Of course, glad you enjoyed it!

Personally, I don’t let the tax tail wag the dog. While Canadian companies have some tax benefits when held in a taxable account, I personally do not want that much weight in Canadian companies seeing how small of a global makeup they are. So in our taxable accounts we invest similar to what’s in our other accounts – mostly VUN with some VDU and VEE.

Glad to hear you enjoyed that part of the podcast! I skimmed through it all pretty quickly and could have easily recorded a whole episode with just our drawdown strategy haha

I’m planning on opening a taxable account with Questrade soon (after RRSP & TFSA are maxed out). Which ETF do you buy in your taxable account? I’m thinking VCN, XIU, or XDV…. but not sure what would be the best option for tax purposes….still lots to learn to master the tax game.

On a side note, I really enjoyed your recent ChooseFI interview where you talked about your portfolio drawdown plan! 🙂 two thumbs up!

Hey Ash – Thanks for finding up and leaving this lovely comment!

So glad you finally kept off the analysis paralysis cliff 🙂

There are soooo many nuanced thoughts out there on VUN vs VTI in various accounts. To me they are very very minuscule and pale in comparison to boosting up your savings rate. That will get you to your FI number faster, especially when starting out as your first $100k NW is the hardest.

Personally, we invest in VUN within our TFSA and see nothing wrong with that 🙂

Cheers!

Court

Can you please help me with something? I invested in VUN in my TFSA account but I am not sure its the best investment since I read on the link about Norberts Gambit that you’re better off investing in CAD investments in TFSA and not using Norberts Gambit for TFSA. so my original plan to invest in VTI was not applicable to TFSA.

Can you share guidance on what funds would be optimal for a TFSA??

Thanks!!
Ash

Thanks for the note and glad you found this helpful! Wow you guys have options! If he’s also a Canadian citizen take note and beware of opening a TFSA and RESP in his name (we fully encourage you to open both, just solely in your name). Since moving here from the US, I am learning that Canada is honestly an early retirees dream with all the social benefits in place here.

The Vancouver real estate market sure is crazy, it’s no where that crazy in Calgary – just saying 😉

Thank you so much for this post, it’s come with incredibly good timing for my husband and I! We’ve just moved back to Vancouver (I’m originally from there) from Scotland, where my husband grew up. He’s also an American citizen, having been born in Texas while his parents were on a work exchange there. We’re trying to figure out the best accounts for him to invest in, as we are now permanently settled in Canada (though with the Vancouver housing market being what it is, we may be moving around a lot!).
Much appreciated, and the dictionary made me laugh.

Wow great insight and thanks for sharing this! 39.6% is no joke! Note to all Canada, be aware!

I have yet to see a beaver in the wild… once I do I’ll provide an updated version 🙂 Beaver Tails though – ever person needs to try one out!

And let’s not forget the “Beaver Tail” which to Canadians is a “fried-dough pastry made with whole wheat flour and pulled by hand to resemble the long, flat tail of a beaver. It’s then topped with a myriad of delicious garnishes — anything from the classic cinnamon and sugar to whipped cream and Nutella”.

Ok enough about rodents and deserts. One a serious note, I want to add one important exception regarding US withholding taxes that I learned about the hard way.

What I’m referring to is stock ownership of US MLPs (Master Limited Partnerships) in your registered (or non-registered) accounts. Canadian investors should note that there is 39.6% (no this is not a typo) withholding tax on US MLP distributions and it applies to ALL account types – both registered and non-registered. If an MLP is held in a registered account (TFSA/RRSP) you won’t be able to claim any foreign tax credit. I unfortunately own one of these MLPs in my TFSA where my distributions get cut from $89.32 to $56.28 because of the 39.6% withholding tax.

You can read up more on the topic of MLPs and withholding tax implication in the Globe and Mail article below.

https://www.theglobeandmail.com/globe-investor/investor-education/beware-the-tax-tribulations-of-us-mlps/article35128275/

You can withdraw the amount you contributed into the RESP without an penalty if your child does not end up using the full amount in the RESP – so no need to roll that amount into your RRSP. The growth from the RESP is what you would want to roll over into your RRSP.