Tag saving

Why you NEED a TFSA?

Paul - The Wry Eye Guy Leave a comment

According to the latest StatsCan data, from 2021, there are about 15 million of us that have TFSA accounts. There are about 30 million of us that are eligible to have TFSA accounts, so 50% of the adult population are not using this account. While some can’t afford to save & invest, there are still a lot of people missing out on what this account can do for them. TFSA means Tax-Free Savings Account.

Who doesn’t want something tax-free?
If you have money sitting outside this account … WHY!?!

The other funny thing with TFSAs is that a lot of people are storing cash there. I know it says “Savings” right in the name, but parking cash is not what this account is about. Inflation evaporates the value of cash. Especially with today’s high inflation rate. There are no benefits to letting cash evaporate inside a TFSA. You need to invest in something. Even if you are worried about investing in the markets, you can put your money to work in a high interest tax-free savings account (HISA), in GICs, or in one of the cash savings or HISA type ETFs. Some of these are yielding 5% at the moment. You can harvest that 5% return in a TFSA totally tax-free.

Some of these choices are more liquid than others. Being “liquid” means you can convert whatever it’s in to cash right away. And that means you could consider storing some of your emergency fund inside a TFSA. A locked-in GIC, for example, is not suitable for an emergency fund. An emergency can’t wait for a GIC to mature. The bottom line is that it’s tough enough to save, whether it be for an emergency fund or a holiday fund, but reducing the value of those savings by not getting some kind of return is a waste. And not sheltering those returns from tax only adds to that.

I know some of you are are already way ahead of the game with this. But if you have people in your life that you even remotely care for, your friends, your parents, your kids, please teach them about the value of the TFSA. It’s too big a deal to miss out on. Sure they’ll have to learn how it works & what investments are suitable under different circumstances. But it is worth the effort. If they can’t learn enough to do it alone, encourage them to see an advisor for help.

If you are not filling up your TFSA with long-term investments, use the spare room for your spare cash. Let it work tax-free for you.

If you want to learn a whole lot more about how all this stuff works, read Double Double Your Money, available here on Amazon. If you have a Kindle Unlimited subscription, you can read it for free. If you don’t have a subscription, there is a current Amazon.ca promotion that gives you the first two months free, so you really can read it for free. Please read it & share the message. Help get it out to some of the other 15 million Canadians who are missing out on the tax sheltering power of the TFSA.

Important – this is not investing, tax or legal advice, it is for entertainment & educational purposes only. Opinion are my own, do your own due diligence & seek professional advice before investing your money.

Double Double Your Money

Paul - The Wry Eye Guy Leave a comment

I started pulling information together to help my kids save & invest almost 3 years ago & the end result is this …

Double Double Your Money was released on Amazon today.

It is a guide to saving & investing that primarily targets younger investors & those just starting out on their journey. That said, I could have used something like this at a much older age myself! It might also be a useful resource for other parents looking for some ideas on how to guide their own kids towards a saving & investing program. Like all Dads, I’m trying to prevent my kids making some of the mistakes I made. As parents, we know how that usually goes. But we’re parents, so we have to keep trying, eh!

While the broad principles apply in most places, the focus is on Canada, where we can tap the value of tax-sheltered accounts like our TFSA & RRSP. The Canadian CPP & OAS programs provide some support in retirement but there’s a lot more we need to do to for a comfortable retirement. In my twenties, I couldn’t even imagine thinking about retirement. Nor do my kids. So I cover some exciting things like getting rich, becoming a millionaire on minimum wage, early retirement, FIRE, & anything that I think might suck them into saving & investing sooner!

Not to worry, there’s no silly stuff here. I’m a little too conservative & risk-averse for that. And I worry more about losing my kids money than I do my own. But the importance of building a financial strategy as early as possible is a huge deal. I hope this works to get younger investors, including my own kids, motivated enough to get things going.

You’ll find it across most Amazon markets in Kindle & hardcopy formats, & you’ll find it in the Canadian market here.