TFSA Questions

[adammo]

Hi all,

I haven't read too much on the TFSA yet as I maxed out my RRSP contribution this year in order to take advantage of the Home Buyer's Plan. Now that it is finished, I am trying to figure out if a TFSA is right for me.

I was reading that you can invest in stocks using a TFSA, but if I understnad correctly you can only contribute $5,000 per year? I'm guessing that most people who invest in stocks are waiting a few years using max contributions before investing in stocks? To me it would seem that you couldn't properly diversify with $5,000?

Secondly, what is the best approach with TFSAs? Are ETFs a good solution?

Thanks!

[chenwaa123]

I used mine to roll the dice, and I'm up about 115%. Not easily repeatable at this point.

[tsatsa]

Hi all,

Secondly, what is the best approach with TFSAs? Are ETFs a good solution?

Thanks!

For $5K or larger amount ETFs is the way to go.

[bubble.tea]

what's an etf?

what's the best TFSA currently?

[dmitri81]

TFSA is just that, a savings account. You could stock pile cash in a TFSA until you get up to a nice balance or yes ETFS. Personally I put the full $5k into 1 seriously beaten down stock in March and that has done very well for me. But when you concentrate like that in 1 stock, the risk is higher. So if you can stomach rolling the dice on one stock and if you go bust on 5 grand and still can eat, that would have the highest reward.

[dmitri81]

what's an etf?

what's the best TFSA currently?

An ETF is an "Exchange Traded Fund" Its a basket of stocks that trade under one stock. A good way to diversify a small sum of money. Some people refer to it as an exchange traded mutual fund.

Best TFSA is ING direct offering 3% but I don't know for how long. Sounds like a promo rate.

[ray420]

Hi all,

I haven't read too much on the TFSA yet as I maxed out my RRSP contribution this year in order to take advantage of the Home Buyer's Plan. Now that it is finished, I am trying to figure out if a TFSA is right for me.

I was reading that you can invest in stocks using a TFSA, but if I understnad correctly you can only contribute $5,000 per year? I'm guessing that most people who invest in stocks are waiting a few years using max contributions before investing in stocks? To me it would seem that you couldn't properly diversify with $5,000?

Secondly, what is the best approach with TFSAs? Are ETFs a good solution?

Thanks!

TFSA has a huge potential over the long term, $5000 right now is not a lot but over the years it can be hugee!

You are right in terms of not enough diversification with $5000, but if you buy strong bluechip dividend payers over the longterm you can build a large tax free cashflow.....

Second. You can use it to buy ETFs which would be great for this

Here is TFSA FAQ (http://financialhighway.com/tax-free-savings-account-tfsa-faq/)

Basics on ETF's- What are ETFs? (http://financialhighway.com/understanding-etf-what-is-an-etf-and-how-does-it-work/)

[adammo]

Thanks everyone :)

[bubble.tea]

...if you buy strong bluechip dividend payers over the longterm you can build a large tax free cashflow.......

what does this mean please? ENGRISH!!!? :lol:

[g9chan]

Don't you want to hold Canadian dividend-paying stocks outside your TFSA?

[clock]

For $5K or larger amount ETFs is the way to go.
Yea...op should put all his money into FAZ or FAS and let it sit there and grow :twisted:

j/k.

If you want something safe, and worry-free, just buy 2-3 low risks, large cap stock such as banks, telecom (bell/rogers), wal-mart...etc
many ETF has problem with deteriorating value over time, so you need to know which one you pick.

[ray420]

what does this mean please? ENGRISH!!!? :lol:

If you buy dividend paying stocks you will receive the dividends tax free over the long term (20 years or so) you can have a tax free cashflow. You'll be paid regular dividends and you will not have to pay taxes on them

[ray420]

Don't you want to hold Canadian dividend-paying stocks outside your TFSA?

Yea you could do that to take advantage of the dividend tax credit, but only if your registered accounts are maxed out. What's the point of holding your Canadian dividend payers outside the TFSA and have nothing in the TFSA? If you keep bonds in your TFSA than hold the stocks outside.

[bubble.tea]

If you buy dividend paying stocks you will receive the dividends tax free over the long term (20 years or so) you can have a tax free cashflow. You'll be paid regular dividends and you will not have to pay taxes on them

Sounds, stupendously lucrative....easier said than done? In the end., these are stocks...and there's always a risk the stock can go bellyup eh?

[Cough]

My $5000 TFSA since I opened it:

Account Cash Securities Equity
TFSA $159.05 $5,972.00 $6,131.05

Don't wait to invest !

[ray420]

Sounds, stupendously lucrative....easier said than done? In the end., these are stocks...and there's always a risk the stock can go bellyup eh?

There is always some risk involved with any investing even if you dnt invest you are losing money due to inflation. The investment industry makes things seem harder than it really is, you can always opt to purchase dividend paying ets instead of individual stocks to make things easier for yourself.

here are 10 Tips for successful investing (http://financialhighway.com/successful-investing-10-tips-for-successful-investing/)