Archive
March, 2009 Monthly archive

HOWTO: Start Investing Today! By Using the Perfect Investment Vehicle For Students – the TFSA

 

They say the best investment for students is to start their own businesses. However, now is also the best time to start investing in the stock market with the recent down-turn of the economy.

Warren Buffet said it best, “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Simply put: Opportunities arise when the market is scared. With current talks about the economy, everyone seems to be scared.

For young adults like you and I (who have  limited income) this is the perfect chance to own shares of strong, champion companies. Companies that will bounce right back after this whole mess has been cleared, leaving us with golden portfolios that we normally wouldn’t have had.

And if you are Canadian, you should start using that TFSA account right now! Here are some details of the TFSA (via MDJ):


  • Starting 2009, anyone aged 18 or older can contribute $5000/yr to the TFSA.
  • The TFSA can grow and be withdrawn completely tax free.
  • You never lose contribution room even when withdrawn.
  • Withdrawals can be made at ANY TIME with no withholding tax.
  • Contribution room can be carried forward indefinitely.
  • You can contribute to a spousal TFSA, and they can withdraw from it tax free (income splitting).
  • Withdrawal income does not affect government benefits like OAS, GIS, or CCTB.

The Fine Print:

  • Contributions are not tax deductible.
  • Capital losses cannot be claimed.

 

 

 

So, if you can grow your investments inside of the TFSA, it will give you more tax-free space for your money. With time, you will be in tax-free haven!

Here’s how I got started:

 

1. Read, Read, Read and Read Some More

It’s imperative that you understand what’s happening in the market right now, and how fracked up our economy is. You also need to understand how to properly trade/invest, and the mistakes inexperienced investors make.

To start, read up on the following: What is ‘TFSA’? - Learn the Basics of Trading/Investing - Books to Read

If you’re too lazy to read at least one book on investing, you probably shouldn’t be investing. Investing isn’t gambling and there are many strategies to do well. If you don’t do your research, then you will lose your money.


2. Join Stock Communities

After your reading, chances are you will still feel lost on where to start finding awesome stocks, ETF’s. The best way to find them is through stock communities. For Canadians, I suggest Stockhouse. Follow other’s portfolios and do your own research. Don’t just blindly follow the most popular user’s porfolios. It’s you who will be impacted by your losses, not them.

 

3. Get a Discount Brokerage Account

Which is the best for you? Check out the comparison here. If you have a limited budget like me ($250-$5,000) I suggest Questrade even though their service is the worst I’ve ever seen. I plan on investing on small- to medium-cap stocks so I’ll be trading +1,000 shares. Questrade is the cheapest for this. Also, Questrade offers a TFSA trading account, allowing you to easily add to your TFSA.

 

4. Happy Trading!

Congrats! Now, keep a close eye on your portfolio. I use several tools to do this: Google Finance, Yahoo Finance, MorningstarStockCharts, Stocks3 – A Vista Sidebar Gadget and a crap load of blogs and news websites.

 

- Peter Kao

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The Great Innovation Competition

Hey Canadian students! Do you have a wicked idea that will change the world? Need some startup money to get started?!

Canadian Business is having their annual The Great Innovation Competition. The winner will win:

* Up to $50,000 in engineering and consulting services from Nytric Ltd. towards developing a prototype

* A free feasibility study by Nytric Ltd. valued at $20,000

* Intellectual Property legal services from Bereskin & Parr, valued at $10,000

* Business and financial advisory services from nbp, valued at $10,000

* Invaluable publicity including a profile in an issue of Canadian Business Magazine

All it takes to register is provide details under 1000 characters for the following categories: Innovation, Product Status, Marketing Status, Competitive Analysis.

Entries due by May 1, 2009.

Click here for more details.

Good luck!

- Peter Kao

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The Dumb Will Get Dumber, and the Smart Will Get Smarter

It’s surprising to see so many people waste away the benefits of the internet. The occasional gaming a few times a week is alright, but nowadays you can do just about anything on the internet. The problem is – some of us do nothing online.

You want to explore a new hobby? Visit Sutree and you can learn to become an expert. Need an easier way to manage your personal finance? Visit Buxfer and setup a budget in minutes. But many remain ignorant and visit solely entertainment websites that only wastes away countless hours. These people were the typical couch potatoes, and now they have evolved into desk potatoes. The only difference now is people are in control of the content they receive, and that may either dilute their general knowledge or increase it tenfold. Take for example, a sport fanatic. He/she will spend majority of their time reading game results online. Or, car enthusiasts who will spend the entire the day watching video reviews. Why? Because they can and they want to.

With TV, you will at least be forced into catching a glimpse of the news or forced to watch something of a new subject when nothing good is on (ditto for magazines and newspapers). But because the way the web is, you can visit a website every day of your life and still learn about the same subject, albeit different subcategories of the subject but still the same general subject nonetheless. That’s alright, however the danger comes when a dumb person likes dumb things.

Now, it’s a whole new discussion to define intelligence. However, I think we can all agree that most people who comment on Youtube are dumb, either that or they are incredibly effective in writing numbingly idiotic comments. So, the dumb will do dumb things, such as watching all ball-in-the-groin videos on Youtube while the intelligent may watch a single ball-in-the-groin video, laugh his/her ass off and spend the remainder of time learning how Bush sucked as a president, which may I dare say effectively explains the dirty core of politics.

But how about easy online access to the news and other lessons? Doesn’t that help “dumb” people engage in learning experiences who would otherwise be wasting their time? No, we’re all spoiled and we get what we want. Just be hopeful that you do more online than reading the entertainment section on Digg.

The internet has so much potential to save us time, educate us on important life lessons or entertain us. Unfortunately, it further grows the gap between differing intellects. The workforce will contain far brighter, well-rounded individuals who will take even more advantage of poorly educated folks.

All in all, the dumb will get dumber and the smart will get smarter. One thing is for sure though: we will all end up knowing more than before. The question is – about what?

For better using the internet, I’ve listed a few sites that I visit regularly to update my knowledge:

Personal financeRedflagdeals Forums, Buxfer

Investment – Stockhouse, Four Pillars, Million Dollar Journey

Economy and Market – Canadian Business, Business Week

Science and Technology – Wired, Lifehacker, Engadget

Entrepreneurship – Springwise, Trendwatching, Inc.

Overall knowledge – Digg, TED, Flora.tv, Wikipedia

- Peter Kao

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