TFSA strategies (#239)

Christmas is the most wonderful time of the year, but tax month is a close second. For buy-and-hold investors like myself, this is the only time of year I get to do anything significant in my portfolio. That's why I take a moment to reflect on my portfolio every February.

My tax-free strategy may seem static from the outside, but it has changed as new products have come into the market and as I've matured in my investment philosophy. The market is a highly dynamic environment and even a buy-and-hold strategy requires sharpening every so often.

In honour of tax-free savings month, we think through tax-free investment strategies in this week's episode, with the help of a few listener questions.

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Rhona 

I am asking on behalf of my daughter (turning 30!) regarding her tax free investments.

Are there any recommended changes for 2021 to the high risk etf portfolio.

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Sonya

I am 30 years old and have recently started worrying about my future financially. Until now, I have been using most of my savings to pay off as much as possible into my bond. I have also been contributing to my pension fund. 

I've gotten to the point where I can finish paying off my bond in about two years and I have that additional money to put towards my investments.

Should I continue to pay extra into my bond and pay it off in my two-year timeframe or rather put more into other investments?

Any advice on what to do with that extra money?

 I recently opened a TFSA started putting 60% in Ashburton 1200 and 40% into Satrix Top 40. I plan on putting the maximum monthly amount in there but not really sure of what ETFs to invest in. 

I then plan on putting the money left over into ETFs but am unsure of which ones - I have thought of adding MSCI Emerging markets or maybe Dividend Aristocrat. Also, is it worth adding bonds into the mix? 

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Boitomelo

I like how Kristia pronounces her name as KRIS-tia while Simon pronounces it as Kris-TIA with emphasis on the last three characters. Have you guys noticed? Just love it 😊. 

Thank you for your contribution to my getting my act together as it relates to finances. Towards the end 2020 I became debt free and I am never going back to debt for anything. It has been a long 4.5 years' journey, but very rewarding. Thank you for your service to the community. 

Anyway, my question is this. Why / How does it happen that the same ETF, Ashburton 1200 for example, can be green in my normal ZAR account, while it is red in my TFSA account or vice versa? Does the different amount in both 'accounts' matter?

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Edwin

Like many Fatties I am a pet lover. Many decisions I have made about my dogs are purely irrational, but hit the budget really hard. I want to share a summary of my recent pet experience just to alert people about what they can prepare for in terms of how hard a pet can hit your budget. 

I have an 11 year old basset hound named Rossie. He is low cost and low admin. Loving, gentle, healthy and clever. A perfect dog. We realised that Rossie doesn't have many years to go and decided to phase a younger pet in so that when Rossie kicks the bucket we have pet continuity. 

[caption id="attachment_24694" align="aligncenter" width="225"] Rossie: the perfect dog[/caption]

Wanting to be a good person, I opted to get a rescue from the SPCA and chose a lovely mixed breed something named Lucy. The entire adoption process cost me about R800  as the SPCA sterilise and vaccinate the pet too.  Lucy arrived home on a Thursday  and by Saturday there was a dog fight. Rossie ended up at the Vet. With after hours rates his treatments for his bites including meds were R2.5k. He is not on pet medical aid because he has had a very good track record and in most cases m