I now got it! I finally purchase the mini laptop that I wanted for so long now. I purchase a small 10’1 Acer laptop at The Source. I purchase the 250 GB model, 1 GB of memory. This is more than enough to cover my basic needs. The laptop came with a free anti-virus valid for one year. I just have to send a mail coupon and I should get my 70$ back. I should also get a 50$ credit the same way for the laptop. The price they had advertised is not exactly correct because they make you work through mail coupons, which is very annoying I find. Anyhow, I am happy to be back online! From now on, I will be able to basically work online from anywhere I want. The mini laptop is compact and very light. It can easily be carried everywhere without too much trouble. I would like to purchase a mouse and a case for it.
Investment news
My investment portfolio had done quite well lately. For a little while, my non registered portfolio was exceeding the 71 000$! It’s not below 71 000$, but I am still exceeding the 70 000$.
There’s still overtime available at my job. I could have done more hours today, but I really wanted to “get out of there”. Anyhow, I left after doing close to 2 hours overtime and left. I should take a maximum advantage of the fact that I have overtime available and do the maximum hours I can, but this can be dangerous. I wouldn’t like to reach the point to burn myself. I saw one of my good colleagues leaving without knowing too much what he will be doing next. Money didn’t seem a problem to him, but I told him anyway that I wouldn’t like to see him leaving without having a backup plan, like without having another job, etc... But he left, seem to be in peace and happy. I was happy for him, but seeing leaving was like seeing a part of me stuck in the steadiness of live.
What’s up?
At this point, I do not have really specific plan on what I will be doing but I have a couple of projects I want to work on. They are:
My online projects
My online work is going well. I reach the 150$ in online earning for this month. 150$ is not a lot of money, but knowing how difficult it is to earn money online (at least it is for me lol), I am just amaze by the amount. This means an extra 150$ I will earn for December. I see my online work as a hobby, but if I had been able to earn 150$, I am able to earn hundreds of dollars more. Don’t you think so?
I would like to create a great mix of income from my jobs, my investments and my online work. It could seem simple at first but in my situation, nothing come easily – expect money. Why am I saying so? Well, you could be surprise, but I could make a 600$ investment by the end of November, despite what I taught previously. And I have to say, I am very tempt to do so!
My investment projects
I know this is really not the RRSP season, but I had begun to think about my 2010 RSP contribution. For a change, why not to think in advance? I have this great investment portfolio which perform well. I have more than 70 000$ in my non registered portfolio. For 2010, I can contribute somewhere over to 7 000$ for my RRSP. It doesn’t look like it right now, but RRSP season is not far away. And yes, the thought of RRSP contribution is just stuck in my mind, just like margin – but that’s another story. No way I am going to be able to find 7 000$ in fresh new cash to invest, even if I have until March 2011 to make my move.
A contribution in kind to a RRSP broker account can be costly! (Because of the taxes!!!)
I hold all of my savings in investments of all kind. You can have a taste of it under “My investment portfolio” page. In 2010, all the newest investment I made had performed quite well. If I decide to take some of the investments I hold and transfer them into RRSP – this meaning a contribution in kind to a RRSP – I will have to pay taxes on capital gain (because most of the investments I hold have perform well).
When it comes to a contribution in kind to a RRSP, there’s a way to be free of taxes, free of capital gain: by using investments hold in the TFSA. Yep, that brilliant idea came to me just like in a dream. What about transferring investment hold in a TFSA to a RRSP account? Would I have to pay some capital gain taxes on such transfer? Well, I call my online broker, you know the guy, TD Waterhouse of course and I ask them the following question: Will I have taxes to pay on a contribution in kind made from a TFSA to a RRSP? The answer: No, that’s the purpose of a TFSA, its tax free!
That’s specifically for those kinds of answers I am getting from TD Waterhouse brokers that I am sticking to TD! I LOVE TD WATERHOUSE. I love their way of explaining things to me you know. I love the TD way.
Anyhow, no matter how good is TD Waterhouse, I was thinking about transferring the 7 000$ I hold in my TFSA under the Sprott Canadian Equity Fund into RRSP before the end of 2010. Why?
Well, remember that with the TFSA, when you withdraw money, you are authorized to contribute the same amount you withdraw to your TFSA contribution of the year AFTER...
Ok, I know, I know, none of this is very easy, but it’s not complicated either.
We will go with this easy example, my very own, by example:
I currently hold, let’s say roughly, a 7 000$ into a TFSA invested in the Sprott Canadian Equity Fund. Easy right? Ok, and I have, for 2010, 7 000$ I can invest into RRSP in order to benefit from a tax break. Perfect! No problem. In order to make that 7 000$ RRSP contribution, I simply need to do a contribution in kind and the money will come the transfer from a TFSA status to a RRSP status for my investment hold in the Sprott Canadian Equity Fund. Isn’t that fantastic? But wait, because I am not done yet!
For 2011, it’s not simply a 5 000$ that I will be able to invest into my TFSA, but 5 000$ + 7 000$, for a total of 12 000$! But in order to do so, I need to do my 2010 RRSP contribution before the ending of 2010. Simple and easy.
Of course, you understand that all the point mentions above result of my own dreaming and you SHOULD do your own homework in order to avoid any disturbing financial situation. Thank you. ;0)
Posts
4 comments:
Hi Sunny, just read your post this morning. I think however you are misinformed on some of the TFSA rules. Let me help to clarify, and please double check with your accountant:
If I decide to take some of the investments I hold and transfer them into RRSP – this meaning a contribution in kind to a RRSP – I will have to pay taxes on capital gain (because most of the investments I hold have perform well).
Not true ;) As TD also pointed out, any money withdrawn from a TFSA is not taxable, whether it had gains or not. You can buy a TV, or put it in your RRSP etc.
Well, remember that with the TFSA, when you withdraw money, you are authorized to contribute the same amount you withdraw to your TFSA contribution of the year AFTER...
Again this is another common false assumption about the TFSA. You do not have to pay back anythign you withdraw - you just lose yor contribution room for that year.
For 2011, it’s not simply a 5 000$ that I will be able to invest into my TFSA, but 5 000$ + 7 000$, for a total of 12 000$! But in order to do so, I need to do my 2010 RRSP contribution before the ending of 2010. Simple and easy.
You lost me there. Your TFSA contribution room is 5K per year since 2009. So for January 2011 you can contribute 5K per year * 3 years = $15K, less any TFSA you already contributed in those years (To a maximum of 5K per year, less what you withdrew in that year). It has nothing to do with your RRSP contribution.
But I think its a great idea to transfer from a TFSA to a RRSP and get the tax advantage. At this point you should really have an accontatn to help you out, and give you the best recommendations on that :))
Have a nice weekend Sunny ^^
the TSFA -> RRSP in kind contribution is a brilliant idea.
and yes the most important part is to do it before the new year.
It doesn't work for me because I already did my 2010 RRSP contribution in january 2010. but will work for most poeple.
Hi Avrom and Dividend Lover!
Yeah, very good idea I got about transfering investment from my TFSA to my RRSP!!! I didn't proceed yet, but its something I am looking forward to do before the end of 2010.
I think what is meant is that if you withdraw $7,000 from your TFSA before December 31, 2010 and contribute those funds to an RRSP,
(when you contribute to the RRSP doesn't really matter, as long as it's before the 2011 deadline) - two things will happen - you get an extra $7,000 of space in your TFSA in 2011 in addition to the $5,000 of contribution room you automatically receive, totalling $12,000 of new space.
I think it's a great idea. Please post how it goes, because I want to do the same thing.
I was just thinking of selling a few thousand dollars of shares and moving the cash - it seemed simpler.
But if it can be done 'in kind' without capital gain issues I'll be just as happy.
Great blog BTW. I just found it.
Post a Comment