💰 Become a TAX-FREE MILLIONAIRE: Why you need a TFSA in Canada

If you’re someone who lives in Canada and isn’t using the TFSA, I urge you to hear this entire video from start to finish. It could really change your life.

It’s really important that you sign up for the TFSA as soon as you can, and put as much money into it as much as you can, which is $6000/year starting from the age of 18 years old. If you’re someone who lives in Canada, I encourage you to share this video with others like you as well.

Once you have opened the account, you can transfer money into the TFSA (i.e. making a contribution). You can invest the money inside the TFSA and any investment gains are called your earnings. Because it is earned in the TFSA, it is all tax-free earnings. These earnings are going to help you make even more tax-free earnings. Recall that you’re only allowed to contribute $6000/year, so if you have space remaining I highly encourage you to fill it. Fast forward to next year. You get an additional $6000 in contribution space that stacks with the prior remaining contribution. If you’re someone who is older than 18, to get an exact number for your own contribution space, you can use the contribution calculator link in my description.

The real power of investments, especially in the TFSA, is when you keep the investment earnings within the account and buy even more investments, so that you can generate even more investment earnings. Investment earnings growing on investment earnings growing on investment earnings, is called compound interest. You can visualize compound interest as a virus outbreak effect, where 1 person infected becomes 2, then 2 becomes 4, then 4 becomes 8 and so forth until you have the Walking dead.

Most people watching this video will just go about their day after without doing anything like signing up or putting any money to work, but from what we learned when a virus breaks out is that all it takes for it to explode is to at least start with one infection. If you want the TFSA to work in your favor, you need to at least start with something. If you want real life changing results, then put as much as you can under your contribution limitations.

A benefit with a TFSA is that you can withdraw the money from your account at any time. We’ll use the account example of $1000. Ok so you have deposited $1000 in the TFSA on your 18th birthday, and a couple months you made some quick gains inside so it becomes $1200. You decide to withdraw that $1200 from your TFSA and spend it. So now your TFSA has $0. Remember you still have $5000 in contribution space this year since you’ve already put in $1000 and you’re only allowed to contribute $6,000 per year. From your job, you manage to save another $1000 during the year. You decide to put this 2nd set of $1000 in the TFSA, meaning your TFSA has $1000 inside. This also means that you only have a contribution space of $4000 left this year because you have made this additional contribution. Let’s fast forward to next year January 1st, recall the $1200 that you withdrew last year? That contribution space comes back on January 1st. So what's your new contribution space now? You ended the year with $4000 of remaining space, the $1200 space from withdrawal comes back, and it’s the new year so you get another $6000. In total that is $11,200 in contribution space.

In terms of what you can invest in, there’s so many good companies out there, I made these two videos recently if you want some Canadian Investment ideas. Usually I recommend people to invest in companies that they know and have confidence that they will grow in the long term, like 10+ years.

Contribution calculator: https://personalfinancecanada.ca/calculators/tfsa-contribution-room/

More TFSA questions? https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/tax-free-savings-account/contributions.html

📺 popular videos:
Best Canadian Telecom investments (1000%+): https://youtu.be/M7WpV3lU4B4
Top Canadian Dividend stocks: https://youtu.be/iOTyye7EIlE
Biggest Canadian REITS & ETFs (real estate stocks): https://youtu.be/pnCdyVATg3w

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✔️Intelligent Investor - Benjamin Graham: http://bit.ly/Intelligent-Investor-Ben-Graham
✔️One Up on Wall Street - Peter Lynch: http://bit.ly/One-Up-on-Wallstreet-Peter-Lynch
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