UNDERSTANDING HOW YOUR MONEY IS INVESTED IS HALF THE BATTLE One of the most common questions I hear in my job is ‘what type of account should I be saving in?’ If you are just getting started with investing, then you may have heard about RRSP’s and TFSA’s but not really know the difference between them and when you should be using each one. That’s what I’m here to talk about today, the pros, the cons, and the best time to use each of these accounts. When it comes to basic investing you have three main account types you can use; an RRSP, a TFSA, or a non-registered account. Each of these have their own positives and negatives, so it’s helpful to figure out the most valuable for your current situation. You can hold a variety of investments (stocks, mutual funds, ETF’s, etc.) in any of these accounts; there are a few limitations in RRSP’s and TFSA’s, but unless you are a very high risk, speculative investor, this will likely never come up. RRSP’s (Registered Retirement Savings Plans) Since you are here reading a blog about finance, I’m going to assume that you have heard of an RRSP. […]
A Beginners Guide to Early Retirement
Early retirement is simply the process of retiring before the standard retirement age and often refers to retirements that start decades before the typical age. An early retirement aims to provide the maximum free time during our best years of life. After all, what is the point of saving bucket-loads of money for retirement only to be too old and frail to use it properly? My aim in life is to rapidly save enough money to allow me to permanently retire from paid employment. This is not to say that I won’t continue to work after I reach the point of financial independence, just that I won’t have to. The process for doing this is to drastically reduce expenditure so that you can save a large percentage of your salary (50% or more) for your early retirement. The very basic steps are: Live on 25% of your salary Invest the 75% Reach the point at which passive investment income exceeds expenses and Retire early! They are the steps and they are easy to articulate and difficult to argue with, but incredibly challenging to implement well. Let’s start with common objections at this stage: I can’t live on 25% of my wage! […]
