This TFSA means business
Mike Russo, a self-taught investor, developed an investment strategy that even impresses the pros
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Mike Russo, a self-taught investor, developed an investment strategy that even impresses the pros
Mike RussoAGE: 34 PLACE: Mississauga, Ont. TFSA TOTAL: $52,000 STRATEGY: Mostly Couch Potato with one bank stock thrown in |
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Russo started by reading Andrew Hallam’s Millionaire Teacher. “It was a basic introduction to investing but a very good read,” he says. Several months ago Russo settled on a strategy, and he ramped up his contributions to add to his TFSA monthly. With this approach Russo allows his contributions accumulate in cash and then around the six month mark he invests the money in index funds. His index fund of choice are the TD e-Series funds, which he’s set up into a quasi-couch potato portfolio. About 15% is invested in a bond ETF, 10% in TD Bank shares, and the remaining 75% split evenly between a U.S., Canadian and international equity. “I’m almost completely in the couch potato now and I’ve been happy with my returns,” he says. Now Russo is also taking some time to focus on his wife’s TFSA strategy. “She’s in a lower tax bracket than I am so the TFSA is important to her savings program and I’m trying to help her build up her contributions as well,” he says. As for what he plans to do with his TFSA money, Russo isn’t sure. “It’s more liquid than an RRSP so I want to use the money for another investment in the future—maybe as a down payment on an investment property or as seed money for my own business,” he says. His own advice for beginners: Be wary of other people’s investment tips. “People say they don’t have time to invest, but I think they should at least have the time to understand the different investment options available as well as the pros and cons of TFSAs and RRSPs in general,” he says. As you get more hands on you can better manage your expectations. “For me, I’m happy with the couch potato and once it’s in autopilot, it’s pretty smooth sailing from there.”Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email