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“The reason for using this statement is that the term “financial freedom” is aimed at very weak people, but a lot of times people forget to mention one thing: if you don’t have an effective tax strategy, you will never be rich, and that’s a fact. Maybe you can inherit a lot of money or win the lottery, but that doesn’t happen to many people. You have to actually be smart when they are investing because the government and the banks don’t necessarily have your best interests at heart” – Hashim Chaudry
The smart investor workshop is designed for individuals to really understand some of the most common investment tools out there and why they should or shouldn’t use some of those tools, as a lot of tax applications are available around them.
So, the goal of this workshop is to give you a basic education and understanding of how things work in your current investments or how you can possibly improve future investments to keep more of your hard-earned money in your pockets.
TFSAs are Tax-free if you are investing, and if you are not a high-income earner, don’t put money into an RRSP. Put money into TFSAs for now because you will get really good benefits from TFSAs. But if you are a high-income earner and don’t have a business, then you might invest in RRSPs.
A well-established system to systematically take your hard-earned money away from you while you live in a fool’s paradise where your money is growing to its fullest potential and you are saving taxes. People who are invested in RRSPs are often led to believe that the banks and the government have their best interests at heart.
The tax-free savings account (TFSA) contribution limit for 2021 is $6,000, remaining the same as in 2019 and 2020.
If you have never contributed to a TFSA and have been eligible since its introduction in 2009, your cumulative contribution room will be $75,500 in 2021.
Gains and losses are caused when a transaction occurs. You manage your gains by also transacting on your losses in a given year. Recommended if you have maxed out your TFSA and your taxable income is not too high on average.
Crypto is treated the same way as other investments are treated, which means you will pay gains and, if you have losses, you will realize your losses each time you have a transaction.
So, a lot of times people have a misconception of this whole notion where they will say, “Yeah, we bought and sold stock through the years, but we never put money out of our account.”
So, why are we paying taxes? the answer to that is to focus on this whenever the transaction happens because each time there’s an exchange, your capital gains are triggered; it’s either a loss or a gain. You manage your gains by also transacting on your losses in a given year.
So, it’s critical to recognize your losses when you have a non-registered account. For example, if you have stock A that is doing well and stock B that is pretty much burned out, what most people don’t do is sell their stock that is doing poorly, and we explain why. Because you had a stock that you bought for $100,000, but now it’s worth around $5,000, sell it! The answer we typically get is “we’ll get back to you.”
Proceeds minus adjusted cost base minus selling and capital costs = gains.
Gains divided by half are your taxable gains.
There is a difference between capital and non-capital income.
Let’s take an example of capital gains: you bought a house for rental purposes and are generating income from it. It’s not your personal residence, and then a few years down the road, you sell it. The way it works is that when you sell it, you will have to pay capital gains tax on it. That’s pretty much it! You take the proceeds, whatever the selling price is, minus what you paid for it, or book value, because if you are depreciating it, you shouldn’t be appreciating assets that are appreciating, like homes.
Appreciating assets are not recommended to depreciate because you are literally lowering your book value, and that means when you eventually sell them, you will pay far more in taxes, and you’re often jumping tax brackets.
Day trading, which involves buying and selling an investment within the same day or multiple times within a day, is one of the activities that may constitute carrying on a business, according to the CRA.
In Canada, real estate is by far one of the safest forms of investment.
STOP listening to these silly people who say that the Real Estate business is not safe…Do you remember 2008 and 2009? It even allows you to defer your gains if you leverage the equity in your house.
Interestingly, many people speculate so much about real estate, most of the time hearing bad news, but they won’t tell you that there’s more money that can be made in real estate compared to any other investment. People boast about crypto without realizing how volatile it is. It is without a doubt that real estate has created more millionaires around the world than anything else.
So, in the end, your money is in safe hands, and we assure you that we’ll provide you with the best services if you trust BG Accounting and Business Solutions.
You can schedule a complimentary initial consultation with one of our professionals by clicking here.
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