Weekend Reading – Tax Free Investing Power edition
Welcome to my latest Weekend Reading edition, where I list some of my favourite finds from the personal finance and investing blogosphere.
In case you missed the last edition, the Financial Stress Index edition, read on here.
A Happy Belated Canada Day to all my subscribers – I hope you had a good day overall. Lots of challenges for our country to work through…
A Happy 4th of July to all my American subscribers!
Matt from Dividend Strategy provided mid-year stats on the BTSX (Beat the TSX) Strategy recently. From the article:
“Every single stock is up on the year so far with total return on the portfolio (including six months worth of dividends) of 30.7%. That’s a 12.1% absolute advantage over the TSX60 benchmark’s total return.”
Peter Thiel, the luminary venture capitalist billionaire, has used a common personal retirement account as his own “$5 Billion Tax-Free Piggy Bank,” according to a new report from the nonprofit news organization ProPublica. Can you imagine that much inside a TFSA (Tax Free Savings Account)??
Well, while you and I will never have that much invested in our TFSAs, the results from investing inside the TFSA for years on end can still be quite remarkable as part of any wealth-building plan…
These are great things you can do with your TFSA.
Assuming you started with today’s contribution room only, no gains over the last 12 years since account existence, and continued to invest inside this account, you could create some significant wealth over the next 20 years.
Simply put, don’t forget about the power of tax-free investing as part of any wealth-building plan. It is an absolute gift of an account to all Canadians!
Image with thanks to Wealthsimple.
In case you missed my articles this week:
What is an Executor of a Will and what do they do?
I interviewed the guys at Stocktrades.ca about their top holdings and how they invest their $$$.
DGI&R shared some of Canada’s best moaty stocks. I happen to own a few from his list for that reason. By moaty we both mean “competitive advantage”, a high-barrier of entry to even to try and compete with these established companies, let alone thrive.
Here are some examples from his post: Royal Bank of Canada (RY), Canadian National Railway (CNR), and Enbridge (ENB).
Tom Brady admitted his “laser eyes” didn’t work for raising the price of Bitcoin. The seven-time Super Bowl champion in early May changed his Twitter profile photo to include “laser eyes,” which is what many bitcoin enthusiasts do to show their “laser focus” to push prices higher. Well…that didn’t work…
Bitcoin was also in the news in this making sense of the markets post by Dale Roberts and the team at MoneySense.
Well done Robb Engen, in this mid-year net worth update. Good on him to be brave enough to post that but certainly the transparency is nice to read. I still struggle with net worth updates!
The Big ERN wrote emergency funds are still useless.
Financial Independence – Retirement
As part of my ongoing commitment to share some financial independence, early retirement or retirement articles from the blogosphere, here are some links!
What is a financial plan and what should that cover? Read on in this comprehensive post about the elements of a financial plan.
On Cashflows & Portfolios, we outlined the Three Pillars of Canada’s Retirement Income System. Make sure you know how each pillar can apply to your retirement income journey.
There are also dozens of Retirement stories and essays you can learn from here.
Financial Mechanic lost $70K in a month of investing. Did she give up on FIRE?
Save, Invest, Prosper!
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Enjoy your weekend!
The ProPublica article is very interesting. Those sorts of opportunities to invest in startups are available only for the ultra-rich.
Any Canadians made billions with TFSA yet?
Billions inside TFSA, not that I know of!!
I have been reading these Weekend Editions for a few months. I do like them but i have a hard time following along to the main theme of the edition. You are reading along and all of a sudden there is a link to a different post or did you miss this from last week. So you say, thats interesting, so you go there, then come back to continue what you starting reading which you dont know where you were
Is it just me or is there a trick. I need help
Ha, thanks John. I put the title in my post somewhere but I can be more specific in the future to call that out. I don’t want to confuse readers! Appreciate the readership.
Just a note re. Big ERN’s post about emergency funds being useless.
If you are retired or approaching retirement ensure you read the section: “Just for the record: Do not keep 100% equities if…”
Yes, very important to read his fine print per se. I don’t think Big ERN is really that much against cash, rather, he just sees more value in investing over cash. I see his point but I cannot and will not live without our emergency fund just in case!!!
AHH! If only I had Shakespear’s way with words and more financial wisdom I could supplement Financial Mechanic’s money lose article with – How I Lost $60K in One Day along with it’s sequel How I Made $60K in One Day
Spoiler alert – I didn’t do anything while the market played out.
The only thing I really lost were dividend distributions. That I am down a fair amount but this year, 2021, should equal 2019’s payout.
However the loss does hurt in that I am now in to the withdrawal phase of my RIF & LIF so that is money lost that will unlikely be recovered.
On the bright side, unless something major comes up, I am pulling in excess of my spending. At least this year. So the excess is going in to a non-registered portfolio which in normal times will grow and obviouly supplement my cash account. If the cash account gets “too” big then it gets dumped back in to the investment portfolio and that in turn churns out more dividends. Hopefully a never ending cycle until my due date expires.
Take care. Stay healthy.
Smart stuff Ricardo. re: excess to non-reg. and into any tax efficient stocks.
Yes, I suspect we all lost a bit in spring of 2020 and those that held on, let alone added money in April – August 2020 were well rewarded.
Have a safe weekend!