Tax Free Savings Account -Go open one!!

[Reef_Geek]

Originally Posted by kien

How does anybody on this board have money to put into a savings account?!?! What am I doin wrong?! Do I need to buy another reactor?? Run more GFo? Carbon? LED Lights? Help!

lol! That is so true. There's so many things to get and Snappy keeps posting these awesome frag pics!

Personally, I've had good success with the pay-yourself-first philosophy. That is, come up with a personal comfort level (with 20% being quite aggressive) and each paycheck, take that right off the top and put it away, don't look at it. Most people pay bills first, then look at what's left to spend, and save the rest if anything is left. Pay yourself first is the reverse. Take your piece of the pie first, sock it away. In no time you've got a big chunk.

Each person's financial situation is different. For me, I once was a poor marine biologist making peanuts, $20K car loan, but no kids/mortgage/credit card debt. I used this philosophy and came up with enough money to take 2.5 years off work and pay for my own MBA.

Originally Posted by Reef Pilot

Day trading is a lot safer..., buy and hold anything doesn't work anymore. Although lately, some days it feels like squeezing blood out of a stone. Of course, getting distracted on canreef doesn't help, when I should be watching the vix and futures more closely...

But myself, I hope they go over the cliff. I like volatile markets. Kicking the can down the road every 3 months is good, too, whether it is EU or the US.

Unfortunately, I have a full time job and can't really put the time into it. Good for you to be able to do that though. Canreef sure is distracting!

I'm still the mutual funds kind of investor as I have a long time until retirement. I think with the recent crashes in 06-09 and recent under performance in US economy, with all the EU talk... there are good index funds out there that are still undervalued compared to their pre-crash ramp up baseline (say... lower than 2004-05 prices). Japan just got a new president, and if a Japanese index fund held the right major holdings... could also be a good buy. I'm thinking some equities based mutual funds in Europe, US, and Japan. Emerging markets are good too, but have risen in value a whole lot and I wonder if it's hype or fair price...

You are right, volatility provides opportunities. I need to get better at jumping on these.

There's a few instances were individual stocks can be good buys for a lazy investor. Hindsight is 20/20 but thinking back, when Johnson and Johnson had their series of product recalls in 2010, or Toyota with their recalls in 2009-2010, or RIM when it first crashed hard.... RIM's recovered a little, and doubtful it'll get back to former glory, but back at the very bottom of it's tumble was a good buy because RIM's still going to be a niche company. Right now, I think HP could be undervalued with their recent bad news of under performance and write-offs... as well as many oil companies... the oil demand will go at least to Asia Pac via rail, pipeline or not. Their values have lowered, but let's not forget they are still consistent fortune 10 companies with huge earnings.

(the opinions described herein are provided as opinions only, without guarantees, without thorough qualified research, and without compensation to the author)

Originally Posted by Ryan

What interest rate is generally earned with a TFSA

TFSA is only a status, which you get your bank to register with the government for you. It can be used for anything as simple as a savings account, or something as complex as a stock trading account. I use it for mutual funds. Interest rate depends on what financial instrument you choose for the TFSA status. It can be a mixture of them, but total contribution is capped. $5K allowance for each of 2009, 2010, 2011, 2012, and $5.5K for 2013. Unused contribution room carries forward.

So for example if you have some investments right now in non-registered status, it would make sense to withdraw them and put them under TFSA status as you will never pay tax on any earnings... ever. So for example you put $20K in stocks under TFSA status and in 30 years it's worth $40K, you pay zero tax.

[Reef Pilot]

Originally Posted by Reef_Geek

You are right, volatility provides opportunities. I need to get better at jumping on these.

Well, tomorrow, Friday, might be your chance. Could be some good buying opportunities. Just don't catch a falling knife. Might be even lower next week.

[Reef_Geek]

Originally Posted by Reef Pilot

Well, tomorrow, Friday, might be your chance. Could be some good buying opportunities. Just don't catch a falling knife. Might be even lower next week.

because of fiscal cliff or because of the Mayan end of the world? lol!

Looks like fiscal cliff plan B ain't happening.

Yup, looking good for stocks going on sale! (fixed income funds will become over priced)

[Reef_Geek]

Looks like the markets aren't reacting to the impending midnight fiscal cliff at all. There's a few articles out this morning, but at the peak of Fri vs low of Mon (so far)... it's only been a drop of 0.97% at the widest gap for the Dow Jones industrial average. Rest of the indices have gone up.

This is disappointing. I was hoping to take a contrarian tactic here...

[Reef Pilot]

Originally Posted by Reef_Geek

Looks like the markets aren't reacting to the impending midnight fiscal cliff at all. There's a few articles out this morning, but at the peak of Fri vs low of Mon (so far)... it's only been a drop of 0.97% at the widest gap for the Dow Jones industrial average. Rest of the indices have gone up.

This is disappointing. I was hoping to take a contrarian tactic here...

They are playing the pass the hot potato game right now. The Dem controlled Senate is waiting until the last minute to give the Repub House a deal they know won't pass. Then they can blame the Repubs for going over the cliff.

Any deal passed today will be meaningless. The big negotiation will happen in the new year with the debt ceiling coming up in a couple months. Then they will be forced to do something big, one way or the other.

[Reef_Geek]

Originally Posted by Reef Pilot

They are playing the pass the hot potato game right now. The Dem controlled Senate is waiting until the last minute to give the Repub House a deal they know won't pass. Then they can blame the Repubs for going over the cliff.

Any deal passed today will be meaningless. The big negotiation will happen in the new year with the debt ceiling coming up in a couple months. Then they will be forced to do something big, one way or the other.

Good call.

[foxfishfan]

If anyone is investing in a TFSA, don't do it as the interest rate is quite low. You can also buy a tax free gic which pays 1.6% for a 15 month term, for instance. Yes, the money is locked in for 15 months but the interest is 3x that earned leaving it in the account and is all tax-free.