Weekend Reading – $800,000 or more in your TFSA

Weekend Reading – $800,000 or more in your TFSA

Hi Readers and Friends, 

Welcome to a new Weekend Reading edition, how one investor has demonstrated you might be able to amass a whopping $800,000 or more inside your TFSA.

First up, a few recent reads and reminders:

Last weekend I wondered if selling in May (and going away) was a decent seasonal investment approach?

Weekend Reading – Does Sell in May work?

A few years ago, I gave bonds no love. This week, I revisited that older post as part of my ongoing Then and Now series and revisited the need for bonds in my own portfolio.

Weekend Reading – $800,000 or more in your TFSA

Before this week’s headline and commentary on that, I wanted to write a few brief words about one of our furry friends in our house, our cat, Martin, who we lost this week. He passed away suddenly due to heart failure. 

While unexpected, he was an older cat that had a great life with us…

With some tears flowing as I write these words, I simply wanted to say that for many of us, pets are family.

Martin, we loved you and you’ll always have a special place in our lives and hearts. We are grateful for our time together…and that’s going to bring me happiness…as I get older too. 🙂

Over $800,000 invested inside the TFSA?

Believe it.

Kudos to Marcus from my hometown Ottawa who now owns a TFSA worth $883,500 according to this recent Globe and Mail article (subscription link).

Marcus “got there” after realizing he should use his TFSA for investing vs. a savings account…

“….after a few years of having the funds invested in a simple, low-paying savings account on the advice of his local bank branch, he took matters into his own hands, first using a dividend strategy, then redeploying the funds into a growth stock.”

His road to riches occurred when he moved from just TFSA savings to dividend stocks to instead purchasing Shopify, then $6, and sold in February 2021 for about $160 per share. 

Weekend Reading - $800,000 or more in your TFSA

Image source: Google.

The article goes on to say he has since sold SHOP stock and switched to owning covered call ETFs, and today, Marcus is “…generating about $11,000 in monthly income – all tax-free.”

Pretty phenomenal investing journey and certainly one that is very hard to replicate but it does prove that timing, luck and some significant risk taking can (and sometimes does lead) to tremendous wealth creation.

Of note, Marcus’s success is far from the norm and maybe you have your own evidence in your portfolio. The average TFSA account in 2023 was worth $41,510, according to this recent survey from the Bank of Montreal.

For the record, I know some DIY investors that have individual TFSAs now north of $150,000 each or approaching $300,000 per couple. This has been a more realistic journey for many DIY investors via owning a basket of global stocks or a diversified set of stocks. 

On that note, why a basket of global stocks can and does work wonders…I was only happy to participate on the panel once again for MoneySense to help name these Best ETFs in Canada for 2024. 

Best ETFs in Canada for 2024

I shared my reasoning for my “Desert-Island ETF” pick here and I actually own a bit of this fund in my LIRA for the same reasons. You can read up on my journey with my LIRA here too growing from $7k to now about $60k in value.

On a related theme, Dividend Growth Investor wrote about market timing – does it work?

The DGI conclusion:

“To summarize, investing on a regular schedule beats trying to time the markets. For as long as the investor puts money in a diversified portfolio on a regular basis, over a long period of time, it hasn’t really mattered if they bought at the top or the bottom.”

Marcus’ impressive TFSA investing journey also reminds me of this Weekend Reading edition which is a more common path to wealth creation:

Weekend Reading – Why investing is different

Dale Roberts cited a few reasons why the thrill of dividend investing might be gone, in Canada. 

Cool stuff from Visual Capitalist – a chart showing how much you’d have today if you invested $1,000 in various stock markets, including our own S&P/TSX composite index.

The Growth of a $1,000 Equity Investment, by Stock Market

At Cashflows & Portfolios, we continue to believe dividends earned are just one important side of the investing coin: capital gains/price appreciation matter too!! Marcus above is a stellar example of that with his Shopify pick focused just on growth. This means, the desire to “live off dividends” in perpetuity has drawbacks. 

Bold social media indexing advoate Jim Chong mentioned this recently, which I would agree with:

Weekend Reading - $800,000 or more in your TFSA pic 2

I would be happy/thrilled to own a $2M personal portfolio and a paid off home…and we’re getting there eventually for semi-retirement with our plan…but money is hardly everything.

We just want to be comfortable, financially, and live our lives. We never know when our time is up or drawing near. Good, prolonged health is the ultimate form of wealth. 

….so while this week has been heartbreaking and gut-wrenching losing one of our cats, Martin, I will be forever filled with joy that we rescued him and we had him in our lives for so many loving wonderful years. 

Martin, Christmas, 2023

Our friend, Martin.

Take care,

Mark

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

46 Responses to "Weekend Reading – $800,000 or more in your TFSA"

  1. RONALD S. TUTHILL · Edit

    Hi Mark: Unless you just bought BN then you should have BAM also. The company was BAM and just split off or spun out the Manager so became BN and the Manager became BAM. This was a quarter of the company and my 12187 shares gave me 3046 shares of the Manager. With a quarter of Brookfield Insurance that gave me an extra 20 shares of the Manager so that is how I ended up with 3066 shares. Yes the main company is the big dog but only pays $.08 per quarter while BAM pays $.38 per quarter. I lucked out on this one. I had Great Lakes Power and it was taken private by Brascan and I could of taken the cash or exchanged for a few less Brascan shares. Great Lakes paid $.64 and Brascan paid $1.00 so I took the shares. Brascan and then Brookfield split 3/2 3X in the next six years and then spun off all the platform companies and some of the platform companies have split 3/2 and some of the platform companies have split from partnership units to corporations so yes I feel fortunate to have lucked in and made the right decision back in ’99. Companies that grow and expand are interesting and their net worth keeps expanding making me wealthier which is okay with me.

    Reply
    1. I’ve held BIPC and BEPC for many years…BN was in fact a new purchase as of Jan. 2024 for future long-term growth that is also tax-efficient in any taxable account. So, no BAM unfortunately since I had assets in other stocks or low-cost ETFs before the BN purchase.

      Potentially, long-term I too can benefit from any stock splits?! Time will tell.

      Happy to hear your thoughts on BN, BAM, BIPC or BEPC.
      Mark

      Reply
  2. Hi Mark: A friend and I were talking in a coffee shop and he asked what stocks I had. I said do you want me to start at the first of the alphabet or the last and then I rhymed them off. He was impressed so here are some.
    21000 ENB, 12187 BN, 10000 BCE- TRP- CU each, 8000 T, 6350 TA, 3066 BAM, 2000 NA, TD, RUS, EIF each, 3600 EMA, and 3200 FTS. These are just some. All stocks pay dividends or distributions, some quarterly and some monthly. On 1 June I will get $24909.88 and over $32,000.00 for the month. I have money at home ( TD Canada Trust) that I can use to pay ordinary bills and if I have an extra large purchase or taxes then I can transfer the funds but this doesn’t happen every day so the fund accumulate and when I feel the time is right I can buy more stock and accumulate more money. I find this a nice hobby to have. I’m not too worried about the market as it can go up or down but I will still collect the dividends although up is always preferred when it goes down than I see it as an opportunity to buy more. As I said I had $400560.00 when I was laid off 32 years ago and now have over seven figures and if I need it I can get it but I don’t have to be withdrawing money all the time.

    Reply
    1. Incredible. Mind blown….

      21000 ENB (we have just over 1,000 ENB shares)
      12187 BN (ha, no even close to you!)
      10000 BCE, TRP and CU each (we have about 3% of our portfolio in BCE, about 2% in TRP and don’t own CU….prefer to own FTS, EMA, CPX)
      8000 T (we have just over 2,000 shares)
      6350 TA (none here)
      3066 BAM (WOW, we own BN the parent vs. BAM).
      2000 NA (we own a few hundred shares….same goes with TD, EMA, FTS).

      “On 1 June I will get $24909.88 and over $32,000.00 for the month.”

      My goodness, I hope to catch up over time Ronald!!!

      Have a great weekend and thanks again for sharing your success story.
      Mark

      Reply
  3. RONALD S. TUTHILL · Edit

    Hi Mark: I have been investing and investing is the optimum word since I started working at 21 which would be 55 years ago. Not much at the beginning because I never had the money and you had to buy a board lot which is 100 shares so I would buy 25 shares and the more money than more shares and soon 25 shares is not enough so you buy 50 shares. As time goes on the amount of shares increases and the price of shares helps with the amount. After all you can buy more shares at $15.00 than at $30.00. All this takes is time and the power of compounding. By the way I see that the 1000 shares of NA purchased for $10875.72 and split in 2014 today announced that they have raised the dividend to $1.10 per quarter so that means my dividend payment goes from $2120.00 to $2200.00. Not bad for a former mail boy and not hard to take at all. I always say that all gifts are greatly appreciated. As you can see I am closing in on what the original base cost was.

    Reply
    1. Awesome, Ronald….55 years of compounding can do wonders. 🙂

      It is my hope our portfolio might double in the coming 10 years but with withdrawls, unlikely, since I want to enjoy the money I’ve/we’ve invested.

      What are all the key stocks in your portfolio?
      I recall you own ENB, TD, RY, NA, BN/BAM?

      I own all those too as do most other DIY stock investors in Canada although % of each may vary of course!
      Mark

      Reply
  4. RONALD S. TUTHILL · Edit

    Hi Mark: When I got laid off 32 years ago I had roughly $400560.00 and by the 2’nd week of Sept. of 1997 I had $1000000.00. ENB has split 3X and Brookfield has split 3/2 5X. TD and NA have also split and I have lucked out on some high distribution companies like PPL and EIF. Like I say; each year these blue chip companies raise their dividends and soon you have a large portfolio of stock that seems to increase a lot each year All it takes is time. Here is a case in point. NA was bought in ’86 and ’87 at a total base cost of $10875.72. In ’14 the company split the shares and the dividend has continually increased after a small stoppage and the dividend has increased twice a year. Now I get $2120.00 and it will increase in AUG. quarterly. As you can see in a few short years I will make as much in dividends per year as what the initial base cost was so it just takes time to see your portfolio grow. Take a look at were you started and see were you are today and you will see the difference. Experts always say that when you retire you should stop saving and start living off of your savings in retirement but I say why stop saving if it worked so well for you all these years. After all you don’t need as much in retirement as when you were working and the equity you have built up will allow you to take a yearly trip and buying a car is a one shot deal as the car will last you many years so why not keep investing and earning more dividends. The longer you can do this the easier life gets financially.

    Reply
    1. Ronald, incredible.

      I often wonder if we will ever see a replication of stock splits and growth again though?

      I own ENB, BN, TD, and NA, like you (?) but ENB and TD are only just over 1,000 shares each – not 18,000 shares like you I recall. 🙂

      At this time, I own a number of CDN stocks that raise their dividends – they are the bulk of my portfolio – but I also own a growing % of low-cost ETFs that are providing gains/price growth in the portfolio too. When I compare QQQ vs. ENB over the last 5-years, it’s not even close which one has delivered more money.

      I do believe, higher dividend increases combined with sticking with my low-cost ETF plan for growth, should, deliver higher income for our lifestyle over time.

      NA provides us just over $325 every quarter. You have $2120.00 from NA so you are WAY ahead of me! I hope to catch up to you, somehow, someday.

      Mark

      Reply
  5. RONALD S. TUTHILL · Edit

    Hi Mark: Look at your own portfolio Mark and the vast majority of blue chip stocks you will find raise their dividends each year. Now imagine if most of these companies are in an unregistered account and see how the amount of this account seems to grow. Most were at home but over time have been moved to Waterhouse. Any withdrawal is temporary as the next month more is added. If I need something I will withdraw the money needed and spend it but it will soon be replenished. A case in point; I had to make an $18000.00 instalment payment in March and on # April I had to spend $21000.00 for a new hip replacement and with that I have more than recouped the costs. Last year I made $237000.00 from dividends and then there were the small pensions, interest, RRIF withdrawal and a couple of funds which show $0.00 in the sum column but new units are added to the total of all units so a tax slip is generated so all told I made around $300,000.00 and paid tax on $380,000.00. I don’t need that much but it is habit forming so no I don’t fore see the time when I will stop saving and start spending as both can be accomplished. When I need something expensive I pay for it and it is a one time thing so its not long before the stock market has paid for it and the money spent can soon be replenished so it is perpetual. When dad passed he had $908,000.00 but by the time the estate was settled it was worth $1.2 Mil. so as you can see I see no point in selling good dividend paying stocks to live and enjoy life as I can do both now.

    Reply
    1. Thanks very much, Ronald.

      That’s an incredible amount of income from your portfolio…

      “Last year I made $237000.00 from dividends and then there were the small pensions, interest, RRIF withdrawal and a couple of funds which show $0.00 in the sum column but new units are added to the total of all units so a tax slip is generated so all told I made around $300,000.00 and paid tax on $380,000.00.”

      My goodness…

      My wife and I will never get to those heights but if we can have our portfolio pay for most living expenses in the coming years, we will be thrilled and feel very, very fortunate with our saving and investing habits.

      We passed a $1M portfolio a long time ago. We have near-term dreams of semi-retirement in the coming years. I hope to share an update on that next month in fact.

      Continued success and health to you.
      Mark

      Reply
  6. I’ve maxed out my TFSA every year and am currently at $150K. I took a tiny chance on a stock that I was hoping would be like Shopify but it hasn’t worked out. The rest is in Canadian REITs and making $700-800 a month. Nothing super exciting but slow growth.

    Reply
    1. Great work overall, $150k is still good!
      I’ve learned slow and steady tends to win the race but certainly higher risk can deliver higher rewards – but that requires some timing and luck that is only realized in hindsight.
      Continued success to you.
      Mark

      Reply
  7. Hi Mark: Comparing SHOP now to then is like comparing apples to oranges. One must remember the10- 1 stock split. It came on the market at $17.00 and by the end of the first day was $28.00. Five years later in 2020 it was over $2100.00 per share. That would have been a great time to sell. The stock then dropped and they split the stock 10-1 so the price at that time was cut 10 times and is now around $80.00 so to get a real fair value you would have to multiple todays price times 10. Yes you can live off dividends for perpetuity if your dividends are large enough. Each year they increase in value and if the sum is high enough then you don’t need it all to live on so what is left will continue to increase the next year. I have been out of the workforce for 32 years and most of what I live on are dividends.

    Reply
    1. Fair point, Ronald since it’s very rare to see ongoing, high-flyer success long-term.

      You can certainly live off dividends in perpetuity but at some point I believe it makes sense to spend some of your well-earned money, your capital.

      You are a very successful investor from what I understand. Will you eventually sell any stocks to live from/enjoy the money from?

      How much dividend income does your total portfolio produce, if you don’t mind sharing?

      Continued success to you.
      Mark

      Reply
  8. Sorry for your loss Mark. We have loss several pets over the years and we won’t have another until I’m sure they will outlive us. I’m sure Martin enjoyed your love during his life time.

    Reply
  9. Lloyd (64, retired at 55) · Edit

    My take away from the Marcus story is that he sold his SHOP @ $160. That means *somebody* bought those shares @ $160. Now look at the current price of a share. Lottery ticket style returns are not something I’d tend to be counting on in an investment account. Having said that, taking a high(er) risk can pay off from time to time.

    Reply
  10. Condolences to your family.
    I had just started investing into my tsfa a few years ago and have maxed it out this year. I am currently around $123000 and generate $1400 a month. I love monthly dividends and all are in drips. I have lost a bit trying to time the market and have learned some costly mistakes.
    I enjoyed this article and will be a new subscriber.
    Thanks
    Denis

    Reply
    1. Thanks very much, Denis.

      Congrats on that progress! Our TFSAs are coming along as well = we hold XAW ETF and a mix of some Canadian stocks. So far, so good. Those accounts generate well over $12,000 per year in tax-free income and that should likely double every 10 years or so with our continued path of investing.

      I suspect your TFSA will grow handsomely in time as well!
      Mark

      Reply
  11. Hi Mark,

    I am sorry to hear about Martin’s passing. I hope the happy memories you have of Martin will bring you comfort in the days to come.

    Take good care.

    Reply
  12. So sorry to hear that Martin has moved on. I’ve learned to be almost robotic about our investments, but when it comes to loving a being of another species it will break our hearts to say goodbye. I don’t really understand it, or why we build such strong bonds. I guess it’s all part of our biological programming. I wonder if AI will feel the same about us one day.

    Reply
    1. Thanks, Bob. Been a very tough week and been a very tough goodbye but we are comforted by the fact that we had so many wonderful years with him. He holds a special place in our hearts. Always will.
      Mark

      Reply
  13. He’s getting nearly a 12% income yield in a 800+thousand TFSA? Has to be covered call ETFs or the like. I wouldn’t do that. We have a $450,000 combined TFSA producing over $30,000 income if we desire but it gets plowed back into Enbridge and BNS together with the now $14,000 yearly contribution. I fine with that – I don’t need to look over my shoulder or look at the screen that often.

    Reply
    1. Awesome, Barry.

      In our TFSAs, we have a mix of a low-cost ETF (XAW) + CDN stocks; companies like ENB, BN, CP, FTS, Telus, NA, RY, and a few others.

      My long-term goal is to continue to DRIP all those stocks inside the TFSA and then keep adding more XAW where I can…pretty much my approach since before the pandemic.

      Wow on your $450k TFSAs x2. Incredible.

      Reply
  14. Sorry to hear that you lost your furry family member. I do believe that they will be waiting for us in the afterlife. That’s what comforted me when I lost my dogs in 2015 plus knowing thatcI gave them the best life that I could.

    Reply
    1. Thanks, Marie. Things are tough but will get better…we have great memories and that fills us with joy.

      We were absolutely the best furry parents we could be for him. 🙂 *teary eyed*

      Mark

      Reply
  15. My sincere condolences on passing of Martin. Pets are indeed family members.
    I wish my TFSA a/c can grow faster and higher if I only knew which good stocks to pick!!! If you pick a few explosive stocks, you can indeed attain those high figures easily. Question is the big “if”…ha…ha.. If I had bought Nvidia stocks a few years back, I would be laughing.

    Good luck to everyone to propel their TFSA’s to new heights.
    Thanks Mark for your great posts as usual.

    Reply
    1. Thanks very much, Ken. 🙂

      Ya, woulda, coulda, shoulda for all of us if we can predict the future with investing that is.

      I echo your comments – I hope everything can take advantage of tax-free growth in their own way.
      Mark

      Reply
  16. The chart showing performance of major markets could be misleading. Some observations:
    – It is based on just 5 years. Too short a time and one that does not include the periods when the S&P500 underperformed. see chart: https://tradethatswing.com/wp-content/uploads/2024/03/SP-500-with-major-declines-as-of-April-30-2024.png.
    – Over 20 years the difference between the S&P500 and TSX would not be as great especially if changes in exchange rates that would affect us Canadians were included.
    – It seems the chart does not include dividends (3.82% for TSX vs 1.35% for S&P500). We need to look at Total Returns after dividends, exchange rates and taxes.

    Link to recent S&P500 data: https://tradethatswing.com/average-historical-stock-market-returns-for-sp-500-5-year-up-to-150-year-averages/#:~:text=The%20average%20yearly%20return%20of%20the%20S%26P%20500%20is%2011.35,including%20dividends)%20is%207.26%25.

    Reply
    1. Thanks, Graham.

      Yes, just a quick chart showing where SHOP was in 2021 for reference, but I agree, long-term trends and history matter.

      Mark

      Reply
    1. Thanks, MikeyP. Been a tough well but we have fond/great memories with Martin. Always will.

      Yes, I did see that Globe article. I will continue to own my basket of dividend paying stocks for now, they are doing well overall, but absolutely why I have and will continue to own XAW and QQQ as my main ETFs for equity growth.

      https://www.myownadvisor.ca/etfs/

      Mark

      Reply
  17. Hi Mark, we are dog people and have felt your pain at the loss of what feels like a family member. It’s never easy, but try to focus on all the joy they have brought you over the years.
    We transferred our TFSAs over to TD in 2020 and I lucked out with timing of our dividend stock investments. I bought a lot of CNQ which was around $17 at the time (covid downturn). Our combined TFSAs are worth $438K with dividend income of just over 24K. They say don’t try to time the market, but every now and then it works out well.

    Reply
    1. Thanks, HJ. Been a gut-wrenching week to be honest but things will get better – we have great memories of Martin and we know he loved us dearly and vice-versa.

      Your TFSA values are incredible. We’re well over $300k here (combined) in a mix of Canadian stocks and XAW and no doubt a big purchase of CNQ has and will continue to deliver wonders. We own over 500 shares of CNQ in particular in various accounts.

      Continued investing success to you!
      Mark

      Reply
  18. Sincere condolences on the loss of Martin.
    Mark, I wasn’t aware that ANY withdrawal in excess of maximum TFSA contribution amounts will qualify for contribution room in the coming years. That is a strategy I hadn’t thought about until I read the Globe article. It certainly allows for converting taxable assets into tax free assets. Wonder if there are certain CRA rules around this?
    Thanks again for your awesome weekly blog.
    B

    Reply
    1. Thanks very much, Bipin.

      Yes, you can absolutely withdraw TFSA assets and can add that amount back, the following year, without penalty.

      The TFSA is a gift of an account for everyone to leverage in ways they see fit, including retirement income planning.
      Mark

      Reply
  19. Firstly Mark, condolences of loss of Martin. As I cat person I know when my last 2 passed at 19/20 we were heartbroken despite the years of love they had bestowed upon us.

    Congratulations to Marcus on his TFSA, but all should be aware that CRA can have an eye out for people whom are ‘too’ successful. I know a couple people who had similar results in WEED/SHOP and had to discuss / prove to CRA that they were not trading for a living.

    The 2024 list of ETFS is again a good read. Gives me time to contemplate my choices and evaluate further moves.

    Reply
    1. Thanks, Murray. 🙂 I’m sorry for your past losses too.

      Been a very tough week. 🙁 Lots of tears.

      I think the CRA would leave Marcus alone given this one high flyer. If he is actively conducting business income activities inside his TFSA then CRA might want to chat with him!

      I had fun with the Best Of ETFs for this year, and given I own Canadian stocks, some U.S. stocks, and a few ETFs myself, it made sense for me to share a few related ETFs because of that including some I own and why.

      Enjoy the reading and feel free to write back whenever!
      Mark

      Reply

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