There were two stories on the news over the last week that caught my attention.  One was on the number of Canadians that are financially illiterate, and the other was the amount of lost productivity in Canadian work places, due to employees being worried about their financial situation.  To me, the two stories go hand in hand.

Not understanding how money works in society, and the vocabulary of money can lead to stressful situations.  Advertising is everywhere.  You can’t seem to get away from it.  Even google monitors your searches and activity so they can target you with adds related to your interests.  How unfair.  Every add wants you to spend money.  When was the last time you saw an add that told you to save money??

Yes, every bank runs adds on opening a savings account. How comfortable it is, how rich you don’t know you are, you get the picture. But do they explain that if you put money into a savings account, and get 1% interest, while inflation is running at 2% you are actually losing money?  But they show adds getting 3%. Check the fine print that is not big enough to read. That 3% is for only the first 90 days, not for the year. Then 5 minutes later they are running an add for their credit card. So that you can buy things with money (credit) you don’t have, and they can charge you 19% interest. Anybody see the disconnect here? 1% for saving and 19% to borrow!!!

We are coming into RRSP season now. The bank adds should start soon.  But should you really use an RRSP to save?  What about a TFSA?  Why do you think the limit on TFSA contributions is only $6000.00 and RRSPs are 18% of your income? Maybe because the TFSA is better for you? Statically only 69% of Canadians have a TFSA account. (2018 figures.) I have heard, that of those people, 74% have no idea why they have a TFSA, they were just told to open one.  From my experience, over 90% of the people I talk to, have only cash in their TFSA.  What a missed opportunity.

But the SA in TFSA stands for Savings Account. That means cash. A TFSA is a file folder just like the RRSP. They can both hold INVESTMENTS not just cash! Rule 2 of Wealth Accumulation, it’s not how much you save, but hard your savings work.  That really means, what is the return (percent increase in value) on the investments in your TFSA/RRSP? Savings account money doesn’t work real hard.  But what about things like Stocks, Bonds, Mutual Funds, GICs.  They can work much harder.  And you can hold all of these in your TFSA, just the same as you can in your RRSP.

To be short.  If you have $100,000.00 in both your TFSA and your RRSP at age 65.  When you take money out of each, how much winds up in your pocket?  TFSA, all of it.  The whole $100,000.00 From your RRSP.  Only what’s left after your marginal tax rate. If your tax rate is 34% you would get $66,000.00. Which would you rather have, $1000,000.00 or $66,000.00??

But who knew?  Financial literacy is not hard.  Everyone can play any game better, if they know the rules. Want to improve company efficiency? Ever thought of giving your employees a Financial Training course? Message me, or visit .  Let’s talk about showing your employees that there is a realistic, simple, and better way to avoid financial stress.