TFSA Mistake: Don’t Leave Your Long-Term Money in Cash

Don’t make this killer TFSA mistake: If you’re saving for the long term please (please!) don’t leave your capital in cash.

💈💈💈

One criticism, by the way, of TFSAs, and it’s actually stronger than it’s ever been because I’m seeing so many plans: the number of people who are using them, not for emergency funds, not for a down-payment fund, but for for long-term savings, like an RRSP, who have 50, 60, 80 percent of the money sitting in cash still. They’ve been putting money in for years and they’ve literally never invested it!

Yeah. If you talk to people in the investment industry, that is like a big issue. People open accounts, they dump money in and they never do anything with it. And I bet you a lot of those accounts, even when interest rates were going up, they were probably in accounts where the interest rate wasn’t going up by any great degree and, so they missed out on the risk of the stock market, but they also missed out on guaranteed safe gains.

And the opportunity cost, because some of these people have been doing this for 10 years, is absolutely enormous. And of course, it compounds over time. So it’s, it’s uncomfortable to even look at some of these, but you see it so often. This is not something you see 1 out of 10 times. You’re seeing this 3 out of 10 times type thing.