Investment update: 2013

It’s been awhile since we provided an update on our investment plans but you can check out our 2011 investment update as a reference from where we’ve come from! Since then, we’ve added another property to our real estate portfolio and are in the process of moving all our RRSP and TFSA investments to an online brokerage. we continue to be successful landlords and are working towards increasing our dividend income with a goal of $100/month by the end of 2013.

Photo Credit via Flickr

Photo Credit via Flickr

So, how are we doing with our different investment vehicles?

RRSP (Registered Retirement Savings Plan)

Key features:

  • A tax deferred method of saving: You do not pay tax on money contributed to your RRSP. Taxes are paid when you withdraw money from your account after you retire, like any normal income.
  • Contributions are only possible up until age 69, at which point RRSP’s must be transferred to an RRIF (Registered Retirement Income Fund).

How we use our RRSP accounts:

RRSP account benefits are maximized the longer you contribute to the plan. Thus, while they are not useful in terms of early retirement, they are a great way to minimize current taxes and ensure that we have money beyond early retirement and into the later retirement years. I am personally taking an electronically traded fund (ETF) approach to my RRSP holdings. Using Canadian Couch Potato’s Model Portfolio’s, I am using a variation of the global couch potato portfolio using hand selected ETF’s from the list of recommended ETF’s.

TFSA (Tax Free Savings Account)

Key features:

  • No taxes charged on any capital gains.
  • Contribution limit of $5,500 per year.

How we use our TFSA accounts:

This is where we are going to build our passive income producing empire. We know that capital gains won’t be taxed, regardless of when we withdraw the money, so this makes it the ideal vehicle for the start of our early retirement savings. To start building our TFSA accounts, we are focusing on  Dividend stocks first, as they are not charged withholding taxes. As our portfolios get larger, we may consider foreign dividends. Foreign dividends will largely be held inside our RRSP accounts however, as they are not subject to the withholding tax.

Unregistered accounts

As you’d expect, there are no special benefits with an unregistered account. Investments are all treated equal and subject to all tax laws relating to investments. I have not done a lot of research into these types of accounts. Currently we do not intend to make any investments in unregistered accounts until we have maximized contributions in both our RRSP and TFSA accounts.

Account update

So, what exactly are we holding?


RRSP (% of portfolio)

Vanguard FTSE Canada ETF – 31%
Vanguard US Total Market ETF (CAD) – 20%
Ishares MCSI EAFE IMI ETF – 19%
BMO Aggregate Bond Fund – 30%

TFSA (% of portfolio)

Shaw Cable – 70%
Husky Energy – 25%
Athersys Inc – 2%
Neostem Inc – 2%
Cytori Therapeutics – 1%

The majority of my TFSA holdings are in Canadian dividend stocks – with the other 5% I’m just playing around with minor amounts of companies I’m familiar with. The RRSP holdings are the result of finally moving my BMO Mutual Funds to Questrade and purchasing individual ETFs.


RRSP (% of portfolio)

BMO Asset Allocation Fund – 85%
BLK Global Equity Index – 6%
BLK Bond Index Fund – 3%
BLK US Equity Index Reg – 6%

TFSA (% of portfolio)

SunLife 30%
BMO 60%
Rogers Sugar 30%
CF’s note: I need to do some rebalancing after signing up with my work RRSP plan.  As it stands, the allocations are a bit wonky!  I need to discontinue my BMO RRSP mutual fund contributions and reallocate towards my lower cost funds.

How are you using your TFSA account? Do you prioritize contributing to your RRSP over a TFSA account?

Posted in: Money

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