The View from Canada.
The View from Canada.
Forums, eh? I wonder if this might be of interest?
In Canada, we have a Federal investment option called a Tax Free Savings Account (TFSA). Since its inception, each year the current Government determines how much more you can add into these plans, per person. The TFSA outlasts any particular Government so the amount varies, each year, based on whether or not the current Government in power is looking to buy Votes, in a coming election. On January 1st of each calendar year, you can deposit “this year’s amount” (typically, in the range of $5.000 to $6,500) in "after tax" savings; in one election year, past, this jumped to $10,000! This year, it was $6,000.
Since the TFSA was started, the cumulative maximum allowed contribution stands at $69,500 per person! Someone who does not have a TFSA can open a new one with any amount up to the current maximum, on the day they open the account; a nice advantage should a bundle of money arrive, unexpectedly and be available for investment.
You do not get a Tax deduction/receipt when deposits are made into a TFSA because ‘after tax’ money is deposited. This is unlike other Pension plans where you contribute using ‘pre-tax’ dollars via Payroll deduction, for example and do receive a Tax deduction/receipt for deposits made during the calendar year.
Traditional Pension/Savings plans using 'pre-tax' dollars have lots of rules about how and when you can redeem the funds, within, but all involve paying Taxes on those monies, when withdrawn. The TFSA has very few rules. If you lose money in your TFSA account you cannot claim any kind of tax loss; if you make money in your TFSA account, all of the money (deposits plus profits) can be taken out of the account, Tax Free, at any time and for any purpose! Any money taken out of a TFSA account can be re-added (up to the maximum contribution limit, at the time).
The TFSA has lots of flexibility in terms of what kinds of Financial instrument can be held, within; traditional banking instruments … which I have no interest in. The TFSA can also be the cash source to fund a Brokerage account, allowing you to build and manage a Portfolio of Stock Market instruments. In my case, its Precious Metals mining shares traded on the Toronto Stock Exchange (TSX) and the Canadian Venture Exchange (CVE). I have been doing this, for several years, largely acting on various info we all hear at TFMR or via Admiral Sprott, Jay Taylor, Dave Kranzler, etc. Has been kinda fun to take real actions and feel the consequences of your choices, based on what I glean from the Precious Metals talk spaces.
I manage two of these TFSA accounts, which are fully funded and which I actively mange; one is my own and one is my Wife’s. I am at least aware of PM pricing and exchange rates on a daily basis, if not peeking in on these Portfolios, most days. Trading is sporadic. I wonder if you might be able to guess which of these two accounts I sweat over, more?
Over the years, I have been pretty lucky having made a few early investments which turned over some great profits. When these were way up, I would sell some and diversify into new ideas, hoping they might be the next ‘big play’. Some of the early winners were: Klondike, Novo, SilverCrest, Great Bear Resources and Wallbridge. If only I had the presence of mind to simply hold onto all of the shares originally owned, rather than taking profits or liquidating completely!
One example, in my Wife’s account … she was in Klondike years ago and I would sell segments as share prices soared. Today she only has 100 shares left (instead of 1000s), but her current share price for those shares remaining is $-152.29 dollars per share!
Each of our Portfolios hold about 18 ~ 22 individual Stocks with about 70% overlap between the Portfolios (including those winners mention above, in both, at least initially)! At this point, since inception, my TFSA is up significantly (with the best yet to come) and my Wife’s is up better than double my gains! Yes … I know what side my bread is buttered on!
Let me know if there are more details that you might be curious about!
CHRtoo @ TFMR
Here we Go! Moonshot, given the War footing the World is standing on!
US$ 1559 / 18.02 1.29628
CA$ 2020 / 23.35 Jan 6, 2020