No problem!frankc92 wrote: ↑ Thanks for the reply Mike. To answer your questions:
1. My US equities make up about 23% of my investment portfolio, with VFV comprising about 40% of the US equities component. I wanted to increase my risk a bit and place a bit of higher emphasis on the S&P 500 index, while mitigating some of that with VUN.
2. Re: RRSP vs margin - great question, and to be honest I'm entirely sure my rationale is correct. I'm expecting a significant jump in income in within the next 5-10 years (i.e. from mid 50s to >150); currently a 25 y/o student. Taking this into consideration, I was under the impression that it would be a good idea to save the contribution room as it carries over. Is this the right train of thought?
The TFSA portfolio breakdown is something along these lines:
VAB: 20%
VCN: ~18.5%
US equities: 23%
XEF: 18.5%
XEC: 10%
XRE: 10%
Will visit those links. Thanks!
Okay, great to know that there is a rationale for your VFV vs VUN ETFs, just wanted to see.
In regards to your RRSP situation, your general thinking is correct about when to claim deductions from your RRSP, but you are incorrect that you need to put off investing in your RRSP as a result. I mention this above in my reply to Mobhatia91. A quick copy and paste from there:
"When you contribute to your RRSP, you are eligible to receive a tax refund. You can decide to claim this refund for the tax year you contributed it in, or wait for a later date. You would generally wait for a later date if your salary was really low. With a higher salary, you will receive a better refund.
Any returns that you earn in this account are tax deferred. That means that as long as its in the RRSP, you are not taxed on your gains. This allows you to have more money available to reinvest and grow your portfolio while it is in the RRSP."
As a result, even if you have a low salary at the moment and expect it to increase in the near future, it makes more sense to max out your RRSP contributions before starting a margin account. This is because these investments will not be subject to tax for the time being and can compound and grow. This is better than a margin/non-registered account, as you will obviously be taxed on any gains you accrue each year. Again, the deductions that you are entitled to as a result of these contributions can be claimed at a later date.
Would obviously recommend reading more into it. Here is a quick article that may help clarify if my post didn't.
http://business.financialpost.com/perso ... -deduction