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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: tyc:> who wrote (68826)	2/14/2010 2:55:11 PM
From: roymario	Read Replies (1) \| Respond to of 78426

Tyc, 1. If my only source of contributing to a TFSA is funds from an RRSP and if I was in the lowest tax bracket, and "RIFFing", then perhaps I might agree with cashing it in. As $5,000 a year, however, is relatively small in amount and many of us can borrow short term or take funds out of a non registered vehicle, I would always choose that so that I do not pay tax early, and as you mention at my highest marginal tax bracket. 2. In regards to where I take losses I see less relevance. A loss in a registered vehicle (RRSP or RRIF) is still a loss (which I do not want, period). I plan for net gains, not net losses. The tax effect of the loss is irrelevant to my choice. In the case of the RRIF it does me no good (although I never paid tax on the principal value original invested and deducted from my income). In the margin account (I don't margin) (assuming it is gains/losses we are talking about) I only get 1/2 the loss as a taxable loss because I only pay 1/2 the tax on the gains and again I am planning for "net" gains not losses. 3. I would advise always investing in a manner to earn the highest rate of return in the long run (the "long run" gets shorter as I age :0) ) but within that strategy when my portfolio has a mix between investment income and gains and it does: a. I place all my "safer" interest bearing vehicles in registered vehicles (such as RRSPs) because I will pay the highest marginal tax rate when amounts are included later in my income. I have lost the tax advantage of any gains I made. b. I place vehicles that will attract gains (share/warrants) in my non registered portfolio. I have to pay tax earlier but it will be at a nice low rate for gains and dividends. (Still I do also invest some RRSP funds gains oriented vehicles as it is my personal investment style to try to get lots of gains). I try to put my "sure winners" in my TFSA (LOL). I am a big believer in "pay as you go" with taxes especially if you are not in the highest tax bracket. As I am heading towards retirement tax deferal is less valuable to me (RRSP) than for example my sons. After paying tax the rest is truly mine or my estate's. I also believe that once one has enough wealth, why bother taking high risks anymore (except for "kicks"? I hope this makes sense, but it may be worth exactly what you paid for it (as it is the particular details of one's personal financial position that determines the correct choice out of alternatives). R.