Blue Monday

I tried, once again, to invest in a stock today. And once again, I was told I could not invest in the particular stock through my TFSA. I'm starting to see a pattern. It turns out that many stocks are not able to be purchased through a TFSA. I think it's because in a TFSA you don't have to pay taxes on your money and any money that you don't physically transfer into that account yourself does not count towards the cap on your TFSA. You are allowed to put $5000 per year into your TFSA. Because I have never made a deposit as of yet, mine is currently eligible for $15K and will be at $20K as of January first. If I were to put $15K into my TFSA today and invest it into some crazy stock that exploded 500% I would have $75,000 in my TFSA, but only $15K of that would have been deposited by me and the other $80,000 would be allowed to be kept in the account without being taxed. The government would not be too happy about that! So, I have reason to believe that, that might be the reason why there are so many stocks I cannot invest in through it. So, I have decided to keep studying the market and all the rules that come with it until January first. I will then open up a new account that does not restrict what I can buy. I chose January first so paying taxes would be less complicated for me at the end of this year and next. I'm pretty sure the tax rate on investment earnings is about 25%. So remember to put that aside every time you sell a stock! You may even want to check with your financial representative on the exact tax rate in your area. Also, don't forget, when buying foreign stocks you will have to pay a fee to have your money exchanged into the market that you intend to purchase from on top of your brokerage fees. Hope you are learning from my blog. Have a good one.

James