There was a lot of news here today about the TFSA investment rate increasing to $10,000. For those who don’t know, this like a bank account where interest earned on that account is tax free. With this news there are also a lot of views on how this is ridiculous as it only helps wealthy people who have that kind of money to invest with.
It did get me thinking though. Even if you only had $500 where the return is pretty dismal compared to someone investing $10,000 would you not invest it still? With a TFSA too you can pretty much pull money out and put it back in as if it was taking money out of a regular savings too. Although, I do find that to be a pretty common mentality where people simply don’t save or invest because compared to a rich person their gain is laughable.
Like most things, getting into the habit of doing what’s right for you and not constantly comparing your lifestyle and earnings to others is the first big hurdle in getting things together I think. Especially with money such as buying things that you can’t afford simply because it is a status symbol of sorts. It’s more about developing the lifestyle habit I think. Even as a child it was those 6 cent monthly interest gains that help me get into the habit of finding ways to get my money to earn more money.
Even if you can only invest like $500 here, I would see it more as an investment to developing the habit of getting your money to work for you. Everyone has to start somewhere regardless of how small it may seem.