Archive | 2.33

TFSA- New Pickings!

12 Jan

It’s 2010 and TFSA is on my top to do list! 

Tax Free Savings Account is a wonderful vehicle to grow your savings.  Contributions is $5000 max per year.  Last year, I opened up an ING Direct TFSA.  I contributed/withdrew money from my savings account thinking as long as I didn’t put anything over $5000, I’ll be ok, right!?  There’s a big BUT… whatever you withdraw from your account, you can’t put this amount back in the same year.  You have to wait till next year to contribute again.  I find that a little silly since I did over contributed for 2009 and be penalized for it even though my account never went over $5000!  This was a big mistake on my part as interest rates is at its all time lows… earning interest in a savings account is like shaking your piggy bank.  In the meantime, the stock market was on its road to recovery.  If I had stuck $5000 into some stock back in March 2009… I could have grown my $5000 to $7500.  50% or higher depending on what stock you picked!!  I totally missed out on that wonderful opportunity to really grow my savings.  And all this is your money, whatever gains you make in this account is tax-free!  And you can withdraw this money whenever you want it.

$4.95-$9.95 per Trade

This year, I opened a Questrade TFSA trading account.  You don’t need much money to open this brokerage account.  The required minimum is $1000.  There’s no annual fees.  Great commissions fees from $4.95-9.95.  Today I bought Inter Pipeline Fund (IPL.UN- 600 shares @ $11.12).  This is a unit trust that’ll pay me $45.00 per month.  Hopefully, by the end of the year, I’ll be able to pocket $540 in dividends and benefit from the appreciation of the share price as well!  My other stock in this TFSA is Navios Maritime Holdings (NM- 200 @ $6.70).  This is purely for stock price appreciation.  Crossing my fingers, it’ll do well for the year as well.  Now, I have about $2000 leftover… hmm, what should I invest this in!?

This account is fully funded by my line of credit.  I’m taking advantage of the low-interest rates to play the market.  I’ve taken out $20,000.  My rates are currently at 5.45%.  So every month I’ll have to pay $90.00 in interest.  I plan to cut down my debt as fast as possible making $1200/mo payments.   It’s risky I know.  Risk = Reward.

Disclaimer:  I am no professional, please do your own due diligence before investing in the stock market.