Multiply

Ten years ago Stephen Harper threw my derriere out of caucus for blogging, failing to genuflect when he brushed by, and having an attitude. But at least his feisty little finance minister listened to me (and others) and created a new tax shelter. The TFSA (I called it an investment account, not a savings account) was the centrepiece of a report I gave the guy on how to fix things a little for the middle class.

Other suggestions included raising the GST and lowering income tax; bringing in income-splitting for married couples trying to get by on one income; and seriously revisiting the idea of a flat tax rate for all, with a big deduction for lower-income people, moving towards the idea of a guaranteed income. Well, F adopted the TFSA part, but went on to royally fudge things up by bringing in 40-year mortgages and 0% down payments. After I squawked about it, the writing was on the wall. Garth was pooched.

Ten years later I run a fabulously-lucrative free blog where I have fun every day fighting bigots. What’s not to love? And meanwhile the TFSA has become the single most popular investment vehicle in the land, even though most people squander it. The latest stats showed 15.1 million accounts had been opened in Canada, but just 1.8 million were maxed. Thus, 88% of people have not fully used what is arguable the biggest money machine they’ll ever be given. In fact, four in 10 with a TFSA open somewhere put in zero. Ugh.

In a few days Canadians can stick new money into these plans, and this post is a reminder to do so. If you don’t, spending your cash instead on a Wolf stove, Adele tickets or tokens the Litecoin guy dumped, you deserve the future you get. Why?

The long-term growth, free of tax, is epic. Invest $5,500 this year, then add $100 a week for the next three decades in growth assets making 7%, and you end up with $576,338 of which $414,838 is growth. Besides tax-free compounding of investment returns, the real benefit of this thing is that it will throw off income in retirement (or anytime else) which is not counted as income. So in the example just given, forty grand a year could be earned with zero tax payable on it.

Now let’s look at two 40-year-olds who have wisely maxed their TFSAs with $52,000 in each. If they keep their accounts topped up and full of ETFs giving the same return, at 65 they’ll claim $1.26 million, of which almost nine hundred grand is taxless growth. In retirement that amount can provide an annual income of about $90,000, and these guys can still collect their CPP and OAS without having any of it clawed back (assuming no other income source). If they had $1.26 million in RRSPs, the after-tax income would be about $52,000 and they’d have a marginal tax rate of 29.65%. No contest.

For anyone with a good company pension plan, and especially for the Aristocracy Among Us with gold-plated, defined-benefit schemes (teachers, cops, retired finance ministers) investing in this vehicle is far better than feeding an RRSP. At age 71 all registered retirement plans must be partially unwound, with the income being added on top of pension payments, often boosting you into a higher tax bracket. But no matter how much is skimmed off a fat TFSA, nothing is taxed or even recorded as income.

Of course, TFSAs can be used for income-splitting, too. You can gift your spouse or your adult kids money to invest in one. None of the gains will be attributed back to you. You can withdraw money and, unlike an RRSP, put it back the following calendar year. Unused room can be carried forward indefinitely. And a tax-free account can hold almost any investment asset, so keeping a moribund high-interest savings account or a brain-dead GIC in there is a big fail.

For those who are too afraid to invest because they think stocks markets are high, then ensure you are taking a balanced and diversified approach to protect yourself. That kind of portfolio (40% safe stuff, 60% growth assets) just chalked up a 11% gain in 2017. Not shabby. And if you fear financial markets but are willing to enter a bidding war for a $1.58 million semi held together with pot light wires and bug spit, good luck.

Anyway, the TFSA should be viewed as an awesome long-term benefit to society, kind of like this pathetic blog. Don’t worry if there’s an occasional reversal, correction, implosion or eruption, because over time it’s the single best place you can put $5,500 in 2018.

Yes, little F loathed me, but that’s okay. He gifted us this, and I forgave him.

212 comments ↓

#1 mitzerboy aka queencitykidd on 12.20.17 at 6:02 pm

like old Eisenstein said all my ideas are ok
but the real magic is compound interest

#2 Mongohouse on 12.20.17 at 6:03 pm

List Price Sold Price
$1,468,000 N/A September 2017 Price Change
$1,570,000 N/A July 2017 N/A Terminated
$1,188,000 $1,680,000 March 2017 Sold

148 Caproni Dr, Vaughan

https://mongohouse.com/newlistings/59cf2e2c5c72306c5c345f88

Wow… So many examples just like this. Imagine you over bid 1/2 million dollars only to lose it less then a year later.

#3 Guy in Calgary on 12.20.17 at 6:03 pm

Tax free… depending on how often you trade in the account of course.

#4 mitzerboy aka queencitykidd on 12.20.17 at 6:04 pm

Einstein

#5 The Boulder on 12.20.17 at 6:06 pm

Looking at last 8 years return, I always wondered why any one would invest in TFSA, when housing offers big returns on 80% leverage. Now things started making sense. Balance is the key.

#6 Upper Class Sass on 12.20.17 at 6:07 pm

Garth….

Look at the panic in calgary so far this month and the regs arent even in.

http://www.creb.com/Housing_Statistics/Daily_Housing_Summary/?tab=5

#7 Mordko on 12.20.17 at 6:08 pm

“None of the gains will be attributed back to you.”

Careful here. If your wife withdraws and then invests in a non-registered account, the gains may be attributed back to you. Only spending is permitted.

$1.58M semi has certain attractions. All capital gains are tax free. Leveraging is easy and cheap. If you move for a job then all buying and selling expenses can be written off. And as long as you have a business, a chunk of housekeeping costs can be written off as well.

We are incentivized to buy houses by the government. Big time.

Wrong on the TFSA. – Garth

#8 FOUR FINGERS WATSON on 12.20.17 at 6:09 pm

Back in the day, RRSP was the only game in town and I went all in like so many others. I sure wish that TFSA had been in existence 50 years ago. What a gift that would have been ! Well done on that one Garth..

#9 Jungle on 12.20.17 at 6:11 pm

I’ve been getting ready to max my tax free slavings account, and look forward to it.

I agree and starting to think, this is the single most important account we (middle class) can take advantage of.

#10 S'Mors on 12.20.17 at 6:12 pm

Just waiting for the inevitable cap on TFSA contributions. With governments everywhere looking for revenue it would be naive to think this ‘golden egg’ will be left alone.

Hopefully by then, the astute among us will be able to hire firms like Morneau Shepell to ‘hide’ our money from the governments greedy paws.

#11 AGuyInVancouver on 12.20.17 at 6:14 pm

Meh, TFSAs don’t sound like as much fun as collecting and breeding Crypto Kitties.

#12 Rexx Rock on 12.20.17 at 6:15 pm

My conservative balanced tfsa Questrade portfolio gave me huge gains.$123 for last 6 months for $25,000.Should ya got a brain dead GIC that would have paid me more!Balanced portfolios didn’t work for me.

Then you don’t have one. – Garth

#13 Theo on 12.20.17 at 6:18 pm

Too bad our brilliant PM gutted it last election riding on a wave of middle-class self loathing.

#14 young & foolish on 12.20.17 at 6:19 pm

What about yesterday’s rumblings in the paper about the government losing major tax dollars and it only being a matter of time before the TFSA is revisited?

Something about it becoming a victim of it’s own success?

Never happen. – Garth

#15 Smartalox on 12.20.17 at 6:22 pm

Yes, the TFSA is a great thing. The USA has an equivalent called the Roth IRA (Investment Retirement Account). If both countries have the same type of account, and both countries share a tax treaty, you’d think that it might be possible for those countries to find common ground on the TFSA / RIRA issue too. After 10 years.

Sadly, no.

#16 Smartalox on 12.20.17 at 6:23 pm

Also, will the Dow hit 25,000 before December 25th?

#17 AK on 12.20.17 at 6:23 pm

“Anyway, the TFSA should be viewed as an awesome long-term benefit to society.”
——————————————————————–
Let’s just hope that the Libtards don’t eliminate it.

Time to vote the Conservatives in power, so they can re-instate the $10,000.00 contribution.

#18 BlogDog123 on 12.20.17 at 6:26 pm

But TFSAs are for my 0.8% Tangerine savings. I dare not invest in the stock market or lose all my money. And filling out tedious application forms makes my head hurt. Where’s the remote, change the channel, this Garth guy is making my head spin…
{sarcasm}

#19 Royal City Dweller on 12.20.17 at 6:26 pm

RRSP is better…. if you are 60 yo already
and have taxable income of $50K+… and still an unused RRSP contribution room in the range of 60K…
No tax refund for TFSA….
No brainer.

Hardly. You are making money taxable. Think it through. — Garth

#20 Jamie Dimon on 12.20.17 at 6:27 pm

Hella ya El Gartho, great blog. Here’s my ponder for our blog dog nation. I have tons and tons of room in both RRSP and tfsa but am now making good money and have zero debt so I am able to tuck away ample amounts in each. My thinking is crank it up on the RRSP While doing the max yearly tfsa contribution and then taking the tax refund on the RRSP contributions to help get the TFSA to its full max. Judging from this post it sounds like Garth is saying blast that TFSA to maximum ASAP. Room is room when it comes to registered accounts no? So if I have 40 G’s of room in a tfsa I can put 40 gs in that bad boy tomorrow?…..as always a big thank you in advance to the blog dogs and el Gartho

#21 Big Bucks on 12.20.17 at 6:31 pm

Like all good things the TFSA will be taxable in a few years or clawed back.This government is broke and will need the money.The poor/people who don’t bother contributing are smarter than you think—they know it is best to just live off the system and eventually the Guaranteed annual income.Moving money all over the place to avoid taxes will be pointless,may as well just light a fat one and enjoy.

#22 Frank on 12.20.17 at 6:32 pm

The TFSA is worse than taxable for over 3% of the population. They forgot to call it a retirement account, which would include it in the tax treaty with the US.

#23 Parksville Prankster on 12.20.17 at 6:33 pm

No doubt the TFSA is a dandy little vehicle, however I question the oft quoted 7% return. When an ‘average return’ of 7% is indicated, doesn’t that also include years when the average return deviates from the mean? If that’s the case, the years when there’s a minimal return, say half or 3.5% would not be compounded at the average of 7%. There will be periods in which you get a 10% rate of return. These are the great times. But there will also be times in which you are getting a -5% rate of return. The 5-year average for the S&P 500 from 1995-1999 was 28.56%. But this is where the market can be a fickle beast. That “tripled” initial investment from 1995, was reduced by -9%, -11%, and -22% in the following three years (2000, 2001, 2002). $10,000 turned into $35,111.31, and then was reduced to $21,904.12. Sure, fixed income vehicles can ‘smooth the ride’, but with historical lows on interest rates, most people will probably struggle to achieve 2-3% above inflation in the long term.

If they think like you, maybe. – Garth

#24 Marc on 12.20.17 at 6:33 pm

Any risk of the TFSA contributions being reduced or eliminated?

None. – Garth

#25 crowdedelevatorfartz on 12.20.17 at 6:34 pm

Thanks again Garth!
For all you did…..and all you do!

#26 Cornelius on 12.20.17 at 6:35 pm

“seriously revisiting the idea of a flat tax rate for all, with a big deduction for lower-income people”

YESSSSS!!!!!

Thank you Garth for supporting this idea when you were in elected office. Friggin I wish there were more back-boned red-blooded guys like you serving our Country.

#27 Spoiled Canadian Millenial on 12.20.17 at 6:36 pm

I’m a soiled Canadian millennial who will offer you $400,000 for that white dog that you have in the Instagram pic at the sidebar.

White dogs of that breed only go higher and higher in value! My wife told me so! She’s in Montego Bay Jamaica taking a tan and “learning new positions and experiences in life”. I’m proud of her.

My wife told me to buy that dog, or else I wouldn’t even be worthy to be near her farts.

If my BMO financial advisor rejects my loan application because I struggle to pay mortgage on my Toronto area residence, I will ask my Teacher Mom or Chief of Police & Finance Minister of the City of Feminist dad to lend me some mulah so I can buy your dog.

Please don’t tell my dad that my mother has a relationship with several high school students. My mom told me that empowered women don’t trust sleazy men because of #Me Too, and the only way that Canadian women can find love is from teenagers and pre-teens. The Ontario Liberals will start to legalize another orientation in the near future to empower women.

#28 Greg on 12.20.17 at 6:37 pm

Great refresher Garth. Thank you!

#29 Blobby on 12.20.17 at 6:40 pm

If I have $40k, Ive only once put $5k into tfsa, which I took out when I got broke. am I only allowed to put in $5k now, then another $5k next year? Or can I put in for all the years I’ve missed? Etc etc?

I could ask tax man but it’s a bit late in year now and I doubt they’re answering phone

You can use all your accumulated room at once. – Garth

#30 Howard on 12.20.17 at 6:41 pm

A good value-add post today. But how long before T2 (as of today declared officially unethical) starts tinkering with the TFSA and declares it a tool of tax cheats?

Little anecdote about your pal Flaherty. I was waiting for a cab at Toronto Island airport in 2011, having returned from a work trip to Montreal. There was a bit of a wait, a good 10 people ahead of me. I started glancing around for no particular reason, and did a double-take when I saw who was in line behind me. There stood the Finance Minister of Canada and several aides, patiently waiting along with everyone else. I introduced myself and shook his hand. He was extremely gracious, very kind. I thought to myself, imagine that. One of the most powerful men in the country, just blending in. No security (though they may have been off in the distance, who knows). How Canadian. RIP JF.

#31 Julie K. on 12.20.17 at 6:42 pm

Yeah, I miss F too.

Odd for a politician, but his body language and words were in sync. He oozed trust, security and credibility. I believed him when he spoke. But that is so 2006-2014…

Anyway, its almost 2018 and, throwing caution to the wind, maybe time to invest. Getting a little chilly standing on the sideline.

Win or lose, you warm up when you’re in the game.

#32 Drew on 12.20.17 at 6:44 pm

Merry Christmas and Happy holidays to you, Garth and everyone here.
Thanks for getting the TFSA started for everyone in Canada! I tell everyone I know to max out their tfsa account, as I do. I tell them its like legal money laundering… Taxed money goes in and tax free money comes out! I only wish I could invest more in that than RRSP’S. Hope 2017 was good for you and that 2018 is even better!
Drew Ng

#33 Felix on 12.20.17 at 6:45 pm

Disgusting photo.

Too many dogs in the GTA, about 200,000.

And too many realtors, about 48,000.

The twin scourges of our time.

Imagine a better world, humans, and then make it so.

#34 Danforth on 12.20.17 at 6:47 pm

re: photo, and article:

Is that mamma dog’s TFSA contribution?

picture has 11 puppies.
TFSA limit is 5500

$500 per puppy?

#35 Bhad Bhabie - bit late on 12.20.17 at 6:48 pm

#246 BillyBob on 12.20.17 at 2:57 pm
But the “racist” brush paints wide and discredits the one who wields it, not the the ones it targets, alas.

Just admit it. Faster. — Garth
********

Van city isthmus
no whyte crissmas

sum got alot
sum got alas

#36 Loonie Doctor on 12.20.17 at 6:50 pm

When politicians and their affiliated media say that TFSAs only benefit rich people I have mixed emotions. On the one hand, it makes me chuckle. If I were in a low income bracket, an RRSP would be almost useless because the refund would be small and the chances of me being in a similar tax bracket in retirement high. A TFSA on the other hand would give me income while I collect OAS and CCP on top of it. If I had 5k/yr to invest, it is no contest. TFSA is the best. On the other hand it makes me cry because that kind of balogne is usually code for they want to cut it and disguise that as a blow to the rich to sell it. Sadly, people fall for it like they did in the last election. I hope to not hear it come up again.

#37 Bottoms_Up on 12.20.17 at 6:55 pm

You were right about TFSAs. And also right that lower income taxes is what Canadians needed.

Instead, they decided to sabotage our country and future by allowing the housing market to bloat. Short-term gain, long term pain.

#38 Bottoms_Up on 12.20.17 at 6:59 pm

#20 Jamie Dimon on 12.20.17 at 6:27 pm
—————–
Avoid RRSP if it will bump you into a higher tax bracket in retirement.

#39 TurnerNation on 12.20.17 at 7:03 pm

As you munch on your rigged overpriced Kanadian bread rations (owned by Billionaire family) konsider that every single Toronto sports team AND venue is owned by these guys.

Every $200 ticket and $40 parking and $20 beer goes to them: a monopoly:

http://mlse.com/teams/
http://mlse.com/portfolio/

Wait..what about our football team. YUP:

https://www.thestar.com/sports/argos/2017/12/13/mlse-buys-toronto-argonauts.html

– for good measure a Rogers (telecom billionaire) sits on their Board of Directors. Diversity you see.

Kanada is a giant tax farm. Totally rigged by Party members and sponsors.

#40 Royal City Dweller on 12.20.17 at 7:04 pm

If this is no bubble then I don’t know what is.
http://www.cbc.ca/news/business/stocks-dollar-markets-1.4459109

Stock values advancing based on corporate earnings is no bubble. Now let’s talk about Bitcoin. – Garth

#41 Bottoms_Up on 12.20.17 at 7:05 pm

#6 Upper Class Sass on 12.20.17 at 6:07 pm
—————-
3 houses sold in my hood past couple weeks. houses that sat for months.

#42 Ozy - Inflation vs TFSA on 12.20.17 at 7:05 pm

Inflation vs TFSA? no doubt, GOVT launched this for you to store hard earned $$$ so they can print, print, borrow, borrow, spend spend on credit on credit

guess what your purchasing power will be 40 years from now, will your 10 million in TFSA buy you a bread or maybe two…??

Wake up amigos, vote a Canadian trump and ban mega governments by amending the constitution – minimal govt, less than 1000 employees country wide is all we need, the rest is privatized

#43 Loonie Doctor on 12.20.17 at 7:09 pm

#20 Jamie

I am not an advisor nor do I know the specifics of your situation, but a few things I would consider if it were me.

1)TFSA is great no matter your income and the more you grow stuff in it, the room there is in it. I would grow it as my priority. Thanks Garth – this was a major gift to everyone even if mis-branding it has led to underuse.

2) I’d avoid making huge RRSP contributions all at once. When you take the deductions, it moves you down the tax brackets as you go shrinking the refund. I’d spread them out. The best power of an RRSP is when you contribute and get a refund in a high bracket and take it out when in a low bracket either when making little yourself or if you shifted it to a low earning spouse via a spousal RRSP.

3) If you have the cashflow and are in a high enough tax bracket, you can contribute to your RRSP enough to get a decent refund to top up your TFSA, but stay in a high marginal bracket for your refund.

4) Investment profits are taxed as income when they come out of an RRSP instead of more favourable capital gains or dividend rates. If I were debating how to use a TFSA and RRSP with space in both, I would target my income producing highly taxed interet part of my balanced portfolio to my RRSP and my growth portion to my TFSA as much as possible.

Hope that makes sense and is helpful.

#44 will on 12.20.17 at 7:14 pm

on this blog let’s just call it the TFIA (tax free investment account) and forget about it.

also thanks for the reminder about doing it incrementally – $100/week. I’m thinking of setting that up for both my TFIA and my RRSP this year instead of trying to load it up all at once. that just makes me miserable.

#45 mark on 12.20.17 at 7:14 pm

We can talk all day about how good the TFSA is, and yes its a good one.
But anyone saying there going to have 1/2 million in there accounts 3-4 decades from now is simply false hope.
Government will and are going to adjust the rules for tfsa how can you sit there and say we will have 30 or more years of tax free growth.
Not going to happen and everyone know it.
Enjoy in present form it ain’t going to be like that for ever government will get there hands on some of the gains somehow.

#46 Loving TFSA on 12.20.17 at 7:16 pm

I try to max out TFSA as much as I can and am making 6-8% returns last few years.
But, I am worried that future GOVs may limit the lifetime contribution. Or GOV may start including TFSA balance in their CPP/OAS calculations. Again punishing the savers.

#47 Soviet Capitalist on 12.20.17 at 7:17 pm

Garth, so someone else took credit for your idea regarding TFSA?! I was born yesterday and find it hard to believe the politicians can do such things!
But seriously, thank you with all my hearth, our society needs more people like you!

#48 nil nisi bene on 12.20.17 at 7:17 pm

I hope the apparent crack in Garth’s veneer isn’t just a ruse to get donations to fund yet another run at the Senate (remember last year:-(. IMHO, all future Senate appointments should be selected from current nominees* for the Hockey Hall of Fame. (*who are still able to skate and have half their marbles).

Whenever the Senate is deadlocked, put them all on the Riviere des Outaouais for a quick game of shinny …… in April.

#49 Nonplused on 12.20.17 at 7:19 pm

“Yes, little F loathed me, but that’s okay. He gifted us this, and I forgave him.”

Well Garth, I figure if you don’t have any enemies, you probably don’t have any friends either. In fact, you probably don’t make much difference. They won’t be able to say that about you as the TFSA has impacted everyone. This blog has too but not in as positive a way. It’s fun though.

How in the world did that many puppies come out of one dog?

#50 Paul on 12.20.17 at 7:19 pm

#33 Felix on 12.20.17 at 6:45 pm
Disgusting photo.

Too many dogs in the GTA, about 200,000.

And too many realtors, about 48,000.

The twin scourges of our time.

Imagine a better world, humans, and then make it so.
————————————————————————————————
And one too many Flex’s

#51 Mordko on 12.20.17 at 7:19 pm

Garth, you misunderstand TFSA attribution rules. Here: http://www.advisor.ca/tax/tax-news/navigate-tfsa-attribution-rules-238420

Nope. – Garth

#52 TS on 12.20.17 at 7:21 pm

Garth is is denial

If you think the Feds are going to let you grow your TFSA to 1.26 million dollars, earn you $90,000 tax free AND give you full OAS on top of that without clawback, you’re nuts

In 10 years, they’ll be a line on your tax return indicating how much money you removed from your TFSA that tax year. They’ll use your Taxable Income + TFSA withdrawals to determine your eligibility for GIS and OAS.

This is such low hanging fruit that it’s not even worth debating…..

I got a letter reply from Joe Oliver when he was Finance Minister which basically said that the CRA was monitoring the situation but didn’t need to act right now because the amount that could be saved in a TFSA was relatively low.

While I disagree, the potential threat of future tax is absolutely no reason not to use this shelter to its maximum now. Common sense. – Garth

#53 TFSA contributions on 12.20.17 at 7:24 pm

Can you explain this one about the weekly addition you mention? I’m putting in the full $11,000 in for my wife and I come Jan. 1st. We are at max $57,500 then each.

Is there room for more every week? Please say it is so!!

**************

“The long-term growth, free of tax, is epic. Invest $5,500 this year, then add $100 a week for the next three decades in growth assets making 7%, and you end up with $576,338 of which $414,838 is growth.”

**************

You emphasize the tax free aspect. Why do I have this gnawing feeling that one day, some government will repeal it all and collect taxes on that awesome growth in our TFSA portfolio?

#54 Brydle604 on 12.20.17 at 7:27 pm

Thanks for the TFSA Garth. My wife and I TFSA are maxed.

#55 TFSA trading on 12.20.17 at 7:29 pm

Guy in Calgary says:

“Tax free… depending on how often you trade in the account of course.”

I trade all the time in the (TFSA) account. Why would that be a problem?

#56 Mordko on 12.20.17 at 7:30 pm

From the horse’s mouth: https://taxinterpretations.com/node/393939

Does not apply. – Garth

#57 Grateful on 12.20.17 at 7:30 pm

Garth,

Did not know you were the brainchild behind the TFSA. Glad to see our Minister of National Revenue was looking out for the people, rather than the current one who is obsessed with taxing single mothers and MacDonalds employees.

Just want to say thanks for this great investment tool that I take advantage of (but don’t abuse as I know many snakes do).

#58 espressobob on 12.20.17 at 7:32 pm

TFSA has been a real darling. Loaded up on foreign content like the S&P (USD), Russell 2000, international and EMs. A few side-bets to boot. No complaints.

You done good Garth, Thanks.

#59 rental property math on 12.20.17 at 7:32 pm

My buddy who doesn’t have a clue about investing has 100K in his TFSA thanks to a couple weed stocks. I’m at 22% YTD in the TFSA, not too bad.. thanks global small cap mutual fund. I don’t mind your 1.81% MER if you’re going to feed me 22 points.

#60 Bruce County Girl in Ft. Mac on 12.20.17 at 7:35 pm

Strange reading the beginning of your blog posting today, Garth. My son came home from school yesterday and said, “Mom, you’re gonna love this, we had a test in Social Studies class today and there was a question on it about Garth Turner!” The question asked something like why you were no longer a part of the Conservative party back then at that time. One of the answers (it was mult. choice) was non-compliance with the party. Shocked, I asked my son if there was any questions about the TFSA and how that “turfed-out” guy was actually the person responsible for making it happen, benefiting young people like yourself? He said there wasn’t :( Anyway, I don’t comment here very much, but just wanted to share that :)

#61 Linda on 12.20.17 at 7:36 pm

Garth, have to wonder the same as Young & Foolish. I too read that article musing about whether the TFSA would be a victim of its own success. After all, governments seem to specialize in breaking promises or changing the deal when it suits – income trusts, anyone? Just saying.

#62 Ozy - Inflation vs TFSA on 12.20.17 at 7:39 pm

Inflation vs TFSA? no doubt, GOVT launched this for you to store hard earned $$$ so they can print, print, borrow, borrow, spend spend on credit on credit

guess what your purchasing power will be 40 years from now, will your 10 million in TFSA buy you a bread or maybe two…??

Wake up amigos, vote a Canadian trump and ban mega governments by amending the constitution – minimal govt, less than 1000 employees country wide is all we need, the rest is privatized

that’s how you minimize corruption btw

#63 Rooster on 12.20.17 at 7:45 pm

#22 Frank on 12.20.17 at 6:32 pm

The TFSA is worse than taxable for over 3% of the population. They forgot to call it a retirement account, which would include it in the tax treaty with the US.

|*|*|*|*|

Are you one of the 3% of Yankee daffy-dodging carpetbaggers residing on Canadian soil? Using up our bargain-basement health care, and taking advantage of our low dollar and high times. Mister, you haven’t been here long enough to complain about your taxable income. Go home where you can enjoy your lowered taxes ;-)

#64 Drill Baby Drill on 12.20.17 at 7:45 pm

Selfie Boy T2 is eyeing the TFSA as you speak. They will find a way to get rid of it (they know they will need the tax dollars soon). With the failure of NAFTA, TPP, no secondary oil or LNG exporting options and the new corporate tax regime in the USA sucking any and all industrial investment away from Canada not to mention Carbon taxes this TFSA tax relief plan has to go.

TFSAs are funded with after-tax dollars. What tax relief? – Garth

#65 I invest on 12.20.17 at 7:46 pm

Why did Truedoh lower the TFSA limit? I thought he was supposed to be a genius?

#66 Mike from mtl on 12.20.17 at 7:47 pm

#20 Jamie Dimon on 12.20.17 at 6:27 pm
/////////////////

If it was me, all in TFSA first and invest all at once.

Yes if you’re in a higher bracket you can get that rrsp refund now. But you’ll the later get dinged again on the way out. TFSA as it is now the gains now are not taxed on withdrawal. Yes sticking into RRSP now will get a nice return on contribution, but again melting that down in the future is not free.

Unless you’re making well over 150k and continue in the future always max TFSA then of course the RRSP remainder.

Every year I max TFSA in January plus contribute RRSP and any bonuses or extras then push into RRSP throughout the year. Don’t rebalance unless there’s at least 2k to work with. Spending 100$ on transactions fees also is a consideration.

#67 SunShowers on 12.20.17 at 7:49 pm

“The latest stats showed 15.1 million accounts had been opened in Canada, but just 1.8 million were maxed. Thus, 88% of people have not fully used what is arguable the biggest money machine they’ll ever be given.”

“The TFSA was the centrepiece of a report I gave the guy on how to fix things a little for the middle class.”

———–

Well Garth, I found your problem. The TFSA isn’t helping the middle class because the middle class (apparently the overwhelming majority of them) doesn’t have the money to stuff into them. Canadians haven’t gotten a raise in 40 years, and incomes have stagnated. The TFSA limit could be raised to $100,000 per year with guaranteed 10% returns, and the benefit to the middle class would be negligible.

Also, 88% of Canadians don’t live in the GTA & YVR, so you can’t lay the blame on the gasbag housing markets there.

A 70% home ownership rate says otherwise. — Garth

#68 Fish on 12.20.17 at 7:50 pm

Fine country , T2 and wild Bill
Hope for the best it can all be

#69 Bob Dog on 12.20.17 at 7:51 pm

If the Vancouver police actually ventured downtown and enforce traffic laws, they could pay off the nation debt in a few years.

Or we could just re-enstate the bank of canada which we all own but do not use.

#70 Parksville Prankster on 12.20.17 at 7:54 pm

“… but with historical lows on interest rates, most people will probably struggle to achieve 2-3% above inflation in the long term.

If they think like you, maybe. – Garth”

Thank you Garth, I will take that as the compliment you intended. Given your quoted ‘average’ return of 7% (less the 1% fee charged by many fee based Financial Advisers), and based on a historical average of 2% inflation, (7%-1%-2% = 4%), that would put us both in that 3-4% yield range. Cool!

Rates of return normally increase with inflation as that paces economic growth. In any case a 60/40 is currently doing a double-digit. – Garth

#71 mauri on 12.20.17 at 8:05 pm

“Politicians and diapers must be changed often, and for the same reason.” ― Mark Twain

#72 akashic record on 12.20.17 at 8:06 pm

Crypto to TFSA and RRSP. When?

Should be eligible at the moment when CRA declared cap gains tax on it.

#73 For those about to flop... on 12.20.17 at 8:11 pm

For our American cousins…

M43BC

“American Consumption Greatly Varies by State. See Where the Biggest Spenders Live.

Consumer spending is the engine that powers the American economy, accounting for about 70 percent of all activity. An uptick as small as 0.3% can cause the Federal Reserve to reevaluate its plan on raising interest rates. Since looking at these numbers in aggregate can tell you a lot about the economy’s direction, we thought we’d break down personal consumption at the state level. This reveals an interesting snapshot about the economy.

The Bureau of Economic Analysis— part of the U.S. Department of Commerce—published new numbers in October 2017 tabulating how personal consumption has changed year-over-year. This includes things as wide ranging as housing and utilities, health care expenses, and eating at restaurants. We color-coded each state based on how expensive it is there—green states are comparatively cheaper, and red states are more expensive. This approach gives you a good idea not only how much things cost, but also a thing or two about the economy at the state level.

There are a few obvious trends when you map the data for each state. First off, there’s a cluster of pink and red states grouped in the Northeast. The most expensive place on our map is Washington, DC ($56,843), followed by Massachusetts ($51,981). As a matter of fact, six of the top ten most expensive places are in the Northeast. It’s cliché that housing is expensive in New York, but there are a lot of other expensive states in the region too.

There’s also a collection green states across the Deep South to the Southwest, stretching all the way from North Carolina ($33,779) to Nevada ($36,177) and even up to Oregon ($39,742). The cheapest place is Mississippi, where it costs only $30,200 to pay for life’s most common expenses. Florida is the only state in the Deep South where it costs more than $37k. Keep in mind, Florida’s warm winter climate makes it a prime candidate for migration, which increases personal consumption..

There are a few other fascinating stories that you can infer based on our map. Take a look at Alaska ($49,547), the third most expensive state. There’s no doubt Alaska’s location far away from the contiguous United States plays a large part in driving up housing and health care costs, but who knew it costs more to live in the Last Frontier than New Jersey? Another standout is North Dakota, the seventh most expensive state in the country. It’s no coincidence that both Alaska and North Dakota have enormous oil wealth, which only puts upward pressure on prices. In fact, oil extraction in Alaska is only going to grow in the New Year.

Here’s another interesting trend. This map is a close approximation of the results for the 2016 election. East of the Mississippi River, every expensive state voted for Hillary Clinton, and every inexpensive state went for Donald Trump. The situation is a little convoluted out West, but it’s remarkable how the political divide mirrors an economic reality.

Top 10 Places Where Americans Spend the Most
1. Washington, DC: $56,843

2. Massachusetts: $51,981

3. Alaska: $49,547

4. New Jersey: $48,972

5. New Hampshire: $48,810

6. Connecticut: $48,497

7. North Dakota: $48,225

8. Vermont: $47,648

9. New York: $46,906

10. Hawaii: $45,123

The big takeaway from all this is that no matter where you live, you need a decent amount of money to make ends meet. Exactly how much depends on where you live, but you need more than $40,000 in 28 states, and more than $50,000 for two (if you count Washington, DC).”

https://howmuch.net/articles/how-much-money-americans-spend

#74 FOUR FINGERS WATSON on 12.20.17 at 8:16 pm

#24 Marc on 12.20.17 at 6:33 pm
Any risk of the TFSA contributions being reduced or eliminated?

None. – Garth
……………………………….

It already has been reduced.

Federal Finance Minister Bill Morneau confirmed Monday that the contribution limit on the tax-free savings account will drop back to $5,500 from $10,000 effective Jan. 1, 2016. The rollback to $5,500 in contribution room was not unexpected in the investment community, as it was one of the key campaign promises made by Prime Minister Justin Trudeau.

#75 Long-Time Lurker on 12.20.17 at 8:17 pm

Nice article, Garth. Thanks for the TFSA. You had good ideas. Too bad no one listened.

Poor Honourable Flaherty never got to enjoy retirement. What a difference in Finance Ministers now.

#76 Old gringo on 12.20.17 at 8:18 pm

#33 Felix on 12.20.17 at 6:45 pm
Disgusting photo.

Too many dogs in the GTA, about 200,000.

And too many realtors, about 48,000.

The twin scourges of our time.

Imagine a better world, humans, and then make it so.

I’ve never met a dog I didn’t like, however you Felix, don’t make the cut.
Less people and more loyal “four paw friends ” and this pathetic world could maybe survive.

#77 akashic record on 12.20.17 at 8:18 pm

Prime “Selfie” Minister of Canada had real hard time today when facing the press about his ethic violation – how to avoid bursting into laughing out loud while repenting the past and reassuring the future.

#78 Timberr on 12.20.17 at 8:23 pm

Thanks Garth for seeding the TFSA for us!

Looking to move partial funds from TFSA1 to TFSA2 (both different institutions) without the fee and time laden transfers.

Assume that I can withdraw from TFSA1 before Dec 31 2017 and then move over to TFSA2 come 2018?

Any flags/issues withdrawing from one TFSA and then immediately moving to another in next calendar year?

#79 SunShowers on 12.20.17 at 8:23 pm

“A 70% home ownership rate says otherwise. — Garth”

——————

It was 60% forty years ago, back when Canadian wages were keeping pace with increases in productivity.

You’re trying to tell me that 88% of Canadians are too broke to invest because an additional 10% of them are homeowners now? That math doesn’t add up…sorry.

That made no sense. – Garth

#80 Andrew Woburn on 12.20.17 at 8:26 pm

Walmart is about to solve the problem of excess housing demand. I’d go long on tent manufacturers.

“Walmart is planning a store without cashiers”

https://www.axios.com/walmart-planning-a-cashierless-store-2518925675.html

#81 For those about to flop... on 12.20.17 at 8:29 pm

Recent Sale Report.

This one sold 6 days ago.

4107 w 12th ave,Vancouver.

Asking 2.988

Just sold for 2.800

Tax assessment 3.275

Best part of half a million below recommend retail price…

M43BC

https://www.zolo.ca/vancouver-real-estate/4107-w-12th-avenue

#82 TFSA vs Small Bus Corp on 12.20.17 at 8:33 pm

Garth, I’m curious on your thoughts for this younger small business corporation owner:

Option 1

Withdraw $50,000 after-tax from company to make TFSA contribution. In BC, assuming a 2018 top rate taxpayer, this requires a $88,355 taxable dividend, maybe more after they adjust the dividend tax credit in 2018 to reflect the pending drop in 2018 corporate small business tax rates.

Option 2

Keep TFSA at nil, instead invest the $88,355 within the corporation, deferring personal tax problem down the line by 25+ years. Hold a tax-efficient growth portfolio with minimal taxable income until liquidated (eg shares of BRK.A).

Assuming an 8% compound return:

After 25 years the TFSA from the $50,000 contribution is $1,350,000.

After 25 years, the corporation has $2,385,585 if there is no leakage to tax along the way. Yes, there is a $2,355,585 potential capital gain, bringing the dividend to $2,161,804 of which $1,192,793 would be capital and $969,012 would be taxable. The government would get $420,648 of personal taxes on the taxable dividend, leaving the shareholder with $1,741,156.

Mr. Morneau’s unfair new rules might add some personal tax to the equation, but starting with a $400K difference in retirement gives some room for that.

Thanks, perhaps you could point readers to an article if you have come across one on this topic.

#83 Victor V on 12.20.17 at 8:41 pm

If you only have 30 seconds to spare, I implore you to watch this clip as Trudeau tries to explain his Aga Khan vacation. Brutal.

http://www.cbc.ca/player/play/1120813635786/

#84 Ronaldo on 12.20.17 at 8:42 pm

It’s unfortunate that the people that the TFSA was mainly intended for (low income) are not using it. You can lead a horse to water but you can’t make it drink. Anyway, for others without a defined benefit plan, hard to beat.

#85 El Joko on 12.20.17 at 8:43 pm

Garth, not gonna lie, you have some horrifying economic ideas.

#86 For those about to flop... on 12.20.17 at 8:44 pm

I just don’t sit around doing Pink Snow reports ,I am in constant contact with the Prime Ministers Office to try and get them to agree to let me use the image of The Metrosexual Messiah on a margarine type product.

I already know what I am going to call it.

I Can’t Believe It’s Not Stutter…

M43BC

#87 The Great Gazoo on 12.20.17 at 8:49 pm

5 year bond yield closed over 1.80% today. If yields hold in this range, fixed rate mortgages are going up at around the same time as the B-20 bomber arrives.

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

#88 Al on 12.20.17 at 8:49 pm

Good suggestion about lower income and higher GST. Some of your thoughts were to progressive for the blue team.

RSP is better if you have much lower cost of living than your salary/marginal tax rate. Which is better depends on your situation, thankfully we can use both :).

#89 Where's The Money Guido? on 12.20.17 at 8:51 pm

Well Trudy gets a slap on the wrist for partying with Aga Khan, known as the billionaire Islamic playboy with beautiful women at his beck and call..
Trudy and the Libs gave the Aga Foundation $55 million this year.
Some info on the Aga Khan:
http://www.dailymail.co.uk/news/article-2223084/Sarkozy-exonerated-billionaire-Aga-Khan-paying-tax-corruption-inquiry-hears.html
What is the potential conflict?
Last year, the Aga Khan Foundation received more than $47 million from the federal government, according to lobbying records.
Between 2012 and 2017, the Aga Khan Foundation Canada received $75 million from Global Affairs Canada to fund the Partnership for Advancing Human Development in Africa and Asia and $40 million between 2012 and 2015 for improving maternal, newborn and child health in Afghanistan, according to Charity Intelligence Canada.

The same site notes the foundation will be receiving $55 million from 2016 to 2020 for Global Affairs’ Health Action Plan for Afghanistan project.
Would love to see the % that reached the people they’re pleading for: http://www.cbc.ca/news/business/checkout-donations-poor-transparency-about-where-the-money-goes-1.2963923
The charity business is a hard nut to crack in Canada:
https://www.thestar.com/news/gta/2011/11/15/audit_of_charities_encounters_resistance.html
I’m all for giving but hasn’t this turned into a huge scam worldwide to fleece the plebes in the guise of “charity”.
Look at the Clinton Foundation: http://www.thetribunepapers.com/2017/10/25/the-clinton-foundation-megascam/
Maybe the party at the Aga’s private island was just one meeting to set up another “charity” in Canada to benefit anyone but the elite insiders.
We have to look into that since Trudy is now a confirmed conflictor.
That money should be returned to the taxpayers until it is sorted out!!!!
Billionaire Charities-The New Red Cross…..

#90 Felix on 12.20.17 at 8:54 pm

The sad truth about today’s dog pic is how many of those cute, stupid puppies will go on to become murderers.

It happens all the time, humans.

https://www.thestar.com/news/world/2017/12/20/people-couldnt-believe-she-was-killed-by-her-two-dogs-so-the-sheriff-described-the-horror.html

Eaten by her ‘beloved dog pets’. Super Creepy.

So, what to do?

Trust dogs to be dumb and vicious suck-ups.

Trust cats to always be smarter than dogs, and you too.

Trust realtors…..never.

#91 For those about to flop... on 12.20.17 at 8:54 pm

Hey Smartie,remember yesterday what I told you about zolo updating the links?

Here is the Discovery house from yesterday.

Updated.

Sold 5 days ago…

M43BC

https://www.zolo.ca/vancouver-real-estate/2938-discovery-street

#92 JMS on 12.20.17 at 8:58 pm

My spouse’s parents haven’t used any of their TFSA room, nor will be able to at anytime in the future. So, an idea that’s been kicking around in my head is that my spouse gifts them money to fill at least one of them. Dividends go to the parents, and growth goes to us when the parent unfortunately dies. This all is locked down in a will, of course.

Is this an insane idea, or even legal?

Our RRSPs and TFSAs are maxed btw.

#93 SteveSaretsky on 12.20.17 at 9:03 pm

Sir Garth:

We need to clear up some statistics from yesterday.

Condo Ownership- Year Built – All – Non Resident – %

#94 Seattle on 12.20.17 at 9:05 pm

The TFSA bit me when I took a job stateside. The US doesn’t respect it, and I was forced to liquidate it when I left. The accountant costs to report it properly to the IRS trumped the growth. It would be nice if this was fixed during the NAFTA negotiations (and vice versa for Roth IRAs), but I’m not holding my breath.

#95 tccontrarian on 12.20.17 at 9:06 pm

Love the dog returns (as per photo): 1 female gives a ‘multiple’ of 11 (puppies).

Matching the current returns I’m getting out of one of my pot stocks! :-)

Unfortunately, not in a TFSA – so some yuuge cap gains coming next year.

TCC

#96 SunShowers on 12.20.17 at 9:06 pm

That made no sense. – Garth

——————

I’ll summarize.

A meager 10% increase in home ownership rate over the last 40 years (especially since most of the housing insanity is restricted to GTA/YVR) does not on its own (or even mostly) explain the precipitous decline we’ve seen in middle class saving/investing over the same time period.

An increase in home ownership from 60% to 70% is a 17% gain, not 10%. Meanwhile house prices have escalated, which people have financed with epic debt (not increased incomes). The middle class is the architect of its own demise. – Garth

#97 MicroGX on 12.20.17 at 9:09 pm

Thanks for the reminder…..and encouragement. Luv this blog, mostly the pup pics!

#98 gfd on 12.20.17 at 9:11 pm

US Tax reform: AT&T just announced that they will be increasing their spending by $1 Billion and creating 7000 jobs. Their front line staff will all be given $1000 in bonuses once the bill becomes law. Watch for more of this news in the coming days thanks to the massive tax reform, something our politicians didn’t learn while in college.

#99 TalkingPie on 12.20.17 at 9:13 pm

#12 Rexx Rock on 12.20.17 at 6:15 pm

My conservative balanced tfsa Questrade portfolio gave me huge gains.$123 for last 6 months for $25,000.Should ya got a brain dead GIC that would have paid me more!Balanced portfolios didn’t work for me.

********************************************

Funny, my Questrade account, which I started funding in May using the 60/40 Canadian Couch Potato model portfolio, is up $2,500 on the $66,000 total I gradually fed in since then. Since much of the money hasn’t been in there the full term, it’s difficult to say, but I’d guestimate around a 7% annualized return.

#100 Inside Information on 12.20.17 at 9:15 pm

Sir Garth:

We need to clear up some statistics up from yesterday.

Condo Ownership Area – % Foreign- Year Built – All # – Non Resident #

Toronto, CMA – 11.32% Foreign Investor – 2016 to 2017 – 4,513 – 511

Toronto – 11.64% Foreign Investor – 2016 to 2017 – 4199 – 489

Vancouver, CMA – 15.54% Foreign Investor – 2016 to 2017 – 8743 – 1359

Vancouver – 19.14% Foreign Investor – 2016 to 2017 – 3432 – 657

#101 SunShowers on 12.20.17 at 9:16 pm

(not increased incomes) – Garth

———————————

Yes! Now we’re getting somewhere!
Why haven’t incomes increased?

#102 cramar on 12.20.17 at 9:30 pm

In case anyone wants to read the article:

“b”Ten years on, the TFSA’s success could lead to its demise”/b”In case anyone wants to read the article:

Ten years on, the TFSA’s success could lead to its demise

https://www.theglobeandmail.com/globe-investor/globe-advisor/ten-years-on-the-tfsas-success-could-lead-to-its-demise/article37383270/

https://www.theglobeandmail.com/globe-investor/globe-advisor/ten-years-on-the-tfsas-success-could-lead-to-its-demise/article37383270/

One opinion. Ignore it. – Garth

#103 the Jaguar on 12.20.17 at 9:34 pm

Funny how the Christmas season brings out all kinds of emotions, stress and impatience in people. On some topics it’s hard to know what the real truth is…statistics have some merit, but so do boots on the ground.
Both offer an objective view based on what they have discovered. I know one thing for sure. I really value the opinions of the owner of this blog (Garth), but also really appreciate the contributions of some of the more intelligent bloggers ( like Billy Bob). Sometimes I think we just have to agree to disagree. The truth always comes out in the end, but the debate should be respectful and interesting. Without alternate points of view it would just be so self congratulatory and boring.
I hope Bandit has some sort of little flashing collar or other fashionable item to draw attention to him as the season seeks to mirror his wardrobe. Lots of snow falling out here in the mountain areas, but we know it is only temporary. The sun never leaves the prairies for long, not just from a climate perspective, but from one of hope, faith, charity and renewal. Merry Christmas little spirit dog..

#104 Royal City Dweller on 12.20.17 at 9:37 pm

#99 TalkingPie
“Funny, my Questrade account, which I started funding in May using the 60/40 Canadian Couch Potato model portfolio, is up $2,500 on the $66,000 total”
===========================
Congratulations.
This is maybe off topic but what’s wrong with no fee / low fee/software based investing schemes?
Such as this one:
https://www.theglobeandmail.com/globe-investor/funds-and-etfs/etfs/bmo-slashes-minimum-account-size-of-roboadviser-platform/article37388591/
No match for human managed schemes?

#105 Danny on 12.20.17 at 9:40 pm

TFSA…..good stuff.
As to your history with Harper….that incident is when I heard about you and is when you won my respect.
Back then thought that Harpers tight reign….was not fair to MPs responsibility towards Government and their constituents.
Of course these days with King Trump…..and all of the people he installed in the White House during this last boisterous year…..ran far from the intellectually deficient Trump……Harper was not that bad.
Einstein was right we live in a universe of relativity. Who would have ever imagined the US of A…..heading back to the Dark Ages.
Hopefully you agree…..your lucky not to have joined the pathetic Trump White House staff?…..like Tillerson who says the opposite of Trump temper tantrum pathetic flow.

#106 Leo Trollstoy on 12.20.17 at 9:44 pm

Canada NEEDS more tech workers! The demand is massive and can’t be filled locally!

https://mobile.nytimes.com/2017/12/19/nyregion/trump-legal-immigration-canada-tech-jobs.html

Don’t bother applying if you suck.

#107 ISAAC BROCK SOCIETY TORONTO on 12.20.17 at 9:47 pm

Your precious TFSA does NOT benefit 1.5 million Canadian citizens living in Canada who happen to also be US Persons. The US does NOT recognize it as tax free as it is considered a trust. In FACT anyone with a Green Card cannot benefit from a TFSA. Good job Garth. Do you even have the guts to tell your readers that Canadian Americans don’t have the same rights as other Canadians? Didn’t think so.

Why US citizens in Canada should NOT invest in TFSAs or any other “Foreign Trust” (RRSPs excepted)

http://isaacbrocksociety.ca/2012/10/05/why-us-citizens-in-canada-should-not-invest-in-tfsas-or-any-other-foreign-trust-rrsps-excepted/

Why dis me? Go yell at Washington. – Garth

#108 Mark on 12.20.17 at 10:00 pm

“#106 Leo Trollstoy on 12.20.17 at 9:44 pm
Canada NEEDS more tech workers! The demand is massive and can’t be filled locally!”

Didn’t I provide a link yesterday to the APEGBC job board (a place where employers may logically look for software and computer engineers if there was a shortage, as they do for other types of engineers) that showed such claim to be dishonest? It has nothing to do with ‘sucking’ or not, there is a massive glut of Canadian IT workers and engineers. Foreign nationals would only be needed by companies trying to circumvent the spirit and the intent of Canadian immigration law, that is, to protect Canadian workers first.

https://www.ospe.on.ca/public/documents/advocacy/2015-crisis-in-engineering-labour-market.pdf

In fact, Canada has such an IT talent glut that salaries in major Canadian cities for IT talent are structurally some of the lowest in North America, despite having upper-quartile labour quality:

http://i.imgur.com/91qsdcm.jpg

The chronically low salaries doesn’t speak to a shortage at all. In fact, the logical implication of such (which has plenty of anecdotal evidence to back such up) is that lots of very talented people are being routinely excluded from the labour force involuntarily. A real tragedy for those involved and for the chronically weak Canadian economy.

#109 Derwood on 12.20.17 at 10:09 pm

Thank you for your website and your topic today. Is it advisable to borrow money to max out the TFSA? No debt, no mortgage.

Probably not. – Garth

#110 rainclouds on 12.20.17 at 10:12 pm

Went to the Denver Mint 45min free tour Monday (they make coins) got 2 new pennies FREE!
The security was over the top stupid given there was 30 ft and 1/2 inch of glass separating the unwashed from the rivers of quarters. Americans.

Started jawing with the tour dude about the penny and costs. (3 cents to make a penny) He mentioned a Canadian economist did a study last year. Turns out corps in Canada figured out almost immediately to round up prices to 98cents. Big win. Millions. We lose…….Canadians.

Denver booming . it’s the weed :-)
Now in Santa Fe, no boom or weed. Coincidence?

#111 For those about to flop... on 12.20.17 at 10:12 pm

Recent Sale Report/Realtor Assistance Needed.

This one is a little more personal than the others as this is one of the houses in my neighborhood that i started to follow in Autumn 2016,realizing there was no margin for error and after finding multiple cases within a couple of blocks of my house in a moment of madness decided to try and track as much of the market as possible while off work for seven months while recovering from major ankle surgery.

The sale of this house was quite a saga from outside appearances.

Purchased for 1.51 in March 2016 and then renovated ,mainly interior,and put back on the market in August 2016 it was then removed and a bit more renovating seemed to be done mainly concentrating this time on the outside aesthetics of the property and then put back on in October of the same year.

And so it was basically on the market for over a year and a half,not expensive by Vancouver standards,directly opposite a school and after learning how to walk again every time I walked by that place I knew that I was onto something with my study and waited for these guys to accept their fate,whatever that maybe.

They were hoping to get 1.78 at one stage but the last time I posted it on the blog they were down to 1.49.

So to recap

Paid 1.51 March 2016

2 stabs at renovating

Asking 1.49

Sold December 11th 2017 for ???

Tell The Flop what happened for old times sake…

M43BC

https://www.zolo.ca/vancouver-real-estate/5540-windsor-street

#112 Big Daddy on 12.20.17 at 10:15 pm

Oh….and btw….Brick Society….while working in the US I had to account for my TFSA separately as they don’t recognize it. The best thing for an American in Canada to do is leave…..or shut up. My financial and social benefits while living and working in the US far outweigh the TFSA…..in Texas, for example there is no state tax and incomes are double, houses and groceries are half (no bread price fixing…
And isn’t it disgusting the Weston won’t even be charged) so the benefits are significantly higher. I would recommend any undergrad or grad to run out of Canada today for a much higher benefit and fun lifestyle in Texas. For ex….a house costing 2 million here is $350 there. My big block Camaro convertible (really a bad ass machine for those perfect road trips on thousand miles super highways at 100 mph….. $19,999.00 brand new….in Vancouver….same car…..$52,000.00. Forget the TFSA….get out of Canada….that’s a money making strategy and turbo charged career opportunity right there…..ya’ll. And guys…..the girls in Texas……oh my.

#113 Eyestrain on 12.20.17 at 10:18 pm

I have always wanted to ask the architects of the TFSA why they needed to increase the army of paper flutterers instead of simply giving everyone a cumulative $400 per-year non-employment income exemption. That’s about an 8% return on $5500, although most people won’t achieve that. Anymore is gambling.

I often wonder how much it costs Ottawa & the Banks (i.e. us) for us not to pay taxes on our TFSA’s.

#114 Jennifer on 12.20.17 at 10:28 pm

Hi Garth – thank you for this post! What I don’t understand is why would anyone prioritize their RRSP over their TFSA. Is it best to maximize the TFSA first, and then if you have more to invest, do it through an RRSP? Or am I missing something? One other question – if I was getting ready for a maternity leave (my work doesn’t top up) is it still better to prioritize the TFSA? Thanks!

The RRSP/TFSA-first decision depends on your personal circumstances – income, pension, assets, family status etc. No set answer. As for the mat leave, you mean hubs didn’t set up a spousal for you three years ago to draw upon? Shame on him. – Garth

#115 not so liquid in calgary on 12.20.17 at 10:39 pm

Garth, you first gained my respect when you were in Mulroney’s cabinet. You said you were going to simplify the tax code to the point of putting yourself out of work…nice try anyway. Wish I had found your blog just a few years earlier

#116 Unhinged Trader on 12.20.17 at 10:40 pm

The Bitcoin-related companies on the TSXV have had some stunning growth lately as boomer money seeks to get into this new emerging asset.

HIVE
CUV
KASH

Have give me well over 2000%. And you can shelter these in your TFSA. Forget 7%.

#117 Fish on 12.20.17 at 10:47 pm

What I am hearing our vets are starving, don’t even get paid correct Ly
Meanwhile we have cell phone plans going on cheap

#118 down_boy on 12.20.17 at 10:53 pm

I do not have a tfsa, at least I don’t think so. I would like a tfsa. I ‘heard’ that you get one from a bank. So I went to the bank, booked a meeting with one of the big 2, and met with nice agent. I explained I wanted a tfsa. She asked ‘managed’ or self directed?
??

Whats the diff? She explained and said I had to meet certain criteria, sign stuff and evalute my risk level.
??
I asked if I get self directed what can I put in there? She asked, like what? I said, I dunno, like your bank shares. She chuckled and said those are preferred shares. Okay, I guess not, I thought. After a few more questions I was getting blurry and asked for an instruction manual to peruse later. I got some generic brochures. That was two years ago.

Question.. is there a how to video or website that shows exactly how to buy a tfsa, bring it home, unbox it, plug it in, and demonstrate exactly what things can go in it, and where I get those things? If you say get a financial advisor, I did that at the bank to no avail.

I want to read/watch a Step 1, step 2, step 3… I’m sure, if people are like me, its all a big confusing mystery.

#119 Nick on 12.20.17 at 11:04 pm

I have a buddy that started heavily investing in Canopy Growth (WEED) back when it was at $2. He put it all in his TFSA, and maxed out for him and his wife. He sheepishly admitted that they’ve each got over $300k now.

I also read a story about a guy that accumulated over $1.5M in his and the CRA was investigating. I am convinced it’s a matter of time before they “close the loophole …. for fairness”.

Although I’ll bet there’s a bunch of stories about the max contributions dwindling also, you just likely never hear about them ;)

#120 Nick on 12.20.17 at 11:10 pm

Here is the article:

https://www.google.ca/amp/business.financialpost.com/perso&nal-finance/tfsa/this-bay-st-trader-managed-to-amass-1-25-million-in-his-tfsa-now-the-taxman-wants-to-know-how/amp

Hey Garth, I guess this means you need to stay under the radar with your your TFSA…. cause you know; it’s your day job and it wouldn’t be “fair”

#121 Armybrat on 12.20.17 at 11:47 pm

TFSA is awesome. Thank you, Garth.

Merry Christmas!

#122 ISAAC BROCK SOCIETY TORONTO on 12.20.17 at 11:49 pm

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#123 ISAAC BROCK SOCIETY TORONTO on 12.21.17 at 12:05 am

DELETED

#124 Fuzzy Camel on 12.21.17 at 12:06 am

My only concern with the TFSA program is that Trudeau the feminist dullard will cancel the program.

The Liberals will make up some phoney excuse that evil white men are using it to avoid paying taxes, and poor women are just too oppressed to even be bother with it.

What are the chances Garth?

#125 reply to #118 down_boy on 12.21.17 at 12:08 am

Hey down_boy, I opened up an i-trade account with scotiabank about a year ago. If you go to your banks home page they will probably have a tab called “investing” or “investments”. That’s where you can go for info on opening an account. With scotiabank you can open a practice account to get the feel for making trades etc. I got most of my info about specific etfs from this blog. Garth has done posts in the past about balanced portfolios. Canadian Couch Potato is an on-line resource others here have recommended.

Good luck!

#126 The Awakend One on 12.21.17 at 12:17 am

Thanks Garth!

For your good karmic deeds Sir G, may you be ridding on Bandit’s back in your miniature spirit form (half naked in Sponge-Bob-theme shorts of course), and be floating around in the Fuzzy Sphere of Doggies’ Heaven universe once you depart this earthly ground… with 10,000 furry creatures of all breeds & sizes under the eternal sun…

Sounds cool? btw, would you offer me a special rate on my portfolio if I submit it to your driving?

#127 ISAAC BROCK SOCIETY TORONTO on 12.21.17 at 12:23 am

DELETED

#128 ISAAC BROCK SOCIETY TORONTO on 12.21.17 at 12:30 am

Big Daddy

Tell that to the head doctor of the St Paul’s Hospital in Vancouver who is a Canadian but married to a US citizen Canadian. He told me a couple years ago that he would owe almost half a million in capital gains if he sold his west side Vancouver home they bought a decade or more ago. What do you think about that? Should he leave and move back to the great and greater (under Trump) USA and leave this sinking ship behind? Why not? Many doctors and other professionals are now thinking about leaving Canada now that Trump has lowered taxes and is creating tons of new jobs.

#129 Where's The Money Guido? on 12.21.17 at 12:38 am

Ooops…Had it backwards: Re: Maybe the party at the Aga’s private island was just one meeting to set up another “charity” in Canada to benefit anyone but the elite insiders.
Should be: benefit the elite insiders…
d’oh!
The $2 charity at Loblaws Real Canadian Superstore that’s at the end of your self check out purchase benefits Mr. Galen Weston more than the charities.
I asked, after watching CBC Marketplace on charities, if they would show me how much % went to the charity compared to their expenses, as they should have that at each teller, by law I thought. Well they didn’t and couldn’t give me an answer.
The teller then asked if I wanted to speak with the manager and I said, for sure.
He wouldn’t come down to speak with me. I have spoken to him many times on other issues.
SCAM!!!!!!!!
They’re all picking your pocket using your sympathies.

#130 Learning on 12.21.17 at 12:48 am

#53 TFSA contributions

I think what it means:
$5500 this year (i.e. in 2017).
Then for next 3 decades starting in 2018:
$100/week for a total of $5200/year

Invest on a weekly basis instead of lump sum.

#131 Jimi on 12.21.17 at 1:14 am

Or,
just buy Verge(XVG) and get rich like I did on Bitcoin.

#132 T on 12.21.17 at 2:38 am

#108 Mark on 12.20.17 at 10:00 pm
“#106 Leo Trollstoy on 12.20.17 at 9:44 pm
Canada NEEDS more tech workers! The demand is massive and can’t be filled locally!”

Didn’t I provide a link yesterday to the APEGBC job board (a place where employers may logically look for software and computer engineers if there was a shortage

————

Mark,

No self respecting technology company utilizes any of the resources I have seen you reference in these comments past and present.

Try looking on LinkedIn, indeed, monster.

Anyone and everyone knows this.

Good luck!

#133 Uros on 12.21.17 at 3:17 am

Thank you Garth for doing such a noble thing as influencing the government to introduce TFSA. Our family topped it. And thank you for continued everyday effort to educate Canadians on the importance of tax avoidance (as opposed to illegal tax evasion). You are one of the people that make Canada remain one of the best places in the world.

#134 Midnights on 12.21.17 at 4:16 am

Thanks Garth…
I didn’t know you thought up the idea of the TFSA.

#135 Dharma Bum on 12.21.17 at 6:30 am

The TFSA is a great tool to grow your investments.
However, always beware of the likelihood that our criminal government will rescind it.
As the government becomes increasingly desperate to feed its voracious appetite for cash to squander, it will come after YOUR tax sheltered money.
Take advantage while you can.
T2 already cut the benefit in half.
There’s nothing stopping the little twerp from cutting it down to ZERO.
Zero – point – Zero.

https://www.youtube.com/watch?v=NkCa49I6_xw

#136 Bhabie_Adele on 12.21.17 at 6:31 am

wot JT got Bhabie/Adele ©

Old friend, why are you so shy?
u got
spare change
spare heir
spare hair

I heard that you’re settled down
That you found a girl and your married now

no stash
his dish
not 4 chafin

I hate to turn up out of the blue uninvited
But I couldn’t stay away, couldn’t fight it

he be trippin
wit aga khan
no neo-con con

Regrets and mistakes, they’re memories made
he say
he sorry
why worry

I had hoped you’d see my face
And be reminded that, for me, it isn’t over

props to GT for what he do
I wish nothing but the best for you
tru dat

#137 Dharma Bum on 12.21.17 at 6:42 am

#107 Isaac Brock Society Canada

Do you even have the guts to tell your readers that Canadian Americans don’t have the same rights as other Canadians?
——————————————————————–

Are you insane?

Why would it take “guts” to address that issue (i.e., non-issue)?

If you are a U.S. citizen, you’re already massively privileged.

Your mobility advantage alone is ridiculously phenomenal.

https://www.youtube.com/watch?v=hxGgnI6kCrs

#138 Jungle on 12.21.17 at 7:00 am

Dont act silly, the GOV is not going to tax TFSA in the future… why? Hmm lets look

only 10% of population max tfsa
data a couple years old says 3/4 of Canadians using TFSA invest in cash (57%) and GICs (23%)

So not a good yield there

If there is any risk, (which I believe still unlikely), is the GOV may stop the contribution limit for TFSA, since it appears majority of Canadians don’t use it for full potential.

The only real risk right now if you day trade and get a huge TFSA, CRA will consider you a business and tax accordingly.

#139 Rooster on 12.21.17 at 7:23 am

#122 ..123…..127 ISAAC BROCK SOCIETY TORONTO on 12.20.17 at 11:49 pm

DELETED
DELETED
DELETED

********
wachu say (:-0

Sir Isaac Brock, aka the Motorcity Mauler, wanted no truck with damn Yankees. We in Canada welcome foreigners of all stripes, but only really like the quiet ones. Pipe down.

#140 Ontario's Left Coast on 12.21.17 at 7:26 am

Thanks so much for this gift, Garth! Our $11K is poised for transfer as soon as we turn the page on 2017.

I haven’t posted much lately (but read religiously every night), so shout-out to Flopper, Smokey and all the rest of the vets on here…. By the way (although he drove me nuts), what the heck happened to Freedom First?

#141 Big Daddy on 12.21.17 at 8:16 am

#128 Brockster…..Wow…..hospital head…..dumb enough to put his American wife’s name on title knowing it would trigger a capital gain on a real estate profit over $1 million dollars as per her US tax filing. Obviously the guy never talked to an accountant. Next time marry a Canadian gal.

Now that the Obama health care rip off is dead the opportunities for doctors in the US has gone exponential. Any doctor moving to the US would easily make that half mill Canadian back in a year, all the while enjoying the incredible lifestyle benefits of having a boat dock in your back yard and a practise in Florida where zero tax on income and real estate is the norm. Tell your doctor friend to smarten up, bite his stupid mistake, and get the hell out of Canada, away from Trudeaus blood sucking doctor hating taxation regime.

#142 coopoiler on 12.21.17 at 8:23 am

Morning all
The first paragraph inspired me to tell you how I too wrote the finance minister suggesting married people be allowed to split income (after all if the same people divorce they can split income) how does that benefit society. I did not put any money in a TFSA for the first four years, why you ask? Government history of plans. For example, contribute up $3500 per year and loss it if you do not use it. Registered Education Saving Plans also went through several versions. 1. Pick a child and if they do not use funds that get taxed back at you. 2. Plans that collected funds as a group then divided proceeds among all that used it, if your child did not well thanks for contribution (hard to know Childs plan at birth). So history made me sceptical. I was convinced that the TSFA was to good to last and would be cancelled shortly after their implementation, when it wasn’t I contributed the max to both spousal and myself plans, they work great. Now pondering starting them for kids. They seem reluctant to start themselves, even with encouragement.

#143 maxx on 12.21.17 at 8:50 am

Best pic of a superhero I’ve seen in a while…….and she’ll care for and defend every single one to the last fiber of her being. Responsible.

“And now, for something completely different”:

…..so very unlike her, the crew at the helm, have visions of sugar-white sand dancing ’round in their heads. For free, for free, for me, for me, but not for the others, those taxpaying plebes.

And from my TV there arose such a patter, I wandered over to see what was the matter. I couldn’t believe it, I shook my poor head, but sadly it was, more tax and less bread.

Heads up, chins up, c’mon let’s be brave, we’ll put up, we’ll shut up – get on with our trades. We’ll get there, we hope, I hear them all cheer, ’till more and more tax is announced for next year. They’re coming to get you, make no mistake here, you’re numbered and graded for increases, I fear.

I can’t get a job, I lost it or worse, I must find a way to pay off debts, that old curse. There’s payday, there’s payday, so easy and near. Oh yes!, let’s go get some, just a pittance to clear.

And for those who are “lucky” and work on the ship, the Phoenix won’t rise and offer holiday cheer.

It can’t possibly get any more bizarre.

Can it?

Happy Holidays and a very prosperous New Year to Garth, Dorothy, Bandit and family of howlers, yowlers and growlers.

#144 Eyestrain on 12.21.17 at 9:02 am

#138 Big Daddy
——-
Didn’t Big Daddy get the Big “C”?
(Cat on a hot tin roof ;-)

:-(
Polite society frowns when I rif on MD’s, but IMHO if they spent more time on comparative anatomy and less on comparing portfolios, your mother might be able to get her hip fixed before your dog.

Canada is #5 for Doc salaries (US is #3), and 7th of 11 for quality of health care (US is # 11). I see a correlation here, but as always, it does not prove causation.

It certainly adds a wrinkle to whether we should give our Docs more for being so awesomely better than the US quacks. Would we miss them? Like a dog misses his hip, but I can get my pills online, and maybe their replacements will be better.

Stay healthy,

Merry Xmas & Happy Hannukah

#145 Where's The Money Guido? on 12.21.17 at 9:30 am

Here is a small list of the Liberal government spending during Justin Trudeaus time in office as our “leader” , the list grows daily , there are many I have missed . This information is readily available over the internet to those who are willing to do a small amount of research.

The Clinton Foundation $600 Million
Hamas $351 Million
Pakistan $2 Billion
Libya $1.5 Billion
Egypt $397 Million
Mexico $622 Million
Russia $380 Million
Haiti $1.4 Billion
Jordan $463 Million
Kenya $816 Million
Sudan $870 Million
Nigeria $456 Million
Uganda $451 Million
Congo $359 Million
Ethiopia $981 Million
South Africa $566 Million
Senegal $698 Million
Mozambique $404 Million
Zambia $331 Million
Kazakhstan $304 Million
Iraq $1.08 Billion
Tanzania $554 Million.

Wonder how many gave kickbacks to the 40 year old boy tear machine. He sure fooled me…not. At least I didn’t vote for him.
$600 million to the most corrupt foundation in the world imo.
Clinton Foundation moved all that money donated (over $1 billion) to Switzerland just before the last US election! Poof, gone and nary a home built in Haiti….

#146 LivinLarge on 12.21.17 at 9:49 am

Never say never Fearless Leader.

In about 10 years, what ever flavour is in Sussex Place will be looking very covetously at the income the smart money folks who jumped into TFSAs early are earning. Then the nickel and diming begins. I don’t know form that will take but I have zero doubts that it will come.

As for the rest of this post, kuddos. Max the most lucrative perk any Canadian government will likely ever give you before socking a cent anywhere else. AND LEAVE IT UNTOUCHED!!!!

Now, how many Canadians are actually maxing their RSPs let alone their TFSAs all because they want that enhanced return cheque but still failing to sock it right back into any sheltered vehicle? Lots of vacations, smartphones, TVs and other foolishness are gobbled up in the April/May feeding frenzy each year.

Nicest post all year.

#147 Red State on 12.21.17 at 9:51 am

Sorry Garth,

But the TFSA is yet another government run SCAM. Where they change the rules whenever they want to suit themselves and screw the taxpayers who get sucked into these schemes.

Proof: CRA now auditing people who “make too much money” aka profits in their TFsA’s …calling them “operating a business”….without even informing people of how many trades constitutes a business or what criteria they use….of course if you LOSE money in your TFSA then you can’t claim a capital loss either.

So CRA wants to have their cake and eat it too!

It should be illegal for governments to change and alter the rules of any product or scheme that they encourage citizens to invest in as it violates the basic tenants of contract law.

Other TFSA changes i am expecting:

1) taxing it upon death
2) lifetime contribution limits
3) means testing (CPP/OAS)

Taxing professional day traders who operate within the TFSA is completely understandable. The CRA is correct to tax this as business income. It corrupts the intent of the shelter. Suck it up. – Garth

#148 Fred on 12.21.17 at 9:56 am

Thanks Garth for the reminder. Have learned so much from your blog.

opened a TFSA for our older boy when he turned 18. Showed him a compound interest calculator- plugged some numbers and showed him the projected tally at age 55……………..he likes to add to it every year, :)

Merry Christmas to you and your family

#149 crossbordershopper on 12.21.17 at 10:06 am

tax rates crash in america, and canadians are happy because they can put in $4250 usd in a TFSA annually. Its all relative, and relatively, i would take the US, low taxes all the time over this ponzi scheme called Canada.
If you think that Trudeau or some other left leaning government in Canada is not going to asset test or income test TFSA 30 years down the road, then you have already been passing around the weed already.
In Canada you are paying taxes for people who got sick, in their last year of life, then they died, it was financed so your taxes are interest on debt which was taken on to look after this dead guy.
Canadian taxes are crazy now compared to the USA, and why doesnt Garth talk about increasing CPP rates, in 2019 to 2024 to 5.95%, self employeed is double, minus the deduction. crazy.
Canadian dollars, high taxes, poor weather, slow economy,high real estate costs. i dont know why anyone stays here.

#150 -=jwk=- on 12.21.17 at 10:07 am

@ #82
Assuming an 8% compound return:

After 25 years the TFSA from the $50,000 contribution is $1,350,000.

Does not compute. 1.08^25=6.848. You would have 342k in your TFSA with a (extremely optimistic) 8% growth over 25 years.

To turn 50k into 1.35M in 25 years you would need a 25yr run of 14% interest rates…

#151 re., 148 on 12.21.17 at 10:19 am

tax rates crash in america, and canadians are happy because they can put in $4250 usd in a TFSA annually. Its all relative, and relatively, i would take the US, low taxes all the time over this ponzi scheme called Canada.
If you think that Trudeau or some other left leaning government in Canada is not going to asset test or income test TFSA 30 years down the road, then you have already been passing around the weed already.
In Canada you are paying taxes for people who got sick, in their last year of life, then they died, it was financed so your taxes are interest on debt which was taken on to look after this dead guy.
Canadian taxes are crazy now compared to the USA, and why doesnt Garth talk about increasing CPP rates, in 2019 to 2024 to 5.95%, self employeed is double, minus the deduction. crazy.
Canadian dollars, high taxes, poor weather, slow economy,high real estate costs. i dont know why anyone stays here.
…………………..

Yellen WARNED of the USA debt issue. This ‘tax cut’ runs a significant risk of ncreasing said debt dramatically. USA TOO has to pay INTEREST on its debt. The unfunded liabilities of medicaid, SS,medicare is ridiculous

but, by all means, keep ragging on Canada. AND GET OUT

#152 Smoking Man on 12.21.17 at 10:24 am

The Truth is out now. I give you a Nictonite plasma flyer with stealth mode deactivated .

https://youtu.be/3w0aXTfDDq8

#153 Bhad Bhabie on 12.21.17 at 10:29 am

#143 maxx on 12.21.17 at 8:50 am

…..so very unlike her, the crew at the helm, have visions of sugar-white sand dancing ’round in their heads.
******
whereda rimein

#154 LivinLarge on 12.21.17 at 10:41 am

JWK, did you miss where Fearless Leader said to add $100 per month to the kitty and then compound the pot?

While were on the TFSA. You regularly comment that T2 gutted the TFSA contribution limit (which I conceptually disagree with) you have to my memory never mentioned the actual real gutting of the Trust system that hit the ground January 1 2016 and felt in 2017. As my knowledge serves me, this gutting was actually initiated in CRA notices of changes as part of the 2014 budget from “Ol’ Helmet Head” but this change to the tax rate on Trust income may have been an enhancement brought to us by T2.

By changing the tax rate for Trust income to the real max marginal rate rather than the the trust’s income recipient’s marginal rate has in effect as much as doubled the tax hit on that income and in one stroke of the pen removed the purpose of Trusts like Spousal Trusts for elderly widows. Taxing that income at the maximum marginal rate refardless of the source type of the income rather than considering the income source like dividends eliminates the purpose of the dividend tax credit in the first place.

The moral of this little rant is that the screwings we take that are simply burried into the arcane changes to the Tax Act are far more onerous than the ones the governments tell us are coming.

#155 Steve-O on 12.21.17 at 10:44 am

Hi Garth,

Sorry to nit pick your words, but when you say in a few days we can contribute more to our TFSA, do you mean we have to wait until January 1st, or that we can transfer in there a little before that and not get spanked?

Contributions are allowed on a calendar basis. Don’t break the rules. Do you think you’re Bill Morneau? – Garth

#156 Bhad Bhabie on 12.21.17 at 10:50 am

#147 Red State on 12.21.17 at 9:51 am
… CRA now auditing people who “make too much money” aka profits in their TFsA’s …

Taxing professional day traders who operate within the TFSA is completely understandable. The CRA is correct to tax this as business income. It corrupts the intent of the shelter. Suck it up. – Garth

*******

Garth is completely correct here, skirting the intent of the rules is tax avoidance, and is illegal. What I don’t understand is how such tax avoidance rules don’t apply to people who actually operate a real small business. Anybody with a pulse?

#157 NoName on 12.21.17 at 10:51 am

https://www.bloomberg.com/news/articles/2017-12-21/crypto-craze-sees-long-island-iced-tea-rename-as-long-blockchain

Humans definitely doomed.

#158 Bhad Bhabie on 12.21.17 at 10:52 am

help
ID theft

#159 Victor V on 12.21.17 at 10:56 am

https://www.bnn.ca/loonie-hits-weekly-high-as-inflation-retail-sales-raise-rate-hike-hopes-1.950001

The Canadian dollar hit its strongest level against its U.S. counterpart in a week on Thursday, boosted by strong inflation and retail sales data that raised expectations the Bank of Canada could hike rates again as soon as January.

#160 Howard on 12.21.17 at 11:07 am

Buying a home in Canada is less affordable than any time since 1990: RBC Economics

http://www.rbc.com/newsroom/news/2017/20171221-housing-affordability.html

#161 Howard on 12.21.17 at 11:12 am

#156 Bhad Bhabie on 12.21.17 at 10:50 am

#147 Red State on 12.21.17 at 9:51 am
… CRA now auditing people who “make too much money” aka profits in their TFsA’s …

Taxing professional day traders who operate within the TFSA is completely understandable. The CRA is correct to tax this as business income. It corrupts the intent of the shelter. Suck it up. – Garth

*******

Garth is completely correct here, skirting the intent of the rules is tax avoidance, and is illegal. What I don’t understand is how such tax avoidance rules don’t apply to people who actually operate a real small business. Anybody with a pulse?

————————————–

Pedantry alert, but get the terms right.

Tax avoidance is perfectly legal, and clearly advisable.

Tax evasion is illegal.

Our Prime Minister doesn’t know the difference either, so you are in good company.

#162 Proud Claustrophobe on 12.21.17 at 11:19 am

I will always be a proud bigot. Now, if you’ll excuse me I will take my adopted multicultural children to school.

#163 n1tro on 12.21.17 at 11:25 am

#156 Bhad Bhabie on 12.21.17 at 10:50 am
#147 Red State on 12.21.17 at 9:51 am
… CRA now auditing people who “make too much money” aka profits in their TFsA’s …

Taxing professional day traders who operate within the TFSA is completely understandable. The CRA is correct to tax this as business income. It corrupts the intent of the shelter. Suck it up. – Garth

*******

Garth is completely correct here, skirting the intent of the rules is tax avoidance, and is illegal. What I don’t understand is how such tax avoidance rules don’t apply to people who actually operate a real small business. Anybody with a pulse?
————————————
Tax avoidance ISN’T illegal. It is used by smart people all the time. Ask Trudeau and Morneau and their use of numbered companies for their “small businesses”. Stop swallowing the propaganda that Trudeau has been feeding you and think for yourself a bit.

Tax evasion on the other hand is illegal but doesn’t apply in the case of people growing their TFSA to a million dollars.

What professional traders are doing by growing their TFSA account is not in the “spirit” of the TFSA but who gives a shit when the majority of Canadians are collecting less than 1% in a savings account at the bank!? The TFSA and the rules were poorly written thus the opportunities.

#164 Guy in Calgary on 12.21.17 at 11:30 am

#55 TFSA trading on 12.20.17 at 7:29 pm
Guy in Calgary says:

“Tax free… depending on how often you trade in the account of course.”

I trade all the time in the (TFSA) account. Why would that be a problem?

Day trading is considered business income.

#165 IHCTD9 on 12.21.17 at 11:38 am

#145 Where’s The Money Guido? on 12.21.17 at 9:30 am
Here is a small list of the Liberal government spending during Justin Trudeaus time in office as our “leader” , the list grows daily , there are many I have missed
_____________________________________

This is precisely what us dumb Canadians want. Look at his current polling numbers. There are two here where I work that openly bashed Harper and voted for Trudeau. Now, they literally run out of the room when talk turns to politics. These two are your quintessential ultra-stupid dingbat balloon head Canadian voters.

Voting the Cons in might slow down the Billons of Canadian dollars flowing to evil dictatorships, but it won’t solve our being broke, not having enough revenues, and need to raise taxes in any way shape or form. You can just forget about voting someone in that can run a solvent cash-flow neutral organization – FORGET IT.

I’ve fished using live bait having more brain power than our entire Federal Liberal Caucus combined. If you don’t want to support this idiocracy – voting against them won’t be enough. You’ll need to step up and eliminate your financial support as much as you can.

Admitting the truth is important: Canadians are dumb as dirt, haven’t got a clue about money, forgot what the word priority means. We are a quixotic collection of utter dumbasses, and we’re heading for big trouble, huge taxes, and a decade or two of austerity. In that order.

We used to be smart, I used to be a quietly proud Canadian. Don’t know what happened, but the smartness has evidently exited stage left. Now we’ve got dunce cap wearing SJW ideologues running the show. With a majority.

One plan to rule them all: don’t ever pay them a dime more in taxes/fees than you absolutely have to.

#166 kommykim on 12.21.17 at 11:57 am

#51 Mordko on 12.20.17 at 7:19 pm
Garth, you misunderstand TFSA attribution rules. Here: http://www.advisor.ca/tax/tax-news/navigate-tfsa-attribution-rules-238420
Nope. – Garth

Mordko,
Did you even read the link you posted? It confirms what Garth has been saying….

#167 The Technical Analyst, CSTA, CPD on 12.21.17 at 11:58 am

I’m very thankful to the TFSA, long live the TFSA… but can we make it an election platform to get it back to $10k+/year?

Everyone, regardless of income can use a TFSA with maximum benefit, RRSP on the other hand, the richer you are, the more you benefit. Both are great though really.

For us, our TFSAs are up 19.3% YTD. (MAW202, MAW250, ATB211)

#168 Smartalox on 12.21.17 at 12:08 pm

Flopper:

Pursuant to an earlier post, about how the ‘pink snow’ posts you’ve made show Vancouver Westside houses selling for 15% or more BELOW ASSESSED values.

BC Assessment Warns 67 000 Homeowners of Big Increases:
http://www.cbc.ca/news/canada/british-columbia/b-c-assessment-warns-67-000-homeowners-of-big-increases-1.4459410

From the article (annotated):
B.C. Assessment issued 25,000 warnings in the Vancouver area, with another 18,000 landing in Surrey.
Strata assessments are expected to rise within the ten to 30 per cent range across Metro Vancouver, Fraser Valley, Vancouver Island and the Okanagan.

If ‘Pink’ properties aren’t selling at 15% below the 2017 assessments, how much steeper will the discount have to be to sell a property when the 2018 assessment is 10% to 30% higher?

Example: a property assessed at $2 000 000 in 2017 might sell for a 15% discount off the assessed value, or $1 700 000.
But if that property’s assessed value goes up 15% in 2018, to $2 300 000, the ‘market price’ of that property is still $1 700 000.
What was a 15% haircut compared to the 2017 assessment will now be a 26% discount off the 2018 assessment value.

Ouch! That’s not so much a haircut as a scalping!

The new valuations, which are used to determine 2018 property taxes, were taken based on market values around July 1, 2017.

This is why BC Assessment is a notoriously poor indicator. It’s already six months out of date! Sure people open their assessments and think that they’ve won the HELOC lottery, but without honest representation of true market conditions, they have no idea that they may already be under water.

While many home owners should be happy to see the value of their investment increasing, says Davidoff, “the bad news is your property taxes also rise.”

Davidoff says tax increases aren’t directly correlated to increases in your property assessment; however, property owners whose assessments have risen at a higher rate than the provincial average can expect an overall increase in their property taxes.

And don’t forget that 0.40 percentage point bump tacked on by Vision Vancouver councillors at the last minute, last week! And then, last but not least:

Homeowners who disagree with the new assessment of their homes are encouraged to appeal the valuation.

“Only file a case if it has merit. Don’t file a case if you’re ticked off about your property tax bill,” said Paul Sullivan, a property tax agent with Burgess Cawley Sullivan & Associates Ltd.

“If you can dispute value with evidence, go for it. If not, don’t waste people’s time.”

#169 Walt Disney on 12.21.17 at 12:09 pm

Folks, I have some good and some bad news.

We finally replaced the Eskimos at the Canadian Exhibit at the Epcot.

Here is today’s replacement:

http://geekpic.net/pm-I600Q7.html

…. Forgive them, they know not what they do.

#170 LivinLarge on 12.21.17 at 12:19 pm

JWK, correction.

I went back and plugged the stated scenario into the compound interest calculator at Moneychimp and I have to correct my last post.

Starting with $52,000 and adding an additonal $5,200 per year and compounding at 8% does indeed not deliver the sum Fearless Leader stated for the 40 something example. To reach the $1.2ish million figure the compounding rate needs to average about 10.1% not 14%

However, there is the unknown component of the regular proscribed annual inflationary increase to the TFSA contribution limit that T2 implimented when reverting the contribution limit to the preelection limit so, there is an annual ajdustment to the annual addition that is too complex to plug into a simple compounding calculator. Depending on the CPI over the intervening 25 years, much of that difference between 8% and 10.1% yield can be accomdated automatically.

So, “Ol’ Helmet Head” doubled the contribution limit one year and T2 brought it back to its previous level the following year and added a proscribed increase formulae for the future.

Actually a TFSA-maxed-out couple at 40, continuing to max and receiving an average of 8% would have over $1.5 million at 65. — Garth

#171 Fake News Again on 12.21.17 at 12:29 pm

#145 Where’s The Money Guido? on 12.21.17 at 9:30 am
Here is a small list of the Liberal government spending during Justin Trudeaus time in office as our “leader” , the list grows daily , there are many I have missed . This information is readily available over the internet to those who are willing to do a small amount of research.

________

the fact that the FAKE NEWS never ever talks about this proves beyond a doubt…..they are in bed with the Govt.

#172 Bhad Bhabie on 12.21.17 at 12:31 pm

#163 n1tro on 12.21.17 at 11:25 am
#156 Bhad Bhabie on 12.21.17 at 10:50 am
#147 Red State on 12.21.17 at 9:51 am
… CRA now auditing people who “make too much money” aka profits in their TFsA’s …

The CRA is correct to tax this as business incoIt corrupts the intent of the shelter. Suck it up. – Garth

skirting the intent of the rules is tax avoidance, and is illegal – BB

Tax avoidance ISN’T illegal. It is used by smart people all the time. – TNT

***************

Writin on the wall
letters kinda small
whoda fool now

check it:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/ic88-2/general-anti-avoidance-rule-section-245-income-tax-act.html

(dat be a hi-coup (wink)

#173 Proud Claustrophobe on 12.21.17 at 12:40 pm

Hey Garth the CEO of Juwai agrees with you “In a statement issued Wednesday, Carrie Law, CEO of Juwai.com, asserted that foreign buyers are “just a straw man for a country that refuses to recognize that cheap credit for local investors is the real reason prices are rising.” No vested interest here…lol

#174 Midnights on 12.21.17 at 12:44 pm

I do not have a tfsa, at least I don’t think so. I would like a tfsa. I ‘heard’ that you get one from a bank. So I went to the bank, booked a meeting with one of the big 2, and met with nice agent. I explained I wanted a tfsa. She asked ‘managed’ or self directed?…

https://youtu.be/qy8gqpO1Rrk

Plus just open a TFSA in your investment account NOT YOUR BANK ACCOUNT‼️ Because this will allow you to allocate stock etc. Through your bank account you are limited to what u can do.

#175 joblo on 12.21.17 at 12:47 pm

#165 IHCTD9 on 12.21.17 at 11:38 am

Word!

#176 James on 12.21.17 at 12:49 pm

#152 Smoking Man on 12.21.17 at 10:24 am

The Truth is out now. I give you a Nictonite plasma flyer with stealth mode deactivated .

https://youtu.be/3w0aXTfDDq8
………………………………………………………………….
That’s it Smoking Man, your Plasma flyer looks like a Toyota Echo that’s been filled with deplorables.
Get a new car! Jesus I thought you were an illegal alien.

#177 James on 12.21.17 at 12:54 pm

#73 For those about to flop… on 12.20.17 at 8:11 pm

For our American cousins…

M43BC

“American Consumption Greatly Varies by State. See Where the Biggest Spenders Live.

Consumer spending is the engine that powers the American economy, accounting for about 70 percent of all activity. An uptick as small as 0.3% can cause the Federal Reserve to reevaluate its plan on raising interest rates. Since looking at these numbers in aggregate can tell you a lot about the economy’s direction, we thought we’d break down personal consumption at the state level. This reveals an interesting snapshot about the economy.

The Bureau of Economic Analysis— part of the U.S. Department of Commerce—published new numbers in October 2017 tabulating how personal consumption has changed year-over-year. This includes things as wide ranging as housing and utilities, health care expenses, and eating at restaurants. We color-coded each state based on how expensive it is there—green states are comparatively cheaper, and red states are more expensive. This approach gives you a good idea not only how much things cost, but also a thing or two about the economy at the state level.

There are a few obvious trends when you map the data for each state. First off, there’s a cluster of pink and red states grouped in the Northeast. The most expensive place on our map is Washington, DC ($56,843), followed by Massachusetts ($51,981). As a matter of fact, six of the top ten most expensive places are in the Northeast. It’s cliché that housing is expensive in New York, but there are a lot of other expensive states in the region too.

There’s also a collection green states across the Deep South to the Southwest, stretching all the way from North Carolina ($33,779) to Nevada ($36,177) and even up to Oregon ($39,742). The cheapest place is Mississippi, where it costs only $30,200 to pay for life’s most common expenses. Florida is the only state in the Deep South where it costs more than $37k. Keep in mind, Florida’s warm winter climate makes it a prime candidate for migration, which increases personal consumption..

There are a few other fascinating stories that you can infer based on our map. Take a look at Alaska ($49,547), the third most expensive state. There’s no doubt Alaska’s location far away from the contiguous United States plays a large part in driving up housing and health care costs, but who knew it costs more to live in the Last Frontier than New Jersey? Another standout is North Dakota, the seventh most expensive state in the country. It’s no coincidence that both Alaska and North Dakota have enormous oil wealth, which only puts upward pressure on prices. In fact, oil extraction in Alaska is only going to grow in the New Year.

Here’s another interesting trend. This map is a close approximation of the results for the 2016 election. East of the Mississippi River, every expensive state voted for Hillary Clinton, and every inexpensive state went for Donald Trump. The situation is a little convoluted out West, but it’s remarkable how the political divide mirrors an economic reality.

Top 10 Places Where Americans Spend the Most
1. Washington, DC: $56,843

2. Massachusetts: $51,981

3. Alaska: $49,547

4. New Jersey: $48,972

5. New Hampshire: $48,810

6. Connecticut: $48,497

7. North Dakota: $48,225

8. Vermont: $47,648

9. New York: $46,906

10. Hawaii: $45,123

The big takeaway from all this is that no matter where you live, you need a decent amount of money to make ends meet. Exactly how much depends on where you live, but you need more than $40,000 in 28 states, and more than $50,000 for two (if you count Washington, DC).”

https://howmuch.net/articles/how-much-money-americans-spend
…………………………………………………………………
New York is where it is at. Who wants to live in DC?

#178 The Narrative on 12.21.17 at 12:57 pm

I think the realtor at the end of this video hits the nail on the head!

It is the narrative of “Chinese buyers” that allows locals to speculate.

It is a speculation problem, and that speculation is overwhelmingly local, with some foreigners mixed in.

Even if the 5% figure is under-reported, and it is actually 10% then still, it is mainly locals.

Just like Garth has claimed from day 1.

https://globalnews.ca/news/3928698/foreign-buyers-not-the-problem-in-canada-says-ceo-of-chinese-overseas-real-estate-portal/

That said, no matter what gets reported, the (wo)man-in-the-street doesn’t buy it and keeps the Chinese investment narrative alive, and thus keeping the speculation alive.

Oh well.

#179 James on 12.21.17 at 1:01 pm

Jared Kushner appears to a be as much of a criminal as his father was. The apple sure doesn’t fall far from the tree. No wonder he hated Christie. Is everyone connected to Trump a seething criminal? In the summer of 2004, Charles Kushner was fined $508,900 by the Federal Election Commission for contributing to Democratic political campaigns in the names of his partnerships when he lacked authorization to do so. In 2005, following an investigation by the U.S. Attorney’s Office for the District of New Jersey, U.S. Attorney Chris Christie negotiated a plea agreement with Kushner, under which he pleaded guilty to 18 counts of illegal campaign contributions, tax evasion, and witness tampering. The witness-tampering charge arose from Kushner’s act of retaliation against William Schulder, his sister Esther’s husband, who was cooperating with federal investigators; Kushner hired a prostitute to seduce his brother-in-law, arranged to record an encounter between the two, and had the tape sent to his sister. Kushner was sentenced to two years in prison, and served 14 months at Federal Prison Camp, Montgomery in Alabama before being sent to a halfway house in Newark, New Jersey, to complete his sentence. He was released from prison on August 25, 2006.
As a result of his convictions, Kushner was disbarred, prohibited from practicing law in New Jersey, New York, and Pennsylvania.

http://www.newsweek.com/jared-kushner-deserves-be-investigated-his-involvement-russia-meetings-chris-753283

https://www.vanityfair.com/news/2017/12/jared-kushners-business-empire-is-a-house-of-cards

#180 AGuyInVancouver on 12.21.17 at 1:02 pm

#159 Victor V on 12.21.17 at 10:56 am
https://www.bnn.ca/loonie-hits-weekly-high-as-inflation-retail-sales-raise-rate-hike-hopes-1.950001

The Canadian dollar hit its strongest level against its U.S. counterpart in a week on Thursday, boosted by strong inflation and retail sales data that raised expectations the Bank of Canada could hike rates again as soon as January.
_ _ _
As usual, Poloz the Ditherer stayed too long at the low interest party. He should have raised rates this month.

#181 RyYYZ on 12.21.17 at 1:31 pm

Congrats, Garth, on managing to mention the TFSA without mentioning its short term increase to $10k/yr and then back under the new government.

And thanks for helping to get it started. I wish it allowed twice the amount in contributions, and I wish it had been around 20-30 years ago. I would probably still have my RRSP maxed out, but also the TFSA.

#182 Ole Doberman on 12.21.17 at 1:37 pm

I think it’s all over for bitcoin finally, high mid 19k
now mid 15k
thats the largest pull back, likely Wallstreet attacks.
But honestly I think it was all concocted by Wallstreet.

Just like the .coms and fake analysis.

#183 IHCTD9 on 12.21.17 at 1:39 pm

#154 LivinLarge on 12.21.17 at 10:41 am

…The moral of this little rant is that the screwings we take that are simply burried into the arcane changes to the Tax Act are far more onerous than the ones the governments tell us are coming.
______________________________________

IMHO, no need to worry about the details, you only need to be correct with your assertion that taxes will be going up. Anyone with half a brain can see they will be, and are – even without a moron like Trudeau running the show – they’d still be going up.

A good place to hang your hat is with this guy: Joseph Tainter. He theorizes that as societies grow, they solve their problems with what amounts to complexity. All increases in complexity come with a cost in the form of resources, and wealth. As long as the resources and wealth inputs into the society are greater than the costs of the added complexity, the society moves forward. At some point though, the cost of the society’s problem solving efforts becomes equal to the wealth and resources available. At this point, the society no longer moves forward, but rather stalls, then declines – even as costs continue to rise.

Sound familiar?

Here in Canada we’re expending resources on alt-gender theories and wonder how many types of public washrooms need to be built. We blow millions to indicate we’re sorry about certain things to certain individuals and groups. We borrow Billions and do jack with it. Climate change is sexist, better spend a Billion on making sure the Women don’t suffer more than the Men. Things aren’t very fair – Billions more into the furnace.

Hell yeah – taxes are going up. How they do matters little as I assume they will be made as hard to avoid as possible. The fact that this tax grab you’re highlighting is on income is exactly what I expect to see much more of. More taxes on things you can’t say no to, and can’t avoid.

#184 Gregg in Victoria on 12.21.17 at 1:40 pm

Merry Christmas, Garth. In your two TFSA examples (1.26 M giving off $90,000 and $576,338 giving $40k income) you are using a ~7% withdrawal rate. Is this what you advise? I’m using 4% or less to fund a 30 year retirement. This would make a huge difference in when I retire (planning on 2 years from now at 59)

Maybe I am I richer than I think!

#185 Richard Thorncroft on 12.21.17 at 1:46 pm

169 Walt Disney on 12.21.17 at 12:09 pm
http://geekpic.net/pm-I600Q7.html
———
Walt, is that image in the public domain? I need a cover picture for a new artist’s album called “Van City Xmas”. I think I could just add the rain with photoshop. Have your peeps call mine .

Yours, Rich

#186 Where's The Money Guido? on 12.21.17 at 1:49 pm

Re: #145 Where’s The Money Guido? on 12.21.17 at 9:30 am
Forgot to ad I copied this from a reader who commented in one of the Vancouver papers. Sorry…. Kudos to him…!!!

#187 RyYYZ on 12.21.17 at 1:58 pm

#12 Rexx Rock on 12.20.17 at 6:15 pm

Funny, my Questrade account, which I started funding in May using the 60/40 Canadian Couch Potato model portfolio, is up $2,500 on the $66,000 total I gradually fed in since then. Since much of the money hasn’t been in there the full term, it’s difficult to say, but I’d guestimate around a 7% annualized return.
====================================
Same here. I’m far from being any sort of investing expert, but the money (TFSA and RRSP) I put in CIBC self-directed accounts and filled with ETFs based on a modified Couch Potato strategy, is up 19% (for the RRSP money which I managed to drop in right at a high point two years ago) to 23% for the TFSA money which has been in slightly longer (just over 2 years).

#188 down_boy on 12.21.17 at 2:10 pm

#125 reply to #118 down_boy on 12.21.17 at 12:08 am

Thank you.

#189 alex stanford on 12.21.17 at 2:32 pm

Another price fixing scandal, in the grocery business:

https://ca.finance.yahoo.com/news/price-fixing-cases-apos-common-090004275.html

add that to gas price fixing, banking cartel, cell phones and communications cartels etc.

cartels and oligopolies everywhere.

Guess what will be the chance of wild bill and T2 going after their corporate buddies from Bay street or after the offshore wealthy tax cheats?

Exactly zero chance.
Instead they will spend billions on subsidizing CRA to fine small Business for peanuts / to the tune of 0.1 $ questionable refund on the money spent for investigation.

The ministry of fairness.

The last similar structure was the Goebbels’s ministry of truth.
We know how that ended.

#190 Where's The Money Guido? on 12.21.17 at 2:33 pm

Re: Clinton Foundation moved all that money donated (over $1 billion) to Switzerland just before the last US election! Poof, gone and nary a home built in Haiti….
Hehe, I watched Conan last night and he had Mr. Bill on and he was saying the Clinton Foundation is now getting involved in the fight against the opioid plague that is killing so many in the US.
That’s a hoot because he was one of the persons responsible for bringing cocaine into the US through the Mena Arkansas airport when he was governor. They then sent the coke to LA so the LA cops could disperse it to the gangs.
https://www.counterpunch.org/2016/03/11/clintons-contras-and-cocaine/
https://www.counterpunch.org/2016/11/04/air-cocaine-the-wild-true-story-of-drug-running-arms-smuggling-and-contras-at-a-small-airstrip-in-clintons-arkansas/

http://www.ibrattleboro.com/sections/politics/kill-messenger-2014-film-mena-arkansas-and-crack-cocaine-epidemic-according-journa#comment-12867 :
This one is very good as it explains reporter Gary Webb who broke the coke conspiracy and committed “suicide” with 2 gunshots to the back of his head, and Michael Ruppert a former LA cop who said the LAPD were the biggest drug traffickers in the US. I saw Michael speak live at Simon Fraser University in downtown Vancouver a couple years before he “committed suicide” in 2014. He said at that event that there was a hit on him and he didn’t expect to live long, that’s why he was doing the tour of universities in North America.
https://www.theverge.com/2014/7/22/5881501/the-unbelievable-life-and-death-of-michael-c-ruppert

#191 yycnotretired on 12.21.17 at 2:47 pm

Can we talk about why it took the ethics commissioner A FULL YEAR to decide Trudumb broke the rules? Like, how much are you getting done in a day.

#192 alex stanford on 12.21.17 at 2:54 pm

PM acknowledges breaking ethical rules

https://www.youtube.com/watch?v=lI656yvQWIY

and takes full responsibility which is …none.

One set of rules for the elite, another one, including price fixing by oligopolies – for us.

#193 BillyBob on 12.21.17 at 2:56 pm

I can attest to the power of tax-free. 100% of my employment and (other than minimal jurisdictional withholding tax), investment income as well. All I had to do was end my residency in Canada. But hey, I’m a Canadian since I have a passport! It’s sure nice reaping the benefits of being Canadian without actually contributing anything to Canada. And if you have a problem with that, you’re a bigot. ;-)

*(Tongue firmly in cheek if the winky smiley isn’t obvious enough).

#194 jess on 12.21.17 at 3:07 pm

#179 James on 12.21.17 at 1:01 pm ”

Amsterdam trade bank -ATB was also among numerous banks accused of funnelling some US$20.8bn out of Russia between 2010 and 2014. The laundered money went to banks in Moldova and Latvia and from there was spread into 96 countries across the world. The Organised Crime and Corruption Reporting Project (OCCRP), which unearthed the scheme in 2014, dubbed it “the Russian laundromat”.

https://www.occrp.org/en/laundromat/senior-moldovan-judges-daughter-lived-in-posh-london-flat

..”in the Panama Papers leak last year, journalists have established how, in the last days of Yanukovych’s rule, about US$ 19 million in state funds were diverted from a large Ukrainian bank that belonged to a friend of the president’s younger son. A portion of the funds ended up in offshore companies connected to the bank’s owner. A further $38 million disappeared from a correspondent account held by the same bank in Austria.”

https://www.occrp.org/en/28-ccwatch/cc-watch-indepth/7373-as-yanukovych-fell-regime-connected-bank-sent-millions-offshore

#195 jess on 12.21.17 at 3:09 pm

Money from Ghost Companies

Senior Moldovan Judge’s Daughter Lived In Posh London Flat — With Tainted Money
https://www.occrp.org/en/laundromat/senior-moldovan-judges-daughter-lived-in-posh-london-flat

#196 Joe2.0 on 12.21.17 at 3:25 pm

Someone sent me this.
I thought it was worth sharing with the Greater Fools.
Since the general theme is numbers and politics.

A interesting case for why it was once openly called Christmas.

Even if you decide to delete it for its very uncomfortable material, I hope you give it a read.
Merry Christmas.

http://christinprophecy.org/articles/applying-the-science-of-probability-to-the-scriptures/

#197 Greg Franklin on 12.21.17 at 3:43 pm

Strip bonds are #1.

Not in an era of historically low rates. — Garth

#198 alex stanford on 12.21.17 at 3:50 pm

#193 BillyBob on 12.21.17 at 2:56 pm

There are no benefits of being Canadian if you live abroad and are paid by foreigners.

1. Foreign taxes are usually far less and simple and much easier to manage
2. Foreigners pay more than Canadians – Europe, US etc.

#199 LivinLarge on 12.21.17 at 3:54 pm

Thank you Fearless Leaderm for much over the year but specifically for correcting me about the example being a couple I should have seen that in your original post.

Gregg, “In your two TFSA examples (1.26 M giving off $90,000 and $576,338 giving $40k income) you are using a ~7% withdrawal rate.” I suspect (but I’ve already made my share of errors today) that if you are earning 7% then withdrawing 7% PA should leave you as sound as the £ with no reduction of your paid in capital. Just adjusting your withdrawl to your real need each year or half year should give you total security and allow some comfort zone for the years you may not actually have a 7% return.

I look at my expenses twice a year to evaluate whether I need more or less to maintain my desired lifestyle and then pour any annual savings back into my portfolio. In 3 years I have never needed more than I withdraw and have always had savings to roll back in.

#200 maxx on 12.21.17 at 4:20 pm

RSP – check; resulting tax Credit to TFSA – check; excess to non-registered investments – check.
Rinse and repeat.

#201 Greg Franklin on 12.21.17 at 4:26 pm

Strip bonds I purchased back in 2000 have made me 350% total interest, capital gain return in 17 years which is a 20.58% per annum rate of return.

My original $350,000 back in 2000 is now worth $1,575,000 today. This puppy was the best investment I ever had.

That was 17 years ago before rates plunged. No such conditions now exist. Too bad your gains are 100% taxable. Bummer. – Garth

#202 jess on 12.21.17 at 4:37 pm

“In Sun Life’s settlement agreement with the Mutual Fund Dealers Association, the company admits to not having adequate checks and supervision, leading to various practices such as selling mutual funds with back-end fees that, if redeemed early, did not factor in their clients’ age or time horizon, as far back as 2002.

The company also admitted to failing to report client complaints, bankruptcy and other key information to MFDA’s tracking system within the required time frame, between January 2010 and June 2015.

https://www.therecord.com/news-story/8020391-sun-life-to-pay-1-7m-fine-under-mfda-settlement/

This comes as the Ontario Securities Commission also approved a no-contest settlement agreement with Assante Capital Management Ltd and Assante Financial Management Ltd., resulting in compensation to clients of more than $3.8 million and more than US$15,400.
http://www.osc.gov.on.ca/en/NewsEvents_nr_20171221_osc-approves-no-contest-settlement.htm

#203 Eyestrain on 12.21.17 at 4:37 pm

#196 Joe2.0 on 12.21.17 at 3:25 pm

O.M.G.

Garth, is your hit counter hitting the sump pump again?

#204 Joe2.0 on 12.21.17 at 5:02 pm

#203 Eyestrain
I know it’s s touchy subject.
I was impressed by the scientific approach.

#205 Tony on 12.21.17 at 5:06 pm

Re: #18 BlogDog123 on 12.20.17 at 6:26 pm

Last I looked Tangerine was paying 1.1 percent on a savings account.

#206 Blacksheep on 12.21.17 at 5:08 pm

Good job Greg # 201,

“That was 17 years ago before rates plunged. No such conditions now exist. Too bad your gains are 100% taxable. Bummer. – Garth”
—————————–
Dude did good in my books.

No need to piss on his parade, Garth.

Where did I give anything but a factual response? Repeating that experience is impossible. – Garth

#207 Tony on 12.21.17 at 5:10 pm

Re: #24 Marc on 12.20.17 at 6:33 pm

As long as low interest rates are in place the TFSA is safe. Only if interest rise and people actually start to save is the TFSA at risk.

Wrong. The TFSA will remain untaxed. – Garth

#208 Tony on 12.21.17 at 5:21 pm

Re: #207 Tony on 12.21.17 at 5:10 pm

I meant at risk of being abolished forever.

Not gonna happen. – Garth

#209 Newcomer on 12.21.17 at 5:38 pm

A lot of people think the TFSA will be taken away if people start to save a lot on taxes. Have they not noticed that the capital gains exemption on houses has cost the taxman countless billions, and yet it is left in place. If they don’t take that away, why should they take the TFSA away?

#210 LivinLarge on 12.22.17 at 7:16 am

“If they don’t take that away, why should they take the TFSA away?”…well, when you use “why should” this becomes a philosophical question that’s unanswerable.

Had you asked “why would” then it opens an historical question that can be answered.

The tax free status of principal residence is an example of a philosophy at work and as we sit today the dominos are falling into place for a sea change in that philosophy. Until the current bubble in RE the governments all wanted Canadians to own homes when ever possible. Since we are taxed on “things” so heavily governments have always wanted us to have high value things they can tax easily and for which fashion won’t change suddenly and thus slash tax revenues.

We Canadians had a lifetime capital gains tax deduction when houses were appreciating around the inflation rate but that too was abolished when the government du jour realized that they needed another relatively easy tax source. Cap gains are earnings so taxing that income is at least a tad egalitarian.

So, there is the capital gains example that may very well be the guiding light to an eventual taxing of principal residence capital gains taxation.

Out Social Democratic Canadian culture requires constant new tax revenues just to remain static. Inflation alone dictates a couple of percentage points of new tax revenue each year unless the government cuts their expenses by cutting service levels but alas cutting service levels appreciably usually will result in regime change.

With our aging demographics AND significantly increased longevity, the cost to governments to provide the services that the aging demographic demand for their vote means that at some point, sooner rathen later, some Federal regime will decide that building retirement wealth via home equity is no longer desirable from a tax base outlook and that capital gains exemption will begin to be eroded.

I previously mentioned the recent dramatic change to the tax on Trust income from trusts that came in to effect Jan 2016, and that boys and girls, is the best evidence I know of to demonstrate how governments have and will continue to look to systemically change the tax base in order to fund growing social services costs.

Will a government in my lifetime or your lifetime decide to systemically change the tax structure of TFSAs? I have no crystal ball but history had shown me that there is no sacred cow a government won’t tax when they feel the need out weighs the reelection risk.

I have also mentioned many times before that RRSPs are simply a deferred taxation scheme by the feds dressed up as a retirement savings myth and for this reason RRSPs will likely be the last revenue stream to be messed with. The Feds know they make significantly more tax in 20 or so years from RRSP withdrawals than if they don’t encourage RRSPs and there are 10s of thousands of jobs dependent upon RRSP sales and admin so there is a huge inherent need to keep RRSPs in the stream untouched. Not so with TFSAs. The tax has already been paid once before purchase and then no more tax revenue ever and that presents far too lucrative a taxable pot for some future regime to ignore for ever.

Imagine what would happen if there was a huge shift from RRSPs in mutual funds to ETFs? Besides the taxpayer earning significantly more income, the entire [email protected] and commissioned mutual fund flogging highschool grad system would collapse and those jobs would evaporate.

So, IMO the TFSA will systemically change when a future government finds itself with too high a proportion of elderly Canadians demanding too much in services in return for their vote.

#211 MaxtheTax on 12.22.17 at 10:31 am

Garth, Gotta love this wild ride:
“A manic upward swing led by the herd will be followed by a downturn as the emotional sentiment changes,”

the crypto coin roller coaster is plunging into the dark caverns of wonder mountain…so exciting!

#212 PorcupineBay on 12.22.17 at 3:03 pm

Thanks Garth. Merry Christmas, and Happy TFSA.