tax free savings account | Page 2 | Tax Free Savings Accounts | Discussion forum

I would like to comment on:

with Safe investments you are losing money due to inflation.

It seems many, even in advance age, are fixated on idea of "die rich." Which forces unnecessary exposure to riskier investments.

My "investment strategy" is different: I plan not to die broke. What's the difference? Well, as long as I have enough money to complement pension plus government social security payments till the end of my expected lifespan, I don't care if some of it is lost due to inflation.

Example: suppose, I am 80 and plan to live till 100. Also suppose, currently I need to spend $1,000/mo from my savings to keep my lifestyle, as that is enough to complement government payments. I expect that I'll need to spend $2,000/mo of my money by the time I hit 100 to keep up with inflation. Also, that there is no hyperinflation, just gradual inflation causing gradual increase of my spending.

With these assumptions in mind, if I currently have $400,000 in cash (HISA, TFSA), I don't need to play on stock market. I can keep it all in Savings, sleep well, and even have few dollars left at the age of 100 if I manage to hit that milestone.

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So, why did I put "investment strategy" in brackets? Because, I don't invest: no stock holdings, no precious metals, no bitcoins - just HISA and TFSA. I live simple life reassured that every evening, after stock market closure, I still have all my money - it won't shrink because of some stupid tweet from some today's celebrity or from anything else.
It also frees my time to do something useful, instead of wasting it following stock markets and investment trends.
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PS. Yes, I know, in this community I am an outlier. 🙂

savemoresaveoften said
If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.

Correct me if I am wrong, but I think at some point of time, in the last 20 years, both Nortel and BlackBerry were considered blue chip stocks. Just saying.

With these assumptions in mind, if I currently have $400,000 in cash (HISA, TFSA), I don't need to play on stock market. I can keep it all in Savings, sleep well, and even have few dollars left at the age of 100 if I manage to hit that milestone.

Very sound. What if you live to 110? I think that folks are actually worried about running out at the very end; the worst / most vulnerable possible time to do so.

PS. Yes, I know, in this community I am an outlier. 🙂  

We outliers need to stand together. 🙂

canadian.100 said

ronjoh said

I've mentioned this before, but my plan is to go with HIS until interest rates stabilize and then I will probably go with an ETF balanced portfolio. I have spent many hours (and years) trying to beat the market with different strategies.  

You plan to wait until interest rates "stabilize" and then go with your ETF strategy. How would you know that interest rates have stabilized any more than you would know the stock market has "stabilized"? XEQT (an ETF) is still a "stock market" equity investment.
That is why people use a ladder for GIC purchases and why people diversify in the stock market when creating a portfolio. Don't shop endlessly for a multitude of strategies to "beat the market". Bouncing around to "different strategies" is not a good strategy. As you say you have spent many hours and years trying to "beat the market" without success. Again, use discipline and keep it simple. It works!  

This is as simple as it gets. 50% in XEQT (which is a totally balanced ETF Equity portfolio) and 50% in HIS for the fixed income portion. I rebalance the XEQT / HIS back to 50/50 as required.

savemoresaveoften said

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Last but not least, even if u put money into Nortel, or even Br-X (which I did on both), as long as ur portfolio is diversified, you will come out fine in the end. I know I did 🙂

That's what matters: The overall return of the portfolio. The few inevitable losers don't.

Those long term TSX 300 return numbers do include the impact of losses from failures like Nortel and Bre-X. When a company is removed from an index, the index is not recalculated to erase the company's past contribution or detriment to the index.

Brimleychen said

I shared those views from Alexandre & savemoresaveoften, and especially for those hard earned money on TFSA, I prefer to just making a few cents without paying tax. Our whole financial industry have been pushing all kinds of gambles (ie. so-called investments). The only thing for savers for sure is protection by government insurance. This is only thing is matter for me.  

But when we factor in Inflation (now @ ~5%) those 'few cents' you refer to ⬆, are actually in the Negative.

Thanks to today's Inflation, with HISA's & GIC's, we're not winning ... we're Losing.

My two devalued centavos,

Dean

HermanH said
GICs, TFSAs, HISAs, and all other guaranteed rates are all losers. It's just a matter of finding the option for 'losing less fast'.   

Exactly. Saving at guaranteed rates is actually damage-control..... but you're not going to lose 20 percent of your savings in a few days which could easily happen to risk-takers in an unpredictable market.

savemoresaveoften said
If your stock holdings are blue chip dividend paying stocks, you dont have to follow the market nor care whatever / whoever is tweeting day in and day out.
The only downside I see in owning stocks in a retirement portfolio is IF you need to withdraw regularly to supplement your other income, then yes there are times when you will be selling in a down market, which is never ideal. However having said that, I am not sure what cost more at the end, being 100% in cash and lose out to inflation or the steady selling of stocks over time.  

I have all dividend paying stocks US and Canadian ,I don't care and sleep good as long as they pay a dividend . When the market dips and people panic i buy more . Have I lost yes 3 stocks , 1 in oil, 2nd one in liquior and the 3rd was a blue chip General Electric, however all the rest have made me money and some pay monthly . I own 40 dividend stocks with a 5000 as a min purchase . One stock enbridge pays me 1900 dollars a year ,my gas bill is 1200 so home heating is free and 700 goes in my pocket. Another one Hydro One same thing .

I wonder about pipeline stocks, New York City will allow no more gas hookups on new buildings (have to go electric because apparently it's "green"), so if that lunacy's a harbinger things might change for pipelines, no? Agree on Hydro One, everything's going electric, I bought some about 3 months ago.

No new hook ups in New york is kind of funny. There will be more natural gas fired hydro plants eating the gas, and good luck NYC is solid bed rock no easy drilling for ground source, however they do have the Ocean and the grid will need a major upgrade