TFSA – Investing at 18 Years Old

Hannah just turned 18! What an exciting time! Now she gets to open her own investment account. And her very own Tax Free Savings Account (TFSA).

It’s perfect timing too.

VEQT vs VGRO in the TFSA

I love the new Asset Allocation ETFs from Vanguard in Canada. They really make investing easy. Excellent diversification. Automatic rebalancing. Low cost. The perfect set it and forget it portfolio. If I was starting over again, I’d be all over these. Well, I am all over them anyway.

Vanguard recently released the VEQT ETF. It is a 100% equity portfolio. Just days prior to VEQT, we were looking at VGRO for Hannah’s TFSA (80% equity and 20% fixed income). Either one is an excellent long term investment choice for a new investor looking for simplicity, especially for a young person.

So, we have an appointment set up to open Hannah’s first ever, brand spanking new, very own investment account. Yay!

Although Hannah is only starting out with the $6000 TFSA contribution limit for 2019, her investment account will be with our brokerage. That means the minimum account fees are waived while she is part of our household. If she continues investing, as I certainly expect her to, she should have accumulated the minimum assets to waive the fees by the time she is finished university. She is off to a great start.

Here is an awesome FREE read for any young person in your life:

If You Can – How Millenials Can Get Rich Slowly by William Bernstein.

I am a huge fan of William Bernstein. And this little book is a great summary of what everyone needs to know about their personal finances. It is free. And is worth the read, so pass it on to your young person.

Hannah doesn’t know anywhere close to alot about investing but she has mastered many tips in that book. Most importantly, she lives below her means. Sure, she doesn’t actually have many recurring expenses of her own. But she has always been thoughtful with her spending. She knows that she can have almost anything, but she can’t have everything at once.

TFSA – Just Another Retirement Account

I can’t count the times that I have read the opinion that the TFSA has an unfortunate name. I agree. Many people perceive it as a short term savings account that just happens to be tax free. But it is a powerful retirement account. Fill yours with some amazing assets.

For us old folks, $63,500 in TFSA room has accumulated from 2009 to 2019. That’s $127,000 for a couple.

Soon Hannah will have a bunch of VEQT in her TFSA at TDDI, kickstarting her retirement savings. She has a minimum wage job so she’ll save any RRSP contribution room for her higher income years. Hopefully the TFSA is around long into the future so she can top up her contributions each January and let the magic of compounding do it’s work.

I’ll report back here with the performance of her portfolio, with her consent of course. And it will be interesting to see if she has any issues or regrets with her chosen asset allocation and perceived risk tolerance.

What’s New?

I would like to thank everyone who continues to stop by in here. Especially since I am a delinquent poster. We are still getting things organized for living abroad. Learning a new language is incredibly time consuming. And I have high expectations of myself as an adult learner. I joke that I can literally feel the neurons in my brain going off. But it’s actually quite true.

Our next adventure is just months away. I have a huge travel itinerary planned for Eastern Europe and hot spots in the Mediterranean. Among many other places. I am particularly interested in the big bang you get for your travel dollars in some parts of Europe. Certainly, our expat living will be pretty low cost compared to here at home. This was not done for personal economics. It is just because of where we’ll be living. I’ll be able to share those details as well.

Here’s to expat living. And to teens with TFSAs! Sniff, I’m so proud.

This website was set up to keep family and friends up to date on our round the world travels. There are no affiliate links here. And we aren’t trying to sell anything. Any outside links are for your convenience / information. As always, thanks for stopping by.

About the photo at the top: I often put off posting because I don’t have a beautiful and approriate photo handy. This is not efficient. So I have decided to use feature images that are simply beautiful, if not approriate. This one is from our trip to Quebec City. It happens to be our current background on our desk top. I am almost certain I am not the photographer. So credits to Rob. Or Hannah.

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