In my practice, I notice that very few people maximize the full potential of their TFSA accounts. A recent RBC survey confirms my observation: it shows that 57% of Canadians invest their TFSA in money market funds and guaranteed investment certificates (GICs) at a low interest rate. Moreover, 43% believe this account serves only for saving and not for investing for their retirement. A liquid and secure investment in a TFSA is ideal for meeting short-term needs, but if their investment goal is long-term and ambitious, then investors would gain by opting for investments with a higher potential return. Don’t forget that a TFSA is a powerful tool for creating wealth since the income from investments will never be taxed while accumulating in the account, nor when sums are withdrawn.
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