Thanks.

[@nickyenkelaar8178]

Ok that’s what I was wondering. Thank you 😊

[@angrybird9925]

I'm glad you're telling people this Adam. One might ask why would someone NOT invest with TFSA? Truth is not everyone knows they can do this because they do their stuff thru their banks and banks are a frigging rip off and don't know what they're doing.

[@derekcox6531]

Got THAT right!

[@Aleksandar6ix]

I am using it as a savings account. It's not instant access, so I won't touch it.... But I am using it to save for a major purchase or down payment (eg car.) I currently have 20k in there and plan to bring that up to 30 or so then empty it out for a used car, fully paid

[@Mike-ix4fs]

My TFSA currently sits at $220K, crazy not to invest it in good quality companies and ETF’S.

[@ricardotorres3829]

Which companies/ ETF’s are you investing in?? I tried a while ago… lost most of my funds…

[@Mike-ix4fs]

@@ricardotorres3829 My U.S. total market ETF is XUU, developed world ex North America ETF is VIU. I own the six big Canadian banks. Other Canadian stocks are Enbridge, Fortis, Bell, Rogers, Canadian utilities, Suncor(largest position 1500 shares at $16.88). Algonquin Power, Telus, Smart Centres REIT, Riocan, Manulife, Power Corp, and I own four different bond ETF’s. XLB, ZAG, ZTL, ZLC.

[@Mike-ix4fs]

@@ricardotorres3829U.S total market ETF is XUU. World Ex North America is VIU. I own all your typical Canadian dividend stocks, and the top 6 banks. Bond portion all ETF’s and they are XLB,ZAG, ZLC, ZTL. My largest position is Suncor, 1500 shares bought at $16 during the unspoken event.

[@Mike-ix4fs]

My response keep dissapearing, not sure why.

[@GrandpaD-mb2lm]

​@@Mike-ix4fs Your responses are there.

[@lizhale42]

Hi there, can I transfer my shares to a TFSA and is there a tax implications. How do I go about it. Your help will be greatly appreciated

[@bluetocop]

my TFSA in retirement has greatly enhanced my retirement each year without affecting my OAS clawback. Between a TFSA or a RRSP I would use a TFSA first then max my RRSP. In retirement I remove my TSFA " profit each year and RRSP " profit" each year to substantially increase my income. For young people you need a combination of income streams in retirement. PENSION CPP OAS TFSA and RRSP to live better. Forgo the expensive coffee each day!

[@pianobestinstrument]

Yes, the latte factor, explained by David Bach in his books!

[@MISSY4EVR]

Yes but how do you invest in a tfsa? That’s what no one explains.

[@melissagreye8445]

@missyL1973 I'm not a financial advisor so please do your research but I think he means using your TFSA money to invest in stocks. The TFSA can be used as a legal tax shelter, so you can make profit from selling stocks or receive dividends as a share holder. I think that is what he means but please consult a financial advisor along with your own research.

[@robkienapple141]

Hi Adam. I get the impression from some of the comments that people do not understand all the available investing opportunities within a TFSA.

[@CentauriCentauri]

Like me.

[@CentauriCentauri]

I know mine is in mutual funds. I would like to know if there is better?

[@rodneedham2306]

@@CentauriCentaurimany much better choices. Easy to make between 12-15% a year now with the many products available.

[@HDCanadianTrainVideos]

@@CentauriCentaurithink of it this way... mutual funds are for beginners to discover that they won't make money off of anything a bank promotes. You want to invest in ETFs and stocks. Your banker will tell you it's bad advice (because they get paid fat commission checks for the amount of money they have under management). The fees are very high with mutual funds too. You will make very little, if you even make anything at all.

[@neolithic3]

@@CentauriCentauri Don't listen to that other commenter telling you it is easy to make 15% per year. That isn't true, certainly not in a reliable year after year, way. Keep watching Adam's videos - he offers sound advice.

[@randy7068]

Opened a TFSA and RRSP in Questrade. Invest wisely. Dividend stocks and energy stocks

[@celiakulrich255]

There are so many great ETF's out there.

[@theMharcqk]

Great 11:39 minutes… so!!! How do I use my TFSA for investing rather than just savings?

[@pargolf3158]

You can open a TFSA trading account and buy stocks or GIC's etc.

[@cheynebest7028]

And etf's like voo

[@richardbelafi2136]

Hi. I am a big fan of your videos. I fully agree with the results of your examples. I however beleive that using your financial software is confusing for most people. There are lots of columns and numbers and it is difficult to follow. I would respectfully suggest that you simply the results of your comparison simulations via perhaps a simple graph comparing the options. Your listeners will understand more and I am sure that it is your goal. Thank you for sharing your knowledge and helping to better educate your loyal listeners.

[@bailey-k6b]

I agree with you! This is too complex to follow. I won't be watching anymore of this

[@ParallelWealth]

We get the most positive feedback when we show the software, so that's why we do it. We will add both in more videos going forward.

[@harveythompson6951]

@@ParallelWealth You need a whole video for me to understand real vs nominal dollars

[@jimwu8532]

Gov't should have called the TFSA a TFA, or TFI(nvestment)A at the time. Maybe it would translate into better use? Because it now has the word "savings", those who don't know will tend to stick with savings - and leave it at that.

[@stacy-annmorgan6685]

Exactly and the way RBC has it set up is ridiculous. I have now moved to an investing platform and do not use the bank because of the high fees for each trade like I’m not paying $10 for each trade that’s a lot of money.

[@jimwu8532]

@@stacy-annmorgan6685 $29 a trade back in the mid 2000s, few options, no free ones then! (Almost an ok boomer reference). 😂😀

[@lenimbery7038]

I'm 69 and don't plan on living until 90....I use my TFSA as my car account....I buy a new car every 3 or 4 years and use it and by the time it's time for a new car it's worth around 100K again....I don't need to maximize every penny as I've got RRSPs which i'm pulling money out of and have ample other investment accounts

[@pierresdesk]

@parallelwealth I've got a few questions for the second scenario couple. If they withdraw from the TFSA at age 64 why are you talking about after tax income? Isn't all income made from the TFSA non taxable? I was on the phone with cra today and asked them if I go all in on SCHD and build over $100k a year in dividends by age 65 and they said I won't not be paying any taxes at all or report since it was all made in the TFSA. Also if the couple is making 96,401 at age 65 why do you have another column that says nominal with 178,109? Even if you ad in their government benefits of 31k that's not 178,109. Please explain better?

[@BRASS8888]

would be great to have a video on what to do with your eligible RRSP contribution amount during the year you are retired. lets say you have earn in 2023 an rrsp contribution of $10 000 for 2024 . in 2024 you retire in March. you start converting your RRSP in a RRIF to start an RRSP meltdown to the first bracket of tax (around $50 000) . so it would make no sense to make the $10 000 contribution because the amount you would save in tax would be the same amount you pay (within the same tax bracket). so what do you do with the $10 000 eligible contribution you still have left . what are the options. thank you. also note that ALL eligible contribution to date have already been taken during the working life. so there is only the $10 000 left.

[@ParallelWealth]

Coming soon!

[@tylerarnold943]

Switched my rrsp to high risk and don't pay into it any more. 45k. Started tfsa in medium risk. They both made 34 percent Last year.

[@jeremy7818]

While the government reserves the right ignore that it is a “tax free” account and have numerous CRA law suits where they hit many Canadians with tax claims when there TFSA overperformed so CRA decided it was a taxable trading account. So sure - investment account. Just don’t bee good at it… as CRA will come calling to leave you to prove your own innocence when they call you a “trader”. Whether you have a day job or not.

[@masquereseau5635]

I have Microsoft, Google, Facebook, some Nasdaq 100 in my TFSA 😂 I don't know why people just don't learn about finances. I always explain to them that saying you have a TFSA is like saying you have a class 5 vehicle while trying to describe a car.

[@bhagsunath]

Hi, can you share some investment plan for immigrants. We moved here, left all back in our home country somebody who doesn’t even have emergency funds, have limited income with 0 knowledge on how investment works in canada

[@harveythompson6951]

You really need to be more specific Adam than just telling people to use it correctly. People will hear you say you need to invest in your TFSA and then they will go to the bank and they will be sold a house brand balanced mutual fund rife with high fees and poor performance. I started out with TD Waterhouse WebBroker accounts because I wanted to do it myself and buy anything I wanted, particularly E series funds. After retiring I switched all accounts to RBC to consolidate and opened two RBC direct Investing TFSA accounts for my wife and I and transferred everything in. Then I opened the same type of accounts for my daughters to store and grow their RESP payouts. They will be using that money but I hope in the future they will be able to put that money back in, or I will gift it back to them as an advance inheritance. Online discount brokerages, bank discount brokerages are all good.

[@waffles1ca]

The TFSA is the most powerful investment tool we have and it’s tax free! One of the few gifts we’ve received from government.

[@dswood302]

Except that Trudeau rolled back the contribution limit from $10K back to $5,500 when he got elected. 😡

[@harveythompson6951]

@@dswood302 It was $10000 for only one year.Harper should not have shot it up from 5500 to 10000 in one year just for votes.

[@OptimisticHominid]

@@dswood302But fortunately, he also rolled back the Conservative’s increase in the OAS age from 67 back to 65.

[@waffles1ca]

@@dswood302 and then PM Trudeau indexed it to inflation soooo, he didn’t cancel it! Gift horse in the mouth.

[@sjbutler2330]

Is it true that trudeau is thinking about taxing our main residences? I'm not talking land taxes.

[@metalmanmike3815]

I made the decision to invest in the banks rather than with them...they're the house and as the saying goes, the house always wins...so i'm now on the side of the house...they pay better dividend rates than GIC's do interest and the dividends usually grow to cover and even surpass the rate of inflation...Sure i'm betting that our Canadian Banks won't collapse, but the main players have been around 70-170 plus years and still doing well...Ups and downs will come, but as long as they continuously pay the dividends they're one of the safest investment vehicles in my eyes for retirees or anyone looking to reduce risk and earn a steady income.

[@MilkByCow]

Love the clickbaitey title haha, I was like WHAAAAAT?!???? But yes, I’ve moved the funds from my non-registered investment account, and set up a TFSA investment account and continued my investing adventures in there. Long story short, not having to pay capital gains makes a huge difference in tax season.

[@33OrchardDrive]

I'm a younger person with 2 TFSAs, really not sure I understood this explanation--neither what was being done wrong, not what is the correct approach

[@rubent455]

Actually, in the perfect world, it is the opposite, a well-balanced portfolio earns interest (100% taxed), dividends (dividend tax credit), and capital gains (50% taxed). So, if you earn your interest from "savings" in a TFSA and tax-preferred capital gains and dividends in a non-registered investment, you will be ahead of the game. You can get a 5-year GIC at around 5% in today's interest environment. How much more will you make by assuming the risk of investing?

[@nickyenkelaar8178]

Can you change the saving account into an investment account with the money that is already there ? Or can you only do with the room that is left?

[@kaybae2870]

Typically, if you have a tfsa savings account you cannot change the account but can open a tfsa investment account and then transfer to it

[@slabsetters]

Yeah invest in your tfsa... just be careful that you are not 100% unrestricted in investing like a non registered account... primarily you cannot show signs that you are day trading in a tfsa. CRA frowns on too much trading activity in a tfsa. And before you ask... the CRA is not clear on their definition of too active in trading. But yeah. My TFSA was at max headroom of $92k a year ago and my balance is now $130k. All tax free when I pull it out. Thanks to one high growth stock and high yielding etfs. So don't use your tfsa as a savings account.

[@DoneByD]

Point of clarification --- the 2023 TFSA cumulative max contribution room since 2009 was $88K. Now Jan 2024 TFSA cumulative contribution room max is $95K as long as you were at lease 18 years of age in 2009.

[@slabsetters]

@@DoneByD yes. 88k last year. We were maxed out.

[@OneBadSon]

I love how the government makes it fuzzy on the rules. Typical lame government

[@jayframes4967]

​@@slabsettersSo your 88k made you 42k in 1 year? Wow! What were you into?

[@slabsetters]

@@jayframes4967 yeah... look at the stock ATH ... :) I invested early 2023 and heavy plus good gains om CC income producing etfs which I reinvested almost all of it. Plus add $7K last week for 2024 contribution. So more like 95k to over 130k. And this is in a TFSA which shows a TFSA does not have to be a boring savings account.

[@dwaynejohnson6277]

Wait. You mean some people just stick cash in, and not invest in anything?

[@HDCanadianTrainVideos]

You'd be surprised lol

[@kellyevans9682]

Not just some. Reports suggest over half of Canadians

[@nangel270]

Yes, and it’s because it’s guaranteed not to lose money as a savings account instead of gambling on “possible” gains and losing your principal which MANY people have done.

[@kellyevans9682]

@@nangel270There are many different investments that vary in risk. Gambling is a bit of a stretch. You’re definitely not doing yourself any favours by “protecting” your money that is losing value every month due to inflation.

[@dwaynejohnson6277]

​@@nangel270It's not guaranteed!! It can go up or down depending on what you invest in. If you invest in nothing (leave it in cash), it is guaranteed to stay the same but that is true for cash anywhere - saving acct, chqing acct, cookie jar, etc

[@paulmarshall4794]

I tried to convince one of my sisters about this exact thing. She was getting next to nothing on the money as she was just using it as a savings and wasn't making anything. I told her to buy a few dividend paying ETFs. With the amount she had in the account I showed her that if she bought the ETFs she could receive $300 a month that she could get every month to spend. She didn't really get it and I tried a few ways to explain it to her. She still has it not making much. Yet she wonders how I was able to retire early in life and I showed her that it is because I put my money into investments that are paying me now and I have enough to live on without having to work any longer.

[@kaybae2870]

What etfs did you invest in?

[@OlderShadowRider]

Canadian EFS? might i inquire which ones?

[@jonmacist]

Yeah dont save in your TSFA if your only getting 0 to 3 percent intrest with 3 percent inflation that is 0 intrest , if your getting 8 to 10 percent then that is ok to have it in your TSFA account and have the money actully grow.

[@lolitamiranda4472]

I deposited 25,000on my tfsa and it decreased it’s been 3 yrs now and what was left is 5,000,i wondered why ,i asked the financial investor and i wasjust told that i shd manage my account i asked how nothing worked with the advisor can you imagine I didn’t know what to do i was planning to withdraw my money before the dissipated ,what is your advice ,to think that i deposited 100 a month hoping that it would go up or increase but what happens is it goes up and down it’s crazy!

[@marilynturcotte5304]

This is how mine and Hubby's are set up, investing not just savings.

[@jimmygorgiev9379]

I guess you can say GIcs are guaranteed, but the return is so low anyway. It’s not worth it!!!

[@sjbutler2330]

Right now rates are between 4-5 %+ so that is not nothing!

[@MT-us2ln]

When does TFSA stop? After 65 years do you pay tax on all gains or is it 71 years old.

[@sjbutler2330]

Learn about tfsas! Your bank can help you.

[@91rss]

know people sucked in by the RBC untrained sales people before it became public and were sold stuff that would be lucky to get 2%..

[@BVT323]

My mother is the FUNNIEST. I taught her about the TFSA and opened an account for her, and she now gives me daily market commentary. She's 70 and had ZERO knowledge about the market, and now she's listening to BNN News and other channels and sends me text messages with strategies. I laugh daily with her, but it's interesting what happens, even for an immigrant like my mother who has been in Canada since 1967, and who had no idea how these things work, if one happens to immerse them self in the conversation. She also calls me snd asks me my opinion if she were to buy shares of a given ETF or company.

[@Larry-pw5ne]

Transferred funds from a saving account to a brokerage account and have been doing very well with a mix of tsx blue chips, nasdaq index etf, bitcoin etf and money market funds. Can't believe I wasted years with this money sitting in a savings account paying crappy interest.

[@cleeyoung1]

Adam, would you prioritize equity investments in your TFSA instead of bond investments as well?

[@sunnybizz4857]

Am I better off moving all my investments to an investment company, or rely on my bank branch's "advisor" for the best investment strategy?

[@Cableman-hr2uu]

The major problem is you invest violently and very frequently, the CRA is going to find you and ask you to pay the capital gain from that TFSA account, I would say correctly the account name should be changed to tax free limited investment account !!

[@invest6046]

looking to get started.. What would best etf thinking VFV & XIU (US & CANADA) what do people think ?

[@harveythompson6951]

Yes, or split every January between something like TPU and TPP and forget it. I started out in 2009 by following the couch potato strategy and maxing my wife's and my TFSAs every year but then ditched the bonds and have it completely in equity ETFs. Am treating it more like a higher risk play account and keeping the RSPs conservative.

[@OpmacGamingLounge]

I personally hold VFV, management fee 0.08% and HXS fee of 0.11% two different accounts. Inside RRSP I use SCHD

[@Krista-k5v]

explain why they took away the 20% canada savings bonds please

[@sjbutler2330]

Because the government was losing money! They don't like that. I already looked it up.

[@drd4059]

I would be interested if I could transfer shares of a private company I own into a TFSA as a contribution in kind. Unfortunately the shares are worth many times the contribution limit.

[@harveythompson6951]

You can transfer in kind up to the contribution room but you will have to pay capital gains tax on the gain the shares have incurred up to the point of transfer. After that, any future gains incurred once the shares are in the TFSA are tax free.

[@MISSY4EVR]

How do I put an investment on my tfsa?

[@pargolf3158]

As others have commented, open up a TFSA investment account and buy stocks that pay dividends.

[@daniellord-vera6987]

i have a mutual money making tfsa im fine with my returns so no

[@gwenbuchanan1]

If I understand this correctly, if I purchased 1 bitcoin last yr from inside my TFSA for $20K, then sold it this yr for $60k, that extra $40K, or 200% profit would sit in my TFSA tax free?

[@TKKSuper]

yes

[@pargolf3158]

You're not allowed to purchase bitcoin in your TFSA. However, the rest of yur comment is correct. If you buy a stock for $10 and it went crazy is worth $1000, you can sell it and the $990 gain is tax free in your TFSA.

[@MichaelSmith-mr2mz]

I’m 77, semi-retired and receiving dividends from my regular account. I’m now in the process of moving my dividend stocks to the TFSA, thereby getting my dividends tax free. Hope CRA is not following your site 😅

[@johndrake3472]

So, the bottom line is to put your fastest horses into your TFSA?!

[@sholbech22]

the ultimate savings tool for Canadian's!!!. currently 50 and have 150K in TFSA.. with 7K yearly contributions..@ 8% RoR (div's+retur_ will give me $1.045M @70.. 60-70 is RRSP meltdown!!

[@my3dviews]

Tax on investments is only 50%. Dividends are taxed at 50% as are capital gains. Interest is taxed at 100%, like regular income. So sheltering your interest investments inside your TFSA will save you a higher percentage of tax if you are getting a good interest rate. The assumption is also that your investments will go up in your TFSA, which is no guarantee. No befit to a loss inside your TFSA. A capital loss outside of your TFSA can be used to offset other gains outside of your TFSA. So, it isn't as clear cut as you think, as far as whether to use the TFSA as a savings or investing account. I do both.

[@johnnyboyvan]

Probably not good advice for those who are retired if the markets are too volatile. 5 percent seems good to me presently.

[@HDCanadianTrainVideos]

But you can invest in extremely safe funds that pay over 5% (like cash ETFs) instead. So it's good advice.

[@ParallelWealth]

My point is, in the not too distant future, where are you getting 5% guaranteed?

[@danb.4128]

@@ParallelWealthAdriano’s channel! 😊

[@pargolf3158]

@@danb.4128 Dude moved to Panama

[@robertweekley5926]

😂😢 I'm sure you'd Freak Out at my approach, of Freaky High Yield Dividends of over 50% Yields, along with Some at "Just" 16% to 20%! Remember, Inflation must be considered, too!

[@ecpoirier]

stupid observation, but at 1min 20second, the example is investing $10,000 in 2024, and 10 years later it has doubled. What adjective could be used to describe this type of "performance" (i.e. unusual, risky, aggressively invested). I ask because I'm not using my bank's financial advisor, I hired one, and have been investing for 8 years and unless something magical happens in the last two, although my initial investment has gained - it WILL NOT double in the next 2 years.

[@LilianGahan-k8t]

You can actually double your money in a year with the right investments. If you are ok with actively trading, you can open a TFSA with a broker and invest in double or triple leveraged ETF's and make crazy returns. TQQQ for example has gone up 133% in the past year, 359% in the past 5 years. You could have bagged another 60% on top of that if you'd sold on the downtrend in 2022 and bought back in at the end of the year. There are options out there if you're willing to take a more active role in your investing. That's what I have done because that's the only way I will ever be able to retire comfortably. Banks and firms like SunLife take more earnings off your money than they give you in return.

[@pargolf3158]

You are incorrect. You can more than double your investment in 10 years. There are blue chip companies paying over 7% dividends. Here is an example. If you invest $1,000 in a blue chip Canadian company paying 7.7% annually in dividends (and they do exist), and you use a DRIP (meaning every time the dividend is paid it is automatically reinvested), with the magic of compounding interest, after 10 years your investment would be worth $2,144. This is your original $1,000 plus $1,144 in dividends. That's assuming that the stock price stayed the same, it's more than likely that the stock went up in value so your investment would be worth even more than $2,144 (not to mention that these companies tend to raise their dividend yields year after year also - so there's that also). Do your research, you will see that these companies are out there. Not risky or aggressive.

[@SlightlyGrimGaming]

honestly, i dont understand

[@anomanderrake8693]

Taxe free Investing Account! Exactly sir. Very well said :)

[@joyaclub]

But a 67 year old probably should not increase risk by investing in equities.

[@nelinjo]

Why would i need 2M at age of 95?😂😂😂 You guys are hilarious. I want to live and spend now. I don't need cars and millions when i am almost gone. The only way to get good returns is owning property and renting it. It doesn't make sense that I invest till 95.

[@garth217]

​@joebot9309 yes arrogant people mind their business

[@HDCanadianTrainVideos]

You probably should be less selfish, and maybe want to keep some money for your family if you pass away before them.

[@nelinjo]

@@joebot9309 Really? Canadians are famous for holding out for family while selling their own houses to their kids. Not to mention other "values" that they have🤣