I think that if you could only choose one of the TFSA or the RRSP and you're already in a lower tax bracket, it makes more sense to go with the TFSA. If you're in a high tax bracket and you're a big saver, you should take advantage of both. TFSA and RSPs should contain all your fixed income investments and leave your equities in your non-registered accounts. Since we only start with 5K in the TFSA, it's hard to go with individual bonds. May be a corporate bond index fund. I don't know if this is even allowed in a TFSA, but I would seriously consider shorting US treasuries because it's in a bubble stage, IMO. Even a well chosen equity may be a good choice, but you should be highly confident that your choice will be considerably higher 5-10 years from now. Otherwise you can't take advantage of the capital losses.
Is PCF and Ing insured by the govt? What's the probability you will loose your TFSA?
Remember that "TFSA" is just a way of designating a certain deposit of money in a variety of different options, chosen by you. You can have it in a simple money market account like ING or PC, or you can have it in mutual funds or a combination. The probability you will "lose" each of those is the same whether designated "TFSA" or not (ie essentially zero in a savings account to higher in equity mutual funds).
ING $9.50
PC $13.06 but $3.34 of that was "Early Bird Incentive Rate" which I hadn't heard of, but I assume is discontinued.
Jan/Feb/Mar
ING $12.33/$9.50/$8.59 = $30.42
PC $12.07/$13.06/$12.53 = $37.66
Hmm so much for compounding here. Even with the extra 3 days in the month, the banks are obviously steadily cutting rates and PC is definitely crushing ING. PC is still paying an "Early Bird Incentive Rate" midway through the month but I have no idea what that is. There is no information on it on their web site.
Current interest rates:
ING 1.85%
PC 1.65% but the mystery Early bird bonus makes PC higher.
About 15 months ago I got an Insurance Tax Shelter.
Life + Investment combined product. The banks don't sell it because it is awesome, it is actually because they aren't allowed.
They are creditor protected and they don't care where the money you put in comes from (poker if you want).
Basically if I die at 60 I have like 2.8Million in life insurance and 2.9 Million in savings. Which goes up at a floating 2-6+% a year on the investment side and a similar amount on the policy side. Same theory as everything else except...
You can leverage against the savings to retire without paying the penalties you would with an RRSP. (i.e. need 60K to live off when you hit croak mode, you need to pull out 90K from your RRSP's because of taxes.) Now, when you do die, whatever you haven't leveraged + some of the life benefit is used to pay the leveraging you did do and the rest goes to the beneficiary, kid, kids, spouse, estate, charity etc.
If you do set up one of these with the beneficiary as a charity, you can leverage the shit out of it, write off the investments you pay as charitable donation, and with the life+investment payout at the end, the charity still gets some. (It's all legal)
(Now these aren't for everyone, but a perfect fit for me.)
Great book to read:
The 10 Secrets Revenue Canada Doesn't Want You To Know!
-David M Voth.
(I think the publisher (Liberty House) reprinted it as The 15 Secrets..... in order to not have to pay the author since most of the information is reprinted from government documents.)
I read Chilton's book when I was in grade 8 and thought my mutual funds were perfect, DCA every month etc. Not true!
I've been spending my mornings getting my LLQP and CSC, while interning at a financial group. The stuff we do for people is unreal. I can't believe how ignorant I (as well as most people) was when it came to money/retirement etc.
EDIT: There are a bunch of options that guarantee your principal, or at least 80% of it.
I hope everyone has gone down to their bank and opened a TFSA (Tax free savings account). There is no reason not to. You have to put after tax money into the bank, why would you unnecessarily pay taxes again on the interest that money makes?
I've neglected to deposit to a TFSA so far for 2010. Does anybody know which TFSA is the best now?
ING by far. Plus they have a deposit bonus on 2011 running right now where you get double interest (to pay for the taxes) for depositing now and they automatically transfer it for you on Jan.1 into your TFSA.
Comments
Man we are getting hosed. ING is down to 2.3%
Remember that "TFSA" is just a way of designating a certain deposit of money in a variety of different options, chosen by you. You can have it in a simple money market account like ING or PC, or you can have it in mutual funds or a combination. The probability you will "lose" each of those is the same whether designated "TFSA" or not (ie essentially zero in a savings account to higher in equity mutual funds).
With the drop in rates for Feb:
ING $9.50
PC $13.06 but $3.34 of that was "Early Bird Incentive Rate" which I hadn't heard of, but I assume is discontinued.
Jan/Feb/Mar
ING $12.33/$9.50/$8.59 = $30.42
PC $12.07/$13.06/$12.53 = $37.66
Hmm so much for compounding here. Even with the extra 3 days in the month, the banks are obviously steadily cutting rates and PC is definitely crushing ING. PC is still paying an "Early Bird Incentive Rate" midway through the month but I have no idea what that is. There is no information on it on their web site.
Current interest rates:
ING 1.85%
PC 1.65% but the mystery Early bird bonus makes PC higher.
Life + Investment combined product. The banks don't sell it because it is awesome, it is actually because they aren't allowed.
They are creditor protected and they don't care where the money you put in comes from (poker if you want).
Basically if I die at 60 I have like 2.8Million in life insurance and 2.9 Million in savings. Which goes up at a floating 2-6+% a year on the investment side and a similar amount on the policy side. Same theory as everything else except...
You can leverage against the savings to retire without paying the penalties you would with an RRSP. (i.e. need 60K to live off when you hit croak mode, you need to pull out 90K from your RRSP's because of taxes.) Now, when you do die, whatever you haven't leveraged + some of the life benefit is used to pay the leveraging you did do and the rest goes to the beneficiary, kid, kids, spouse, estate, charity etc.
If you do set up one of these with the beneficiary as a charity, you can leverage the shit out of it, write off the investments you pay as charitable donation, and with the life+investment payout at the end, the charity still gets some. (It's all legal)
(Now these aren't for everyone, but a perfect fit for me.)
Great book to read:
The 10 Secrets Revenue Canada Doesn't Want You To Know!
-David M Voth.
(I think the publisher (Liberty House) reprinted it as The 15 Secrets..... in order to not have to pay the author since most of the information is reprinted from government documents.)
I read Chilton's book when I was in grade 8 and thought my mutual funds were perfect, DCA every month etc. Not true!
I've been spending my mornings getting my LLQP and CSC, while interning at a financial group. The stuff we do for people is unreal. I can't believe how ignorant I (as well as most people) was when it came to money/retirement etc.
EDIT: There are a bunch of options that guarantee your principal, or at least 80% of it.