It’s time

animal-modified-copy

Despite the fact T2 couldn’t stop himself from diddling with it (for purely political reasons), the TFSA shines. Gutting the contribution limit was petulant and puerile, but it had the desired result. The Libs got elected. Now we have less private savings and more public debt. So Canadian!

Anyway, that blunder’s behind us. Let’s make the most of what we’ve got.

The good news is Canadians have put $45 billion into TFSAs. The bad news is they withdrew $18 billion. The average TFSA has stuff in it worth a little less than $13,000. Of people who have a TFSA (about 11 million) only 17% have maxed. Of all Canadians who could have a TFSA, that equates to 7% who have fully taken advantage of this sucker.

Worst of all, 80% of the money in TFSAs is stuck in GICs, or tragic, interest-bearing, numbing, brain-dead accounts. Why? Because (a) the federal government has consistently portrayed them as savings vehicles whose best use is putting money away for a hot tub, (b) most folks are financial illiterates and (c) they listen to TNL@TB.

But we’re different on this pathetic blog. We know these are money machines whose highest use may be amassing a pile of taxless wealth that can finance retirement and still let you collect all your government pogey.

Imagine you put $5,500 a year into a TFSA, invest for growth, achieve 6.5% and do this for 30 years. That will result in a lump of $511,000, of which $340,000 is growth. Cool. But the best part is that would throw off $33,000 a year, or $2,800 a month in cash flow, at the same yield. If that were your only income, you’d enjoy the full CPP (averaging $900 a month) plus the OAS ($570) with zero deducted. So, on an income of $51,000 you’d pay no tax. Of course, if you and your squeeze did the same thing, there’d be over $100,000 a year to spend.

In other words, if a hundred grand’s enough for you, investing is simple. Find $900 a month between the two of you during your working lives, plop it into a TFSA (in the right stuff), and do nothing else. Of course, lots of people can’t save nine hundred a month because they’ve got fat mortgages or own cats. But, alas, such is life. This is why just a tiny percentage of Canadians have truly harnessed the TFSA. It’s all about choices.

So on Tuesday you can contribute $5,500 for 2017. That brings the accumulated TFSA room for those who (like me) turned 18 in 2009, to $52,000. For a couple, that’s $104,000 and they can also stuff money into TFSAs in the names of their adult children. (Just ensure you gift the cash to your kids, so they make their own contributions rather than transferring the money directly from your bank account. Only in the case of a spouse of common-law partner can you move money directly without attribution.)

Some other things to remember about tax-free savings accounts:

  • Unused contribution room (as with RRSPs) never goes away. It accumulates year upon year, usable at any time. Just make sure you file an annual tax return to claim yours.
  • There’s no lifetime limit on the amount of contributions (at least for now, depending on how we vote).
  • You don’t need money to contribute but can use stuff you already own, such as an ETF, mutual fund or stock. When you flip that into the TFSA, however, a ‘deemed disposition’ takes place, which means any profit will be subject to capital gains tax. But, bummer, capital losses are not usable to offset gains.
  • If you contribute too much, count on a big penalty of 1% per month on the excess. Check your status with the CRA, and have last year’s tax return handy when you call. You’ll find out why.
  • Money removed from your TFSA creates an equal amount of new contribution room, but only in a subsequent calendar year.
  • As mentioned above, any income you receive from a TFSA is non-reportable on your tax return. Therefore it’ll never shove you into a higher tax bracket (like RRSP or RRIF income) or trigger a claw-back of your government wrinklie payments.
  • Assets can be removed from your TFSA (such an ETF or a stock) and there’s no tax on any growth that may have occurred while in your account. You can move that into your RRSP (if you have room) and also score a tax refund on the greater but untaxed value. Sweet.
  • TFSAs are not for saving. No high-interest accounts. No GICs. No bank savings accounts. Don’t squander this opportunity. Instead, own growth assets such as equity ETFs, and do it in concert with the rest of your investments to ensure you have overall balance and diversification.
  • Never use a TFSA to finance a hot tub. There is only one exception.

hot-modified

134 comments ↓

#1 GTA Dude on 12.30.16 at 6:31 pm

Saving? Most people in my age group have trouble making ends meat here in the GTA.

I just marry a partner who’s parents are loaded…this is my retirement plan.

#2 Mike as in Mike on 12.30.16 at 6:33 pm

Does anyone know what happens to a TFSA after the person is deceased? My 88 year old mother has money invested in various GIC’s and the TNL@TB wants her to invest in TFSA’s. I’m against this because I’m concerned about the legal implications and costs of closing the account after her death.

#3 Doug t on 12.30.16 at 6:37 pm

The dog has it right – invest in vodka – it will help numb the pain that will be 2017

#4 Don Chogni on 12.30.16 at 6:39 pm

Been following this blog for a long time and still can’t figure out what “TNL@TB” means.

#5 crowdedelevatorfartz on 12.30.16 at 6:42 pm

TFSA Overcontributions are penalized at 1% a month?
YIKES!
Even if you dont touch it? Cash it in? Use it? Lick it? Or do any of a multitude of things to it?
Its not like is going to generate a refund…..
Why wouldnt they just send you a nasty letter and negate any overcontribution gains as fully taxable?

#6 Harbour on 12.30.16 at 6:48 pm

TFSA’s are a vehicle to hide Capital Gains Tax

What if your a moronic loser and have $250,000 of Capital Losses?

A TFSA means shit

#7 Happy Fran on 12.30.16 at 6:48 pm

Thanks for all the helpful advice, Garth! Happy New Year!

#8 Timmy on 12.30.16 at 7:02 pm

People should max out their TFSAs if they can–if they haven’t done something stupid like buy an overpriced house with a big mortgage in the last five years. But let’s remember that with the exception of this past year, the TSX has sucked in performance and of course you don’t want to hold US equities in a TFSA. I’ve maxed mine every year and it is only about 60 grand now.

#9 Timmy on 12.30.16 at 7:04 pm

Garth,

I’ve read that the conventional wisdom is to draw down all non registered assets before withdrawing RSP money when you retire but with the TFSA is it better to draw this down in conjunction with RSP money to keep RSP withdrawals low so you won’t pay much tax?

#10 Jeff on 12.30.16 at 7:06 pm

Is the stat still 80% of TFSAs in cash or GIC crap? I read that years ago and can’t believe it’s still that bad. It’s been 8 years and people still don’t know what they’re doing?

#11 Smoking Man on 12.30.16 at 7:16 pm

The pic, that’s my wee Shophie.

#12 Nonplused on 12.30.16 at 7:16 pm

The vast majority of Canadians will never maximize their TFSA’s or their RRSP’s. They don’t have the money left after paying the bills and the taxes.

That said, they are both great programs (the TFSA being the better), and are still very valuable programs even for those who can’t “max out”. Use them to your means to do so.

Probably follow Garth’s advice and max out the TSFA first but I am not sure it might be good to use the RRSP first and then put the tax refund in the TFSA. I haven’t run any numbers and I bet Garth corrects me here, but deferring taxes is always a good idea.

Yes, tax rates might go up in the future, but the possibility your income might go down in the future especially when you retire is also very real. Never pay the tax man today what you can defer paying him until tomorrow. Then sock that money away in your TFSA and at least you won’t have to pay him on any gains, even if he comes for the principle.

Thanks Garth for your great input into creating this TFSA thing. Even if people use it to save for a hot tub at least the hot tub costs them less in terms of hours worked, assuming some gains.

#13 When Will They Raise Rates? on 12.30.16 at 7:16 pm

A little known fact, and something I’ve not seen mentioned here: You can put physical Royal Canadian Mint produced precious metal coins and bars in your TFSA. ;)

Happy, safe and prosperous New Year to all!

#14 meister on 12.30.16 at 7:16 pm

Happy New Year everyone. May 2017 be the year of making right choices and considering those around us.
cheers

#15 Pete on 12.30.16 at 7:21 pm

“There’s no lifetime limit on the amount of contributions (at least for now, depending on how we vote)”
———————————————-
Voting changes nothing substantial. When the Powers-That-Be decide that it is time to make a move in a certain direction it is done, no questions asked, no public consultation.

#16 TS on 12.30.16 at 7:22 pm

Garth knows there’s no way that the TFSA will be let grown to $500,000 for both spouses while both of them collect Full OAS.

This is easy pickings for a Federal Government in need of cash.

You may not have to pay tax on it, but income made of a TFSA will be used to determine government benefits in the future.

You take about Governments needing to raise tax rates in the future, this TFSA loophole will be closed way before that.

Unlikely since TFSA contributions are after-tax. — Garth

#17 Grey Dog on 12.30.16 at 7:32 pm

True Confession Time: For decades, I hate to admit, (I have mentioned this in the past,) I was one of those extreme financial illiterates!

I thought that once RRSPs, and TFSAs (registered stuff) etc were topped up; leftover stuff was meant for new car (eventually) or renos, vacations, etc. Yes, we lived within our means, but, I did not realize the benefits of the nonregistered account.

It wasn’t until my husband was handed an unexpected windfall as a retirement package at the age of 57 that one of our friends whispered the word Financial Advisor, that was a wake up call!!! I looked at what we had saved thanks to our annual date with TNL@TB and choked…like this week’s ER Doctor take that number divide by 30 (years left to live), I had never heard of the 4%withdrawal rule!

NO ONE ever mentioned and directed our family to NON REGISTERED INVESTMENTS. Today, I’m a daily reader of this blog, husband is retiring in the summer, everything is topped up, including a very healthy non registered account which means retirement will be fun, fun, fun! (We have been on an austerity program from age 57 to 65, but the future is BRIGHT).

Happy New Year Blog Dogs, and to you Pups, save, save, save, you can still have fun in your own backyard!

#18 Deplorable Steerage Wisdom on 12.30.16 at 7:45 pm

#4 Don Chogni on 12.30.16 at 6:39 pm

Been following this blog for a long time and still can’t figure out what “TNL@TB” means

Trannies never learn @ taco bell

#19 Grey Dog on 12.30.16 at 7:46 pm

#2 Mike, it may be time for your (single) Mom and you PLUS ALL your siblings to get together with TNL@TB (bring ALL your ID) get written in on her GICs, this apparently doesn’t have to go through PROBATE. I am NO expert, but my husband’s Dad has done this. Comments or corrections please…

#20 will on 12.30.16 at 7:47 pm

yup. ready for tuesday.

#21 For those about to flop... on 12.30.16 at 7:48 pm

#4 Don Chogni on 12.30.16 at 6:39 pm
Been following this blog for a long time and still can’t figure out what “TNL@TB” means.

///////////////////////////////

Hey Don ,I don’t recognize your name so welcome to the blog.

Some people think it stands for The Nice Lady at The Bank.

But I have it on good authority that it really stands for…

The Newfoundlander and Labradorian at The Bar…

M42BC
M64WI

#22 Debtslavecreator on 12.30.16 at 7:50 pm

TNL@TB = the nice lady at the bank

You know, the one who is friendly and seems to care about you but then keeps pushing product after product on you to meet her stupidly high sales target so that she can avoid losing her BS low paying job within 6 months of her review

Btw, she might tell u she doesn’t work on commission so she is being honest but she is probably working under an even worse system that uses sales points

Most of the people who succeed are those who screw their clients by pushing products that earn the most sales points which means they make the bank the most money

Never ever take “advice” from the TNL@TB or local CU

#23 Smoking Man on 12.30.16 at 7:51 pm

Booze without tunes is like sex in the dark.
Guess it depends if you’re wearing depends.

Not there yet but close.

#24 drydock on 12.30.16 at 7:55 pm

” or own cats”

………………………………………………………………

Meow meow.

#25 InvestorsFriend on 12.30.16 at 7:56 pm

TFSA Withdrawals?

“The good news is Canadians have put $45 billion into TFSAs. The bad news is they withdrew $18 billion.”

**************************************
The TFSA is great for disciplined investors who will put it into growth things and let it compound.

As the quote indicates, for many people, the money in a TFSA is too accessible and they take it out. For those people the RRSP has the advantage that the money is far less accessible.

I like and use both vehicles: TFSA and RRSP.

#26 Nonplused on 12.30.16 at 8:05 pm

Ok, now I am coming back to the “carbon tax”, which I and a few other commentators ventured onto yesterday. I think it’s a valid topic for Garth’s blog which is still primarily about real estate but has morphed to probably being at least 45% finance. Well why not those two are connected hugely.

However, these coming “carbon taxes” are going to affect the economics of things too, so I think they are a valid subject for this blog.

The first thing I want to say is that I am not denying that carbon may cause the world to warm. I don’t know. Some scientists say it will and other people, mostly greenhouse operators who have put CO2 in their greenhouses saw an increase in plant size and growth rates but didn’t report on an increase in temperature. But to me it doesn’t matter. Let’s just assume burning fossil fuels is causing a slight rise in global temperatures (very slight when compared to how cold night would be without our atmosphere or hot day would also be without it. Nothing could live.)

So, does taxing alcohol in Canada reduce consumption of alcohol in China? Will taxing CO2 in Canada reduce emissions of CO2 in China? Nope. It will just make it even cheaper to run a factory and employ people in China than it already is, less jobs for Canadians and more for the Chinese.

Global CO2 emissions are not gong down until we start running out of economically recoverable oil and gas and coal. They simply won’t. I don’t know if that’s already started or if it’s 100 years away but it is a fact, that’s how it will unfold. If we curtail our consumption through some sort of tax incentive the Chinese are just simply going to thank us for the cheaper oil and send us more products we can’t profitably make due to taxes. They won’t stop, and they don’t care that the world might be 3 degrees warmer in 30 years. They just don’t care, their current problems are much more pressing.

Carbon taxes are simply a “tax on everything”, even the food you eat. There is no current alternative to burning fossil fuels, they are the lifeblood of the economy.

Solar and wind may reduce the rate at which we consume fossil fuels, but they can’t at this point without a miraculous battery invention change the fact that you still need the fossil fuels to run this blog on cloudy days. That results in a duplication of capital expenditure.

The carbon tax is a scam. We can’t stop burning coal, oil, and natural gas and still drive our cars, heat our homes, and read Garth’s blog. We don’t have an alternative as of yet. Not globally anyway.

The carbon tax is a scam. A very brilliant scam, they have some how convinced you and many other people that you have to pay a higher tax for your own good. You are saving the planet buy paying higher taxes. Of course the government will just use the money to pay for other consumption of energy, but you are saving the planet by paying more tax. If you buy this you are a fool.

The “carbon tax” will accomplish no more than raising the “harmonized” GST. It’s a scam.

#27 InvestorsFriend on 12.30.16 at 8:06 pm

Will TFSA riches mean a reduction to the old age pension?

#16 TS on 12.30.16 at 7:22 pm said:

You take about Governments needing to raise tax rates in the future, this TFSA loophole will be closed way before that.

Unlikely since TFSA contributions are after-tax. — Garth

**************************************
I don’t know if they would use the TFSA to means test the Old Age pension. They do use income from margin accounts which are also after-tax. What the government giveth, the (next) government can taketh away.

Sorry, but I think the argument that money earned from an after-tax investment should NOT be taxed is quite spurious. The general rule is earnings are taxed with some exceptions. Investors can be thankful that SOME earnings are tax exempt but they are wrong to then claim that all earnings on after tax dollars should be tax exempt. That dog don’t hunt.

Breach of covenant. Political suicide. — Garth

#28 millennial #2163 (don't shoot) on 12.30.16 at 8:08 pm

I’m a millennial looking to help my folks who are 10 years away from retirement.

A few weeks back my mom mentioned that she has to “go to the bank to buy an RRSP”, her words. I asked her what she meant and she said she does that every year. I think she means a GIC or some bundle of mutual funds. Any ideas what that might mean? I tried directing them to the blog but it didn’t seem to stick when they read it.

#29 crowdedelevatorfartz on 12.30.16 at 8:09 pm

@#6 Harbour
“What if your a moronic loser and have $250,000 of Capital Losses?”
*******************************************
Oh !
I see you have my old “financial advisor” handling your money…..

Time to move?

#30 InvestorsFriend on 12.30.16 at 8:17 pm

Some Tax Benefits that people with good jobs and high incomes can usually benefit from that lower income earners usually cannot.

Pension contributions, tax deductible (no pensions for most low income jobs)

RRSP contributions tax deductible (low income usually can’t afford it)

TFSA earnings (low income usually can’t contribute, but yes maybe in future and the room is carried forward)

RESP grants and income taxed in the kids names (Ya gotta have some extra cash to take advatage of this)

Medical benefits plan is not considered a taxable benefit (low income usually have no such plan)

Tax deferral of capital gains in non-registered account. same reason as above)

Half tax rate on capital gains and low tax rate on dividends (yeah, same reason as above)

So, yes the higher income earners get a LOT of tax breaks. In the end yes they do pay a good chunk of their income in taxes. But they get a LOT of tax breaks. For which not a lot of gratitude is ever shown in my experience.

High income earners would be silly not to take advantage of thes things and most do.

#31 InvestorsFriend on 12.30.16 at 8:22 pm

Failure is an orphan, success has a thousand parents.

Applies to every failure and every success in life.

#32 Smoking Man on 12.30.16 at 8:24 pm

Happy new year to pure bread dogs and muts.

Ladies forget head, focus on the tee shirt and let your imagination run wild.

https://dyslexicsmokingman.blogspot.ca/2016/12/face-time.html

I love life. Shoot me lefties.

#33 DON on 12.30.16 at 8:25 pm

#4 Don Chogni on 12.30.16 at 6:39 pm

Been following this blog for a long time and still can’t figure out what “TNL@TB” means.
**********

The Nice Lady @ The Bank

#34 It’s time - MASHDEX on 12.30.16 at 8:36 pm

[…] Read more here:: http://www.greaterfool.ca/2016/12/30/its-time/ […]

#35 TurnerNation on 12.30.16 at 8:40 pm

Smoking man no the saying is: Sex is like photography it develops better in the dark.

(Of course only cougars would get this pre digital camera reference. I’m a male cougar….)

M41ON

#36 Smoking Man on 12.30.16 at 8:42 pm

Say you know tomorrow your kicking the bucket.
All the sacrafise meaningless. Poor Boom, he was short changed. God’s an asshole at times.

What would ya do?

Great minds want to know.

#37 Pete on 12.30.16 at 8:44 pm

12 Nonplused on 12.30.16 at 7:16 pm
The vast majority of Canadians will never maximize their TFSA’s or their RRSP’s. That said, they are both great programs (the TFSA being the better),
——————————————
TFSA’s are just another step on the road to bank Bail-ins. Money or investments registered in a TFSA are considered to be property of the bank as is the money in your bank account. I’m surprised that so many people who are aware of the peril of the coming bank ‘bail-ins’ are unaware that the TFSA simply puts that many more of your assets under the direct control of the banks.

Deposits are liabilities of a bank, not assets. You are embarrassing yourself. — Garth

#38 SmallBusiness on 12.30.16 at 8:45 pm

Hey Garth,

I know you are secretly an expert on the subject — what pot stock should I bet on in my TFSA?

Thanks big guy.

#39 Pete on 12.30.16 at 8:48 pm

“You take about Governments needing to raise tax rates in the future, this TFSA loophole will be closed way before that.”
Unlikely since TFSA contributions are after-tax. — Garth
—————————————–
Actually, I would say highly likely to absolutely certain since TFSA’s will represent one of the last large pools of money that can be easily ‘nationalized’ in case of a banking ’emergency’.

Tinfoil alert. — Garth

#40 hope & ruin on 12.30.16 at 8:49 pm

#26 Nonplused on 12.30.16 at 8:05 pm
mostly greenhouse operators who have put CO2 in their greenhouses saw an increase in plant size and growth rates but didn’t report on an increase in temperature.
________________________

But that doesn’t really prove or disprove climate change. The plants grew more because they metabolized the extra CO2 and converted it back into O2. So there really wouldn’t be any “free” CO2 floating around in the greenhouse “atmosphere” to cause the greenhouse effect we see on earth. If that makes sense.

The analogy doesn’t work because the earth doesn’t have that ratio of plants (toronto doesn’t look like the amazon), our atmosphere doesn’t ‘trapped’ the CO2 to such a close proximity, no oceans in a greenhouse, etc.

You’re right about carbon taxes being bs tho, just another way to tax ppl. In my opinion, people shouldn’t waste their time debating climate change, the science behind it is solid. Their time would be better spent debating what policies we should use to deal with it, the ideologues and crusaders like Butts are driving the bus now. But I think a lot of their policies will end up causing more problems anyways.

#41 Nonplused on 12.30.16 at 8:52 pm

Oh and I had another “global warming” idea. Assuming the warming is actually coming at some point, it hasn’t yet having been trough half the resources, what happens?

So they say 3 degrees (Fahrenheit I think, let’s use Celsius so the change is bigger). Turn your thermostat in your house from 20 degrees Celsius to 23 and wait. Wait…. Wait a little longer…. What died? Did you die? Obviously not if you are still reading this but you might have taken off your fussy plaid shirt. Did any of your pets including fish die? How about the plants how are they doing? You mean nothing died? Global climate change may be real but the solutions are all scams.

#42 mike from mtl on 12.30.16 at 9:01 pm

Damn right!

TFSA is the best thing ever, of course it’s too small to be considered for the taking at this point from the gooberment. Though it is a slight concern in the back of my mind, being fully ‘registered’ and all.

Still I keep dividends producers there as the 5.5k/yr is way too small. This way I get an extra ~3k/yr of cash to reinvest completely tax free.

Sure I sacrifice less room for equities that can’t be undeclared cap gains, but the realised $$ growth for now is mostly contributions. Power of compounding.

From a taxation point non-reg is very favourable (for now) on canadian dividends; free income. Folks are too busy keeping afloat paying their shacks in slurry and hongcouver. Well for now until the tide goes out on that, the banks further get enriched along with me!

#43 NEVER GIVE UP on 12.30.16 at 9:04 pm

#26 Nonplused on 12.30.16 at 8:05 pm
Of course the government will just use the money to pay for other consumption of energy, but you are saving the planet by paying more tax. If you buy this you are a fool.

The “carbon tax” will accomplish no more than raising the “harmonized” GST. It’s a scam.
===============================

Well said Nonplused,
Just look at how severely the Ontario Government has punished their citizens by picking wind power. The hydro rates are the highest in North America.

Here is the inconvenient truth: If Solar or Wind Power can compete with Oil It will be adopted very quickly. The proponents of these technologies continue to fib about the cost per KW hour.

If they get to the point where it is commercially viable I will be first in line to use it.

For now the carbon tax will go into general revenue so governments can spend on things like 1.8 billion dollar security arrangements for the G20 Meeting in Toronto.
in 2010.

You could have built a small city for a fraction of the price in Cold Lake Alberta or Yellowknife NWT, with a full airport in place and no need for even a fraction of the security. Then you could have left the town with lasting legacy structures of value instead of wasting all the effort to “show off” Toronto.

https://en.wikipedia.org/wiki/2010_G20_Toronto_summit

#44 NEVER GIVE UP on 12.30.16 at 9:11 pm

Politicians take note:

We lowly Plebeians are remembering your frauds and your EGO driven largess’s for much longer as we get smarter!

Be careful what you spend on if you want to be remembered after your time is up.

#45 Harbour on 12.30.16 at 9:12 pm

#29 crowdedelevatorfartz

Nope, just played to many Canadian junior mining stocks

Tried bottom fishing to many times

Played VIX’s to many times

Blue chip……. what’s that? lol

#46 TS on 12.30.16 at 9:13 pm

Garth knows there’s no way that the TFSA will be let grown to $500,000 for both spouses while both of them collect Full OAS.

This is easy pickings for a Federal Government in need of cash.

You may not have to pay tax on it, but income made of a TFSA will be used to determine government benefits in the future.

You take about Governments needing to raise tax rates in the future, this TFSA loophole will be closed way before that.

Unlikely since TFSA contributions are after-tax. — Garth

========================================================================

Using TFSA withdrawals to derive a formula to calculate government benefits (which OAS is) is completely legit.

It’s the same as the province wanting to know if you have $500,000 in TFSAs before they cut you a welfare check.

OAS = senior’s welfare which is somehow forgotten by most people

#47 Another mil on 12.30.16 at 9:15 pm

@ #28

This was happening to my parents too. The best advice I can give is download the PDF ‘if you can’ it’s a zero too savvy guide to index investing for retirement with every possible piece of supporting evidence for why it works as opposed to other investment strategies. Warning it’s really just a book pointing you to other books. When you’re done with that read the Canadian couch potato blog for Canadian spasific implementation details. At that point I’m convinced you’ll be armed to be persuasive enough to help them. It took me a year to convince my parents but now they are very happy I did. Don’t it discouraged if it takes a while. Good luck.

#48 Ronaldo on 12.30.16 at 9:27 pm

#5 Crowdedelevatorfartz

Why wouldnt they just send you a nasty letter and negate any overcontribution gains as fully taxable?
—————————————————————–
Because there is no money in that. The government saves millions of dollars on people who are not aware that they are entitled to certain benefits like the GIS. Billions have been saved on that one thing alone. You have to do your own research.

#49 Grey Dog on 12.30.16 at 9:36 pm

#28 Millennial,
To bad you didn’t ask before Christmas, you need to BUY them Daryl Diamond’s book for Canadians “Your Retirement Income Blueprint” I think it may be in a second edition now. 10 years out from retirement, I would advise them to make an appointment with a Professional Financial Advisor…NOT TNL@TB! If they are expressing an interest, hit the library Retirement section.

Good Luck Millennial! Don’t lose heart, I recently found out myself “You can lead a horse to water, but you can’t make em drink.” (Much to my extreme dismay.) YOU please stay focused, since you have discovered this sight/light!

#50 JJ on 12.30.16 at 9:41 pm

#8 Timmy

“But let’s remember that with the exception of this past year, the TSX has sucked in performance and of course you don’t want to hold US equities in a TFSA.”

Why not?? 80% of my TFSA is in USD and US listed stocks/ETFs. I’m not getting why you wouldn’t want US equities in an ETF. Can someone explain?

#51 SWL1976 on 12.30.16 at 9:41 pm

#132 Wrk.dover

#127 You just shot the messenger trying to relay the much simplified explanation he got from a scientist .

===========

That sounds about right. Most readers of this blog realize that Barfway Skytrain is incapable of rational conversation. Vancouver real estate is their topic of choice and that is anything but rational.

#26 Nonplused I agree that a carbon tax is a complete scam. Modern governments a incredibly efficient at being inefficient with tax dollars collected. Much like we are now being told to pay tolls on public highways that should have be bought and paid for with previously collected tax dollars.

One big problem I have with the group think that sometimes infects this comments section is that as soon as you mention climate change you’re all of the sudden branded into a person who supports a carbon tax. I clearly see that this carbon tax is a complete scam, but I also see that the current path we are on is creating a real tuff row to hoe for future generations.

My solution to the mess is much more simple than a carbon tax and while I may be just one person at least I am doing my part. For if you are not part of the solution you are part of the problem. I am very particular with where I choose to spend my money and what I spend money on. Same with investing. I choose not to support what I feel are businesses with a low moral conscious with regard to how they treat people and the environment.

It may not be much but it is the least I can do

#52 Jungle on 12.30.16 at 9:44 pm

2016 XIRR says TFSA up 34.17%, hers 32.93%. We had the right stuff inside.

The biggest dividend from TFSA will be all the social benefits you still qualify for as Garth pointed out, you can be poor on your tax return but rich in your assets. Like the story of the Asians collecting welfare with 1m houses in Vancouver..

#53 Metaxa on 12.30.16 at 9:51 pm

Pay your TFSA fees from within your TFSA and the entity manging your TFSA gets paid.

Pay your TFSA fees outside your TFSA, with “other” money and your managing entity gets paid AND you can deduct those fees as an expense.

#54 Context on 12.30.16 at 9:52 pm

#28 millennial #2163:- It means your too late and she is being hooped, but that is what the banks do.

#55 paulo on 12.30.16 at 9:54 pm

Happy New Year To Garth And The Chart Dudes,you rock!
some new years resolutions for my “deplorables” brother and sisters to consider:
1. don’t be a sucker and buy in at the top of the Real Estate Market
2. Pay down debt and save,use the TFSA as your vehicle to riches
3.remember the less fortunate,give something to the local food bank,or charity karma is great.
4. Enjoy a great new years drunk glen anybody will do,but do not drink and drive, the hangover will be long and cover the new year for many.

#56 hope & ruin on 12.30.16 at 9:54 pm

T2’s been on 16 international trips since taking office. Apparently, he had no choice since 24 sussex was being renovated for a hydroponics system and an arcade. Our PM is so cool.

#57 Jungle on 12.30.16 at 9:55 pm

Renewed mortgage today, 2.51% fixed (2 years) Banker said rates have gone up already in last few months (Scotia)

When I said GOV has also made a lot of changes lately to mortgage rules, she said “people are house poor”

Not good when your banker says that!!

#58 Hotdogs from Heaven on 12.30.16 at 9:56 pm

Note that U.S. investments are treated differently in a TFSA than they are in an RRSP.

You will still be nailed for U.S. withholding taxes for dividends or interest in a TFSA because there is no treaty between Canada and the U.S.A. that recognizes that account. There is for RRSPs which is why there is no withholding tax for U.S. income earned in them.

#59 Fish on 12.30.16 at 10:04 pm

just was told my best friend died, my four legged gentle friend, I will miss her

Nothing gold can stay. — Garth

#60 Ret on 12.30.16 at 10:05 pm

#26 “The “carbon tax” will accomplish no more than raising the “harmonized” GST.”

Indeed, it will be worse than a raising the harmonized G.S.T. At least the G.S.T. shows up on a bill of sale for a transaction.

Carbon taxes will be a hidden tax in every good and service that you buy, even if the good or service is not currently GST taxable.

A loaf of bread will rise in price due to the increased carbon taxes that will add additional costs for energy to farm the wheat, bake the bread and transport the product to stores but citizens will continue to think of bread as an untaxed food staple.

The heating costs for your child’s classroom will rise. Public transit costs will go up too. The list of increased costs for every individual, family, and business in the economy is a huge unknown.

The reality is, we don’t know whether the average individual or family will be out a few hundred dollars a year for all of those hidden carbon taxes buried in all goods and services, or a few thousand dollars.

Income tax rates will be less meaningful as governments add on taxes that your accountant can’t get you out of, such as health premiums (from “it’s not a tax,” Dalton), and embedded carbon taxes on every good and service that you consume (that would be you Kathleen.)

Methinks that we will all pay now but that the progressives will pay later. They have totally mislead and misread the electorate on global warming, carbon taxes, free trade, immigration, … and just about every other file that affects Canadians.

#61 millennial #2163 (don't shoot) on 12.30.16 at 10:22 pm

#52 Context on 12.30.16 at 9:52 pm
It means your too late and she is being hooped, but that is what the banks do.
………………………

Financially they will probably be ok, a couple rental houses (that they don’t make money on) plus company pensions. They only both worked 60hr weeks for 40 years and never spent a cent so how bad can they do? Problem is I think they would be a lot more secure if they were invested properly, could have money to travel, and I hate the thought of someone taking them for a ride.

They are very susceptible to cons and frauds unfortunately. But there’s not much I can do or say about it, they’re both adults.

…………………….
#47 Another mil on 12.30.16 at 9:15 pm
This was happening to my parents too.
……………………….

Ok thanks mil, I’ll give that “if you can” book a shot. I might have to leave it laying around for them they don’t take kindly to getting advice from me. Anytime I try to, very gently, talk to them about it all I ever hear back is how much money they made with no “fancy education” so “why should they listen to me?”. Their senile years will be interesting to say the least.

#62 For those about to flop... on 12.30.16 at 10:22 pm

I got the wife to pick up some party poppers to let off when the Dow Jones busted through 20,000.

Guess I will just use them tomorrow night…

M42BC

#63 assessments are posted on 12.30.16 at 10:23 pm

Looks like BC Assessments site already updated for current year (for anyone who’s interested)

#64 Financial illiterate on 12.30.16 at 10:24 pm

Garth..
Please explain the steps after you open the tfsa or who to talk to transfer the funds from the tfsa to an investment..
I’m lost there.

#65 Peter on 12.30.16 at 10:28 pm

Does anyone know what happens to a TFSA after the person is deceased?

———-

Nothing at all, except that as of the date of death it is no longer a tax free account. It becomes part of the estate of the deceased unless there is a beneficiary identified, in which case it becomes the property of the beneficiary without being counted as part of the estate.

#66 acdel on 12.30.16 at 10:31 pm

#27 InvestorsFriend
Breach of covenant. Political suicide. — Garth
————————————————————–

I should hope so! Mind you the income trust fiasco was a failure to all that invested and believed in it; do not even try to defend this absurd lie to the general public of eliminating it (RIP you know who and the mighty party at the time) , yet, they got elected, cannot remember the timeline here, were you Garth in Government at the time? If so, what was your vote that destroyed billions in savings and investing? Biggest monetary loss media never investigated barely reported on. Why????
What a fricken joke!

So what’s the different s this time around?

#67 diharv on 12.30.16 at 10:46 pm

And Stephen Harper’s doubling of the TFSA’s limit wasn’t for political reasons ? Jeez , it was in effect for what , less than a year ? Get over it already !

#68 mike from mtl on 12.30.16 at 10:46 pm

#58 Hotdogs from Heaven on 12.30.16 at 9:56 pm
Note that U.S. investments are treated differently in a TFSA than they are in an RRSP.

=====================================

Exact.

Holding US equites in a TFSA is fine but the dividends are subject to withholding tax before it even gets there. Nothing stopping from holding direct USD listed shares, just dividends / income is taxed around 15% (I think). Me, I hold the TSE (unhedged) version as the forex to do so is on the way in very inefficient, and negates much of the gain.

Not so in a RRSP or LIRA. Hold PFF or VOO directly if you want. Though to get CAD>USD in there is still the same issue.

#69 Show me the Money on 12.30.16 at 10:48 pm

What about using your tfsa for a down payment on a house?

#70 Irish Stew on 12.30.16 at 10:50 pm

Even less money January 1st w/ carbon tax activating.
Feels like we work to pay tax only.

:(

#71 Polls R Phake on 12.30.16 at 10:51 pm

#40 hope & ruin on 12.30.16 at 8:49 pm
#26 Nonplused on 12.30.16 at 8:05 pm

In my opinion, people shouldn’t waste their time debating climate change, the science behind it is solid.

________________________________________

Why do the socialist lefties keep using this BS line “The science is solid”

If you knew anything about science you would know it is never solid. And in this case……..Global Warming is about as solid as the water that is supposedly being created from the ice that never melts. Ten years later…..where are all these underwater shorelines? Yes exactly.

Meanwhile here in North America……95% of the USA and Canada is below zero.

Happy New Years fools !!

#72 Bank of Millenial on 12.30.16 at 11:12 pm

Ready to pull the trigger on another $5,500 in the TFSA.

Make TFSA great again. *Shakes fist*

#73 Tony on 12.30.16 at 11:18 pm

Re: #10 Jeff on 12.30.16 at 7:06 pm

With the lofty levels of the stock market indexes that 80 percent figure can only go higher.

#74 Original dave on 12.30.16 at 11:43 pm

G, earlier in the week I think you mentioned the date jan 23rd as a date to watch for…or maybe I misunderstood. Anyone know what the date means?

#75 Unknown Marketer on 12.30.16 at 11:48 pm

Post #13 Mint Coins in tfsa? Now that’s interesting
I did not know that. What else can we stuff into that
Tfsa :)

#76 Fiendish Thingy on 12.30.16 at 11:51 pm

Happy New Year! (For some, for debt slaves, not so much)

I’m surprised no one has posted this yet:

http://bc.ctvnews.ca/all-hell-is-going-to-break-loose-in-vancouver-ex-trader-s-real-estate-forecast-1.3222636

This is about one of the traders portrayed in the Big Short who predicted and profited from the US real estate crash, is now shorting the Canadian mortgage market, predicting Vancouver will drop 50-80%…

#77 hope & ruin on 12.30.16 at 11:54 pm

olls R Phake on 12.30.16 at 10:51 pm
Why do the socialist lefties keep using this BS line “The science is solid”

If you knew anything about science you would know it is never solid.
_____________________

I said solid, not impenetrable. And actually a lot of science is solid at least at the level we deal with on a day to day basis.

I don’t know which socialist lefties you are talking about. Either way, I’d take that label over unintelligble, moron any day. That includes climate deniers who struggle with basic physics.

Let me guess, you were the dumbass who failed out of first year because he spent 6 months trying to disprove equations of motion.

#78 bdy sktn on 12.31.16 at 12:10 am

Why do the socialist lefties keep using this BS line “The science is solid”
……
Because they don’t know science but are parrots.

……..
If you knew anything about science you would know it is never solid. 
………
Well….maybe not quite….

The scientific method always requires TESTING of ideas to validate them.
When a test passes repeatably the idea can become a LAW.
There are many laws https://en.m.wikipedia.org/wiki/Laws_of_science
They are solid.
We can make a global warming law if we create an identical system (planet) keep all other variables the same alter the CO2 and see if it heats up. As this is clearly impossible we have only theories. Ipcc models are weak, incomplete, amateurish and biased. A huge majority of climate “scientists ” couldn’t get a job at a rubber chicken factory, let alone Boeing, GE or Bechtel.

#79 Lobster Man on 12.31.16 at 12:15 am

Garth has always said that investing in stocks are too risky, unless you have a seven figure portfolio.
But investing in stocks inside your TFSA has an additional risk.
Let me explain why that is the case.
Go to the CRA TFSA Website; read up on “Qualified investments”, and also get familiar with the section spelling out when one has a “Non-qualified investment” in his/her TFSA, there may be a tax/penalty involved.
Under certain circumstances, a stock which was a qualified investment could become a non-qualified investment overnight.
A simple example would be when the company just filed for “chapter 11 – bankruptcy protection”, immediately got delisted from the stock exchanges. After the delisting, the stocks would become non-qualified investments (CRA’s definition). And you can’t sell the stocks!
Some brokerage houses will get rid of the stocks for you and from your account. But some would do it only after a certain waiting period.
The fact that your account holds a non-qualified investment during a particular tax year is a reportable event to the CRA.
So in the end you may have to pay additional tax/penalty over and above your initial cost of acquiring the stock.

#80 Bottoms_Up on 12.31.16 at 12:16 am

#71 Polls R Phake on 12.30.16 at 10:51 pm
————————————–
Get real. Science is often solid, from deciphering the structure of DNA (and figuring out how it can make people like you stupid), to understanding how vaccines work (immune system stimulation) and development of our entire pharmaceutical industry (are you saying GSK develops drugs on a whim?).

Science can be and is very robust.and solid.

Regarding climate change, the facts are indisputable. Theory, observation, and facts all support each other. This is the very definition of solid science. Climate change and global warming has been proven my friend.

#81 Terry on 12.31.16 at 12:23 am

“Unused contribution room (as with RRSPs) never goes away. It accumulates year upon year, usable at any time. Just make sure you file an annual tax return to claim yours.”

Garth, What are saying here? If unused TFSA contribution room accumulates year upon year what does filing your annual tax return have to do with your accumulated unused TFSA room? What are we “claiming” with our TFSA’s on our Tax returns?

As stated. — Garth

#82 Bottoms_Up on 12.31.16 at 12:24 am

#60 Ret on 12.30.16 at 10:05 pm
————————————
You talk of hidden carbon costs. Unfortunately, we are already paying the price, via insurance and environmental and livelihood scale. Think floods and wind storm damage….droughts and food prices….heat waves and increased hydro….and those unable to deal with heat stroke….morbidity and death.

We have already paid a significant price for our carbon, and will continue to do so.

#83 BH on 12.31.16 at 12:24 am

With 2 kids under 6, is it better to contribute to rrsp rather than tfsa in order to keep taxable income down for child tax benefit? Does this reduce income for calculation of highr CTB?

#84 Bottoms_Up on 12.31.16 at 12:30 am

#26 Nonplused on 12.30.16 at 8:05 pm
———————————–
Carbon tax is not a scam, it is an incentive to pursue alternatives, which ultimately will pave the way to human sustainability.

#85 Demographics is Destiny on 12.31.16 at 12:42 am

DELETED

#86 Nonplused on 12.31.16 at 1:03 am

12 Nonplused on 12.30.16 at 7:16 pm

The vast majority of Canadians will never maximize their TFSA’s or their RRSP’s. That said, they are both great programs (the TFSA being the better),
——————————————
“TFSA’s are just another step on the road to bank Bail-ins. Money or investments registered in a TFSA are considered to be property of the bank as is the money in your bank account. I’m surprised that so many people who are aware of the peril of the coming bank ‘bail-ins’ are unaware that the TFSA simply puts that many more of your assets under the direct control of the banks.”

THESE ARE NOT MY WORDS.

Deposits are liabilities of a bank, not assets. You are embarrassing yourself. — Garth

Garth is right (again, it’s getting sickening) deposits are liabilities of the bank and it is loans and such that are the assets. Here is a quick check card to keep it straight: Things that the banks get money from like loan interest are assets. Things the banks pay out on (or at least used to) like deposits are liabilities. If that doesn’t quite get it straight for you things that the bank is owed and can collect on like a mortgage are assets. Things the bank would have to pay out if asked like deposits are liabilities.

If you have a mortgage, the bank technically has an interest in your house and receives revenue beyond what they lent you. Asset. If you give the bank money and they owe you interest, liability.

That said, if there are bank bail-ins in Canada I imagine the world will be in a whole world of hurt and whether they bail-in your TFSA will be the least of your problems. They will also be “bailing-in” your gold through some sort of property or capital gains tax (really the same thing). And you have to take your gold to the bank because I have a few 1 ounce gold coins, and I can tell you the only place they have exchange value is at a bullion bank. Most people just don’t know what they are and aren’t going to give me over $1000 for one. I have more than a few silver coins but even there I can only trade them in at coin shops, and for less than the silver is worth. They make their money on the buy as much as the sell.

I saw an interesting and somewhat humorous youtube video where a guy was trying to sell a 1 ounce maple leaf gold coin on the street in the US, California somewhere I think, for just $50 and he couldn’t get any takers. If I were there and the coin looked and weighed about right I’d have bought it for the $50, but none of these morons wanted anything to do with it. This is the problem with gold. The only people who know what it is worth are the same people who run the banks.

#40 hope & ruin

I am not arguing with you and I am not saying I know enough about it to say whether the projected increase in CO2 is a problem. I will try and make myself clear: Additional CO2 emissions may warm the earth as many scientists have claimed.

What I am saying, and I think you agree, is that a new tax on carbon isn’t going to fix anything but the government’s budget, if it even does that.

#43 NEVER GIVE UP

Thanks for commenting and I don’t see any disagreement between us. It’s like Al Gore flying around on his private jet. Climate change and carbon taxes are for the little people.

#51 SWL1976

Sort of agree but I don’t know what the alternative is, other than carbon taxes aren’t it.

#60 Ret

Very encouraging to see the number of response-backs I am getting tonight which indicate I am not the only one who took the “red pill”. Thanks for your comments, we need to spread the word!

And again it isn’t about whether the climate is changing because of CO2, but about whether the government is using it to make another tax grab and yet do nothing about it!

#71 Polls R Phake

Umm, I am not sure I ever said the science behind climate change was solid, and I am not sure it is. I am not sure it isn’t either. I am just arguing that even if the science is solid we don’t have much choice right now and carbon taxes won’t change anything except the government ledgers.

#87 willworkforpickles on 12.31.16 at 3:05 am

30 years? that’s too funny…do you really think TFSA will be around in 30 years.

Of course. It is less generous than the RRSP which is over 60 years old. — Garth

#88 When Will They Raise Rates? on 12.31.16 at 4:12 am

Another little known fact, not mentioned on this blog:

The best performing asset of 2016 was Bitcoin.

#89 Felice Anno Nuovo/Happy New Year on 12.31.16 at 5:19 am

Thank you Garth et. al. for keeping me abreast of what is happening/matters in the Canadian economy and how to invest accordingly (and other worldly, strange science and poetic posts by your disciples).

I now have learned to read your blog the day after (to avoid spitting up thru my nose my morning espresso + grappa, for the humor)…why the New Year thanks a day in advance.

Blog on Garth.

Ciao d’Italia.

Let 2017 be not so grim that we get a well deserved economic miracle and renewed prosperity.

bsant

#90 liquidincalgary on 12.31.16 at 5:56 am

@ Nonplused on 12.30.16 at 8:05 pm

=======================================

yes, carbon tax/cap & trade are scam$. it’s why third world countries strongly back them. transfer our wealth to them…for “carbon credits”

oh yeah, a carbon tax is a tax on life itself…we are carbon based beings

#91 Stock picker on 12.31.16 at 7:55 am

If you bought only one stock ….TD Bank ….your return over 30 years would have been 50% higher. Equity ETF? Why leave so much money on the table and pay the MER?

No balance. No diversification. Market risk. Sector risk. Currency risk. Rate risk. Higher vol. Thoroughly bad idea. — Garth

#92 Shawn on 12.31.16 at 8:18 am

The comments re: TSFA skepticism here are hilarious. No wonder why the Liberals easily latched onto the populist meme to roll back the contribution limit to buy votes from the non savers. I miss the $10K limit. It was one of the few good policies the Conservatives put in place for the average Canadian. Maybe we will see it again someday…

#93 bdy sktn on 12.31.16 at 8:36 am

#76 Fiendish Thingy on 12.30.16 ….
This is about one of the traders portrayed in the Big Short 
…………..
A bold call yes but not the first.
Garth wrote a column on the last time this was tried by big shot usa dudes.
Dudes who were completely and totally wiped out nortel style. …….

From this finest of blogs 2013…
“So Daniels came to see me as part of his research for a new hedge fund, to be launched in a few weeks, called the Spartan/Libertas Real Asset Opportunities Fund, which is betting heavily Canadian homeowners are but months away from an insecticide cocktail. And while it’s not easy to short the housing market here (as it was in the States), Daniels and his colleagues are determined to try”

Shorting Toronto and van since 2013 is the worst bet they ever made.

#94 Wrk.dover on 12.31.16 at 8:39 am

When they aren’t busy denying the science of man made climate change, they can be found in a local church basement teaching Sunday school.

This’ll get ’em wound up as much as they wind up the ones whom they dispute.

#95 bdy sktn on 12.31.16 at 8:50 am

4 Original dave on 12.30.16 at 11:43 pm
. Anyone know what the date means
……
Markets are open and MAGA begins!

#96 OMERS on 12.31.16 at 8:51 am

I like TFSA’s utilizing ETF’s and the OMERS AVC (additional voluntary contributions) account….last year the AVC had a 6.68% return…..Awesome :) This year might even be little better from what i’m hearing…another 30 years of work and looking at my AVC account grow…i’m down

#97 IHCTD9 on 12.31.16 at 8:54 am

#16 TS on 12.30.16 at 7:22 pm

…You take about Governments needing to raise tax rates in the future, this TFSA loophole will be closed way before that…

—–

The fact that you can take tax free gains from a TFSA and draw them as income in addition to whatever CPP and OAS you contributed to for your whole working life is not a “loophole”. That is exactly what we are all allowed to do and everyone including the government (at this point) approves.

I think what you might have meant to say is that the government may someday take those Canadians who sacrificed their entire lives to save and invest, and will hit ’em with a new “bait and switch” policy which would then take all these poor bastards to the cleaners after the fact.

That may well happen given how our government and Canadians themselves are handling their household finances. At that point, there would be no above board savings for retirement going on at all in Canada, no one would bother trying to play by the rules anymore. Anyone who managed to save anything would quickly be hiding it somewhere where the government can’t see it. The rich folks of the world are already doing this, what’s left of our middle class would be jumping in that line post-haste.

Think about what would happen if our government gave Canadians reason to believe that there is no long term safe haven for their life’s savings in this country.

Not too hard to figure out a couple likely scenarios is it?

#98 Thanks Garth on 12.31.16 at 8:57 am

We opened our 18 yr old’s tfsa and fully funded , $5500. 2017 contribution to be made next week. We showed him your numbers , value of the account in 30 years if he were to stick to it.

In time , he’ll have to make the contributions with earned income ….see how that goes ….

#99 bdy sktn on 12.31.16 at 9:02 am

Here In a hot sleepy Mexican fishing village (overrun with Albertians btw) on the carribean I can report re prices are not unlike vancouver. 1m gets you an ok smaller house on a smaller lot up a few blocks from the beach. Decent beachfront house starts at
2M.
I’d imagine this is about 150-250x local avg incomes.

#100 IHCTD9 on 12.31.16 at 9:12 am

#84 Bottoms_Up on 12.31.16 at 12:30 am
#26 Nonplused on 12.30.16 at 8:05 pm
———————————–
Carbon tax is not a scam, it is an incentive to pursue alternatives, which ultimately will pave the way to human sustainability.

—-

You got it buddy, right now the alternative I have pursued is burnning wood for heat to avoid the cost of conventional energy and the non stop parade of taxes levied on it. I am working on a plan also to gasify straw to provide a new source of cheap cash-money no tax heat and to provide supplemental electricity as well.

I have no idea what effect incinerating 10-20 tons worth of straw bales per year has on global warming, but I do know I can get the stuff tax free for dirt cheap and it’s going to save me a ton of money because hydro and oil costs are thru the roof, and always get taxed like crazy.

It definitely is paving the way for a much more sustainable bank account.

#101 crowdedelevatorfartz on 12.31.16 at 9:21 am

@#45 Harbour
“Nope, just played to many Canadian junior mining stocks
Tried bottom fishing to many times….”
********************************************

Yep. been there done that. Got burned so many times on “hot tips” I just stopped buying.

Missed out on some doozy’s though.

PanAmerican Silver when it was $4.75 and jumped to $10 almost over night.
Some copper plays in South America and Africa that went crazy. I think a few of the company junior staff bought houses with cash from those plays.
Missed out on Daivik when I had the opportunity.
And on and on and on.
Got tired of the Hot tips and the VSE mining bs.
Wouldnt touch it with a 10ft barge pole,

#102 bdy sktn on 12.31.16 at 9:24 am

Hey bottoms up I’m going to be running my boat with a big v8 motor(460 ford) a LOT starting this spring. My motorcycle is uncorked and jetted(pollution control hardware removed for more power) and it’s so cold in van I’m tripling my burn rate of carbon tax free firewood.

You MUST ride you bike, rain or shine, for the next 3 years to offset this carbon and prevent certain catastrophe. Thanks for your efforts.

#103 IHCTD9 on 12.31.16 at 9:42 am

#82 Bottoms_Up on 12.31.16 at 12:24 am
#60 Ret on 12.30.16 at 10:05 pm
————————————
You talk of hidden carbon costs. Unfortunately, we are already paying the price, via insurance and environmental and livelihood scale. Think floods and wind storm damage….droughts and food prices….heat waves and increased hydro….and those unable to deal with heat stroke….morbidity and death.

We have already paid a significant price for our carbon, and will continue to do so.
—-

Speaking for myself of course, I haven’t paid jack towards “our carbon”. But if folks like you are paying a premium for it, I’ll up my production!

You’re right though, the last windstorm we had knocked down a tree. I fired up my big-ass chainsaw and sliced that baby up into chunks. Then I fired up my 20,000 lb 50’s diesel dozer, it takes 30 minutes to warm up so I had to wait for that part, it really smokes like a coal fired locomotive until it warms up! Then I pushed the dismembered tree into my “junk pile”, that’s where I put all my “stuff” that costs a mint to dispose of in preparation for incineration.

I then slathered the pile with gallons of used motor oil and hydraulic fluid and tossed an old copy of the Toronto Star I had lit up on top. I then sat back and watched the whole pile go up in a glorious cloud of black smoke and particulate matter.

I didn’t bother getting a fire permit because those guys never leave the station and I figured they wouldn’t show up – and they didn’t. So, then I remembered a big pile of plastic that the recycling guy refused to take, so I heaved that on the pile and watched it turn into a dripping greasy sticky mess. I was thinking it was a good thing that all the little bunnies that were living in the burn pile had run for their lives when I first lit it up, they would not have liked all that goop dropping on their head lol!

Yep, I’ll be glad when global warming is over so I can just bring all that stuff to the dump .

#104 Rainclouds on 12.31.16 at 9:58 am

Felix? You OK ?

Garth is being mean to cats, AGAIN…………..

Your rebuttal is eagerly anticipated

#105 Ana on 12.31.16 at 10:10 am

@74 Original Dave

I thought it was obvious…Jan 23rd is the first business day after Trump is inaugurated on Friday Jan 20th.

#106 Ontario's Left Coast on 12.31.16 at 10:15 am

Our TFSA contributions will get processed on Tuesday. I seriously wish this vehicle had been around since 1999 instead of 2009 – love it!

Question for the Dawgs… For those who wish to retire a little earlier than most (say Freedom 53), I’m hearing more about a strategy where you draw down your RRSPs first, when there isn’t a lot of other income rolling in and before government benefits will take place. Any idea how this works from a tax perspective?

#107 Mickey on 12.31.16 at 10:37 am

#26 Nonplused on 12.30.16 at 8:05 pm

The carbon tax is a scam. A very brilliant scam, they have some how convinced you and many other people that you have to pay a higher tax for your own good

Every government is an occupying government –
Eustace Mullins

We live in a ‘Disney Gulag’-
Jay Dyer

#108 missing comments on 12.31.16 at 10:43 am

Show up if you post. I think.

#109 bdy sktn on 12.31.16 at 10:50 am

#102 vs #103 for Pissing off bottoms up.

Well done tractor dude! You win. I will try harder next time

#110 bdy sktn on 12.31.16 at 10:54 am

OLC
a strategy where you draw down your RRSPs first, when there isn’t a lot of other income rolling in and before government benefits will take place. Any idea how this works from a tax perspective
………..
You already gave the answer. Drain the rrsp tax free or minimally taxed when other income is low or zero.

#111 Bram on 12.31.16 at 11:05 am

#63 assessments are posted on 12.30.16 at 10:23 pm

Thanks for the heads up.
I got hit by +26.6% change.
I wonder if it is above avg, if so, more taxes next year.
Did they post averages somewhere?

https://www.bcassessment.ca

#112 me again on 12.31.16 at 11:06 am

How The Carbon Tax Will Further Destroy Canada – Lies, Deceit, Fraud & Greed

https://www.youtube.com/watch?v=lHcG-EmETXk

#113 Slim on 12.31.16 at 11:18 am

#86 Nonplused

Arguing with a climate change denier is futile, like banging the head against a wall.

http://www.newyorker.com/humor/borowitz-report/scientists-earth-endangered-by-new-strain-of-fact-resistant-humans

#114 Bram on 12.31.16 at 11:23 am

#76 Fiendish Thingy on 12.30.16 at 11:51 pm
This is about one of the traders portrayed in the Big Short who predicted and profited from the US real estate crash, is now shorting the Canadian mortgage market, predicting Vancouver will drop 50-80%…

Shorting tends to be deadly if you don’t get your timing right.

Remember the movie, where the fund manager almost missed the timing window? Houses down, but derivatives not yet because of evil DB?

That is going to happen with Marc Cohodes.
Let’s say there is a -50% in YVR.
Do you think people immediately stop paying their mortgages when that happens?
Nope, first the car, the vacations, the restaurant meals will go.
When finally the mortgage is no longer paid it will be two years later, and Marc’s put options will have expired, and he will have lost his entire investment.

People stop paying mortgages if they lose their job.
Not if their house value plummets.
Mortgages in BC are not non-recourse.

Bram

#115 crowdedelevatorfartz on 12.31.16 at 11:47 am

@#103 IHCTD9

What?
No old half filled paint cans?
No old mattresses, plastic lawn furniture, Christmas packing, wrappers, Safeway bags, tetrapacks, beer cans, pop bottles……

ALL the stuff will burn or melt down.
If yer gonna have a bonfire, make it impressive…make it last!
I’m VERY disappointed.

#116 Coopoiler on 12.31.16 at 11:49 am

#22
Never take “advise” from TNL@TB or cu

My “advise” is never say never!

Well what you say has truth too it. It does not mean that all the information provided to you is wrong. Just think before you act on their advise

#117 Coopoiler on 12.31.16 at 11:58 am

Breach of covenant political suicide–Garth

Well I agree
If it can be spun that only the rich have TFSA, therefore it is not fair. It may not be political suicide just the opposite
Nothing plays better than “tax the rich”
Or “it’s not fair”

Having said that it does not mean you should avoid the TSFA. you need to play by the rules as they currently exist
By way of example, years ago the RRSP limit was $3500.00 per year and if you did not use it you lost it, no carry forward

#118 Context on 12.31.16 at 12:36 pm

#104 Rainclouds:- I know this woman who has both a dog and cat. This was a street cat that sat on her window outside for months needing to be adopted and she took it in eventually. The dog sleeps, but this cat prowls throughout the house all night long looking for rodents. Now that is creepy and her dog is afraid of it, so who needs a cat.

#119 TurnerNation on 12.31.16 at 12:49 pm

Parkdale area of West Toronto – low income and high crime. I always see marked police cars driving its side streets even today.

A skinny scary (unrennovated/unknown) semi is $999,999 on MLS;
a skinny scary but long lot SFH is $1,500,000 there.

A 50% price drop would be a start to match Toronto incomes. Add 100k for a reno and repairs budget.

At least once a month I’m out that way for an event at Drake hotel, or late on a Tuesday (!) night at Brooklynn ($4 shots) and amazing R&B DJs. Hey from 2 star to 5 star venues I’m at home:
https://www.yelp.ca/biz/brooklynn-toronto

Another Parkdale gem is this one, a great date place – its owner works the bar as you sit:
https://www.yelp.ca/biz/the-commodore-toronto

#120 TurnerNation on 12.31.16 at 1:06 pm

#84 Bottoms_Up – there is no alternatives for us tax slaves. Notice on internet message board people argue stuff which actually is mind control. Certain historical events, this carbon tax etc.

Here in Kanada’s cities we have monopolistic utilities: Our choice is Natural Gas or Electricity for heat.
The law even says landlords must heat dwellings to a certain temperature. Where’s that alternative you speak of?

I tried arguing with a lefty millennial – the same one who cut down a real tree (!) for Christmas, and who orders deliveries from Amazon – which just leased a fleet of Boeing 767s (“Prime Air”) to delivery their junk faster.

Carbon tax is mind control and a scam. Period. Pollution will be shifted to unregulated areas by corporations.

I ride public transit, Uber, Taxis and car sharing services; I recycle everything I can. Where’s my alternative to this theft.

#121 Bdwy sktn on 12.31.16 at 1:13 pm

Someone asked earlier about land prices in Bellingham vs Van.

Yes the difference is huge. Cdns can’t live there full time but with a nexus it’s faster to get to our place in WA than many distant van suburbs.

We recently bought the equivalent of about 100 city lots just across the line for the price of a parking spot in a condo in van. On the prettiest little country road one could wish for. Next to a salmon Creek.

Will be building house shop garage etc.
Will live there part time . Full time place to park cars boats tractors etc. I own my own motocross track:)
Taxes are pocket change. Services are at street.

Best deal ever but few cdns know that buying there is even easier than in canada

#122 Tim on 12.31.16 at 1:17 pm

#81 Terry “Unused contribution room (as with RRSPs) never goes away. It accumulates year upon year, usable at any time. Just make sure you file an annual tax return to claim yours.” Garth, What are saying here? If unused TFSA contribution room accumulates year upon year what does filing your annual tax return have to do with your accumulated unused TFSA room? What are we “claiming” with our TFSA’s on our Tax returns?

As stated. — Garth”

If this is true, the CRA’s website is super misleading. It says, in bold text, “You will accumulate TFSA contribution room for each year even if you do not file an income tax and benefit return or open a TFSA.”

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/tfsa-celi/cntrbtn-eng.html

#123 GB on 12.31.16 at 1:21 pm

I have been a reader of this blog now since 2001. And the thing here is that it certainly is a great spot to gain insight into investment advice.

The thing though is that I find the advice rather monocular in the sense that things are laid out as if investing is the only true measure of things.

The real fact is that life is about balance. Sure I could spend my days and nights finding ways to squirrel away as much cash as I can. Avoid the occasional family trip. Not enroll my girls in any recreational activities (have you checked the price of hockey or ballet lately?). I could refuse to have a pet for my 10 year old girl who has been asking for one forever.

Look….I get it. I really do. At the end of the day we all have to be prepared to be financially capable into our latter years but I find the manner in which the advice is dolled out here borderline insulting to the average Canadian.

It is posited to suggest if you are not putting every spare dollar into some investment vehicle than you are some sort of idiot. Recreational activities for kids= stupid. Family vacations =stupid. A family pet-stupid.

Fair enough.

But when life gets evaluated in your latter years, I would think that trading money for life experiences will get looked upon as somewhat shallow.

I’d much rather save what I can….live a fun, engaged and energetic life focused on my family rather than watching my bank account grow and grow.

I might also add that…you know….there is no guarantee that you will live to enjoy all that investment bonanza anyway.

How may stories do you here of where people saved, retired…and died?

My uncle did it and died one year after her retired at 62.

I just wish this blog would stop with the nonsensical and unrealistic fallacy that the average Canadian can pump out 1000$ per month.

Here is a challenge Garth: It would be great to see you break down an average Canadian household expense sheet (assuming two kids)…and show us all how to find 1000$ per month.

So far, every time I have come on here to poke fun at this all you have done is make some snide comment about how illiterate I must be.

Well….I have a budget book with all my recorded spending dating all the way back to 2000. I do save for retirement….but I am as certain as certain could be that your understanding of the average Canadian household is waaaay off.

I love this blog. I’ve enjoyed the advice and put a great deal of it to use. Like I said though, it would be great if that advice could be less about squirreling away every spare dime and started to provide insight on how to invest within the realities of an average family where recreational activities, family vacations and family pets as just a part of living for mots families.

Valid points. But this blog isn’t about average people. That’s what the Huffington Post is for. — Garth

#124 NEVER GIVE UP on 12.31.16 at 1:44 pm

#116 Coopoiler on 12.31.16 at 11:49 am
#22
Never take “advise” from TNL@TB or cu

My “advise” is never say never!
==============================

Sacrilege!….One exception to that rule is NEVER GIVE UP!

#125 Damifino on 12.31.16 at 1:46 pm

#28 millennial #2163 (don’t shoot)

A few weeks back my mom mentioned that she has to “go to the bank to buy an RRSP”, her words. [….] Any ideas what that might mean?
————————————

If you think of the letter ‘P’ in ‘RRSP’ as meaning ‘product’ rather than ‘plan’, then you will gain some insight into your mom’s statement.

She is convinced, like so many others, that an RRSP is a commodity item. For example: “I’m off to Costco pick up some coffee, canned fish and a dozen RRSP’s”

Your mom is most likely going to the bank to purchase some more ‘product’ to add to her existing ‘plan’. The plan is a container that holds tax deferred investments. The product could be some under performing fund the friendly commission-based salesperson is flogging this this month.

#126 Sparky55 on 12.31.16 at 3:03 pm

For the carbon arguments – I’m not a fan of the carbon tax, but there are many alternatives to burning carbon that are viable and cost effective today. We only have to look at the artic and glaciers that are melting at unprecedented paces as whether we have a problem or not, not to metion the the methane anhydride issue which could be the worst of all:

– renewables – 11solar is pretty cheap these days at $0.40-0.60 USD per watt wholesale. Public purchasable pricing is at $0.60 – 0.80 USD per watt in pallet quantity (typ 20-30 of 150-300W panels).
Where I live, we have an ok insolation of 4.1 for fixed solar – this means I would get 4.1 Watt hours per watt of installed solar per day, on average on a yearly basis.
A moderate sized 10kW array would cost as low $6,000 USD + mounts and wire + install labor (this does not have to be expensive, but often is) + inverter.
This array would produce 41kWh per day avg. At $0.15 CAD per kWh, it would produce $6.15 per day at current power rates. Depending on exchange rate and the other costs above, this has a payback period of 4-8 years, in which the power essentially becomes free at that point.
A lot like having a tax free dividend paying an annual 15-30%, or more if it displaces normal building matetial such as shingles. It also gets more valuable as power rates increase… For the people who live in areas with $0.40 kWh power, the payback period would be 1-2 years…
Add some wind turbines, as when the the sun is not shining the wind is typically blowing, more often then not…

Batteries are not needed with net metering (unless for backup). But even so, batteries are avaliable that can power houses and businesses, and are slowly getting cheaper as economies of scale kick in. Utility scale batteries are slowly becoming reality – moderate sized ones already exist and are in use in the 20-100Mwh capacity (and that was several years ago)
As more and more electric vehicles get on the road, with smart grids, they can be easily programmed to charge when excessive energy is avaliable, and to not charge when there’s less energy available. This could easily add the equivalant of millions of Mwh of battery capacity to electrical grids. It’s easy to implement too – when excess power is avaliable, the power rate gets discounted..

Once the grid has enough storage and a diverse mix of renewables (inc hydro which can be ramped up and down rapidly), then fossil fuel plants can start being shut down. For the people who say renewables don’t actually produce anything – then why has our electrical energy consumption increased substantially over the years, but we are not building hardly any new large power plants in North America?

Incentatives, tax breaks, subsidies, land, ect that are given to crude recovery and petrochemical are not typically given to alternative energy sources (a few $Mill here and there is not significant) – this skews the energy mix substatially, and renewables are still becoming cheaper. Note the $0.40 subsidy per kWh in Ontario is a massive garverment farce.

– heat pumps (inc geothetmal) – these save immensely on energy and carbon, and can be powered from non carbon sources. A properly installed high SEER unit will be easily 3-4 times savings over oil or electric heat, and 2 times or more for nat gas, depending on local rates.

– electric cars save easily 3-4 times the wheel to well energy and carbon emissions. Maybe more once fuel transport, greatly reduced repairs and their spin off industries are factored in. This does not even factor in that electric cars become more carbon neutral over time as renewables are brought online.

– electric trucks – same benefits as electric cars – electric tractor trailers exist today with 250km loaded range. Not enough for long haul, but they will keep getting better.

#127 Polls R Phake on 12.31.16 at 3:16 pm

#77 hope & ruin on 12.30.16 at 11:54 pm
olls R Phake on 12.30.16 at 10:51 pm
Why do the socialist lefties keep using this BS line “The science is solid”

If you knew anything about science you would know it is never solid.
_____________________

I said solid, not impenetrable. And actually a lot of science is solid at least at the level we deal with on a day to day basis.

I don’t know which socialist lefties you are talking about. Either way, I’d take that label over unintelligble, moron any day. That includes climate deniers who struggle with basic physics.

Let me guess, you were the dumbass who failed out of first year because he spent 6 months trying to disprove equations of motion.

____________________________________________

Its funny. The lefty socialist Hillaryites like yourself. You know what they always do? Always? Call people names. They fight, they cry like babies. They absolutely cannot accept that they might possibly be wrong (and have been brainwashed).

Go look at a world weather map today where 50% of the planet is below zero – ten years after Gores hockey stick. Go to the beach and see how far “up” the water has raised. Then come back to us with your insults about how the science is “solid” on Global Warming.

#128 Polls R Phake on 12.31.16 at 3:26 pm

#80 Bottoms_Up on 12.31.16 at 12:16 am
#71 Polls R Phake on 12.30.16 at 10:51 pm
————————————–
Get real. Science is often solid, from deciphering the structure of DNA (and figuring out how it can make people like you stupid), to understanding how vaccines work (immune system stimulation) and development of our entire pharmaceutical industry (are you saying GSK develops drugs on a whim?).

Science can be and is very robust.and solid.

Regarding climate change, the facts are indisputable. Theory, observation, and facts all support each other. This is the very definition of solid science. Climate change and global warming has been proven my friend.
___________________________________________

Yes indeed. Proven science. That is why the planet is 50% below zero. All that Global Warming. Remember that phrase before the “phake science” changed it?

Sold science huh? You mean the Govt Scientists and University scientists that are “told what to say” or they will not get funding next year?

Solid science……yeah about as solid as the water that has NOT melted to raise the ocean levels.

#129 Glen on 12.31.16 at 3:49 pm

Valid points. But this blog isn’t about average people. That’s what the Huffington Post is for. — Garth

Is that an admittance that this blog is for folks with either tonnes of money…or folks who value money over everything else?

In which case…what a strange blog then.

#130 Victor V on 12.31.16 at 6:49 pm

#53 Metaxa on 12.30.16 at 9:51 pm

Pay your TFSA fees from within your TFSA and the entity managing your TFSA gets paid.

Pay your TFSA fees outside your TFSA, with “other” money and your managing entity gets paid AND you can deduct those fees as an expense.

==================

Notwithstanding the tax deduction benefit as above, if the fees are taken out of the TFSA to pay one’s advisor, does that mean that one’s contribution room increases by the same amount debited?

#131 Russ on 12.31.16 at 7:29 pm

#129 Glen

It’s a pathetic blog, not strange.

The comments is where you find strange… and strangers.

Happy New Year to all my strange friends.

R

#132 Ronaldo on 01.01.17 at 2:44 pm

Well, 2016 was a superb year for investments in Maple. The top 3 sectors, Financials, Energy and Materials were the star performers returning a nice average of 19.4% in my portfolios of non etf’s except for 1 (HEP) which I sold after a double. Bonds did not do as well but still 6.5% is nothing to sneeze at for that portion of the fixed income. Overall, average over 15% for the year which makes up for the poor performance of 2015 at just 5%. This year I expect energy and materials to perform well but am a bit skeptical of the financials so plan to lighten up on those. Copper in particular is starting to shine again and will be doing some cherry picking on some individuals stocks on those. I also think that Uranium is now a good thing to be looking at since its been in the dumps for quite some time. Certain bonds I will be shying away from and will concentrate on funds holding higher percentages of Corporate and High Yield and government bonds with short durations. I believe 2017 will be very volatile year for the markets so I plan to be fairly conservative in my picks for the coming year. My favorite metal, silver, I believe will do very well again this year. It will be very difficult to have a replay of 2016. I turn 71 this year and in a few days I will have melted down my entire RSP/Rif portfolio now invested in TFSA’s and non-registered investments. My kids will love me for it but the tax man won’t. Happy New Year everyone and good investing to all the blog dogs.

#133 Ronaldo on 01.01.17 at 3:13 pm

#125 Damifino on 12.31.16 at 1:46 pm

#28 millennial #2163 (don’t shoot)

A few weeks back my mom mentioned that she has to “go to the bank to buy an RRSP”, her words. [….] Any ideas what that might mean
—————————————————————-
I would take it as she is going to put money earning very little interest in a RRSP that could end up in a tax trap for her in her later years. You need to have her read this:

http://www.greaterfool.ca/2012/11/08/the-tax-trap/

http://www.shillington.ca/

http://www.shillington.ca/seniors/what_you_need_to_know.htm

http://www.straight.com/article/not-all-benefit-from-rrsps

http://www.cbc.ca/news/business/taxes/registered-retirement-savings-plans-aren-t-for-everyone-1.893804

http://business.financialpost.com/personal-finance/tfsa/how-the-guaranteed-income-supplement-is-on-a-collision-course-with-tfsas?__lsa=f427-5fac

https://www.thestar.com/business/personal_finance/2014/02/04/how_to_plan_for_retirement_on_a_low_income_roseman.html

https://www.thestar.com/business/personal_finance/retirement/2011/01/25/challenging_5_accepted_truths_about_rrsps.html

http://www.advisor.ca/images/other/ae/ae_0104_rrspalternative.pdf

http://www.advisor.ca/retirement/retirement-news/is-an-rrsp-always-worthwhile-26324

#134 freedombird on 01.01.17 at 6:07 pm

#123 GB

Agreed but this is a financial/ investment blog. I think the point is to wake readers up and maybe save our own butts and maybe laugh. I know many around us confuse needs and wants and are living on a house of cards…one bad card or pay day away from a crisis with no oars. I’ve passed this blog onto a few younger friends who got an eye opener. Good.