Short Term Investment Advise
I am seeking an honest opinion on a short term fixed investment with a return that at least beats the Govt Inflation figure. My time horizon is 9 months to 1 year. I dont have a background in finance and am struggling to make out a best option
Here is a little background story:
I am a 38y old Ontario (GTA) resident and have a family income of $175000 before taxes. As my current liabilities I have:
(1) Mortgage with TD @2.6% fixed. My term is expiring in Jul 2020. I paid 10% down and borrowed 565K but have been making some lump sum payments in the past and brought my current outstanding to roughly 462K in around 3 years
(2) Car financed at 0.99% with 4 more years to go
I immigrated to Canada in 2013 and had some lifetime savings of 200,000 CAD abroad which I recently brought to Canada. With this money I have following options:
I know internet that is not the most appropriate place for asking out for a help like this, but for some unknown reasons and past bad experiences I am reluctant to go a financial advisor for this advise. Any help will be appreciated
Here is a little background story:
I am a 38y old Ontario (GTA) resident and have a family income of $175000 before taxes. As my current liabilities I have:
(1) Mortgage with TD @2.6% fixed. My term is expiring in Jul 2020. I paid 10% down and borrowed 565K but have been making some lump sum payments in the past and brought my current outstanding to roughly 462K in around 3 years
(2) Car financed at 0.99% with 4 more years to go
I immigrated to Canada in 2013 and had some lifetime savings of 200,000 CAD abroad which I recently brought to Canada. With this money I have following options:
- Pay this money towards the downpayment for another freehold Townhouse or condo in the GTA, get additional mortgage (which we may qualify for), pay down the mortgage with Rental income from this new unit.
I find it too risky looking at the current real estate market and considering this money as my lifetime savings, i want to limit my exposure to a very volatile Real Estate Market.
Moreover, I also think that the extra earning (assuming a rent around 1600 CAD PM) I will get from this 'new' investment unit, it will count towards my household income and I would be paying more in taxes in a higher tax bracket - Pay down my existing mortgage faster by doing a lump sum payment but there are limitations here
I could only pay upto 15% of my original amount for a given calendar year - Pay for my car loan but
Considering its only at 0.99% i can keep it going and invest this money somewhere else (To be determined) where I can easily make more than 0.99% - Don't do anything with this money but invest it mutual funds for long term using a passive investment strategy
- Savings account- Big 5 dont give anything in Savings, I might have to go with a smaller credit union or an online only bank such as Alterna Savings
- Short term GIC that can give me a return north of 2% but couldn't explore the financial institutions offering a decent short term GIC
- Invest in short term Canadian Bonds as mutual funds or ETF but not sure whether this is a good fixed income option or there is a chance that I may loose my hard earned money
Moreover, even if I go with any of these options, the income from these 3 may contribute towards my family earnings and throw us to a higher tax bracket or it's not going to be significant - Park all this money as a GIC in a TFSA account (we have full contribution room in our TFSA baskets) since 2013 and withdraw it next year without paying any taxes on the potential earnings.
I am not sure about the liabilities or penalties going through this route because once we take out money from TFSA, with our earnings and other expenses, we may not able to re-contribute the withdrawn money anytime soon
I know internet that is not the most appropriate place for asking out for a help like this, but for some unknown reasons and past bad experiences I am reluctant to go a financial advisor for this advise. Any help will be appreciated