I Opened An FHSA! My First Home Savings Account Investment Strategy

Рет қаралды 13,474

Күн бұрын

I’ve officially opened up an FHSA, or a ‘First Home Savings Account’, aka Canada’s newest registered investment account. In case you missed it, in April 2023 the Canadian government launched this new account to help people with saving for their first home.
Now, last year when this account first launched, I wasn’t in a place with my money and investing journey to open one up - I was still working on maxing out my TFSA, first. I officially was able to max out my TFSA a few months ago, so I'm now ready to open up a new investment account - aka, the FHSA! In this video I'll break down why I'm opening up an FHSA, what I'll be investing in within my FHSA, and other investment options you could consider, too.
0:00 I opened up an FHSA!
1:25 Why am I opening an FHSA?
2:55 How long will my money be invested?
5:23 What are the best FHSA investment options?
7:40 What investment option I’m choosing
10:11 Open up my FHSA with me
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@stephandden 3 ай бұрын

I'm so excited to have finally opened an FHSA 🥳 What account are you using to invest right now? Let us know!

@bestbongoman2697 3 ай бұрын

The ability to transfer the funds in your FHSA to your RRSP is huge. Even if you don't plan to buy a home you are essentially getting 40K of extra RRSP room (assuming you max out your FHSA).

@rochester3 3 ай бұрын

yep, and you can also transfer rrsp to fhsa aswell

@stephandden 3 ай бұрын

It is huge! Definitely a benefit 😊

@FillupOnSilver 3 ай бұрын

Great videos Steph and Den and/or Den and Steph. I opened FHSA with EQ & Wealthsimple. Didn't contribute in 2023 but will split up 16000 for 2024 between them. I never owned house or home and am 67 and have not much time left but who knows. I still work full-time and collect pensions, so it's never too late or too early for anyone, yes! Keep up the great videos learn so much from them.

@stephandden 3 ай бұрын

Thank you so much for this comment! We love hearing this - it's so true that it's never too late or too early for anyone! 😊

@AmandaCorcoran-cr8gz 3 ай бұрын

Great video!! my husband and I opened 2 FHSAs in our separate names to benefit our money to grow to $80,000 CAD rather than just the $40,000 limit

@matcha_mage 3 ай бұрын

Love this! Would love updates on this too and how you plan on switching up your investments after the 4 months

@stephandden 3 ай бұрын

Thank you! Good suggestion - I'll definitely share updates + do a video when I switch up my investments later this year! 😊

@HouseOfBurgz 3 ай бұрын

FHSA account is a great hybrid between a TFSA and RRSP. I do also agree on the sentiment that the limit should be increased. Hopefully one day it will be raised to 100K. Until then keep stacking and keep going! 🍊

@stephandden 3 ай бұрын

Agreed, it is a great hybrid - it would be amazing to see a higher limit. 😊

@avijeetkumar3733 3 ай бұрын

Did you guys start your research on which area/city you want to look for buying the investment property ? As my own investment strategy is similar - where due to high cost of housing(extreme housing valuations under a slow growth economic future ) in GTA I don't want to get into the market right now for my primary home, but in a year or two I will enter market for an investment property. As that is not going to be primary home, hence I am planing to user HBP from RRSP for down payment while letting my FHSA grow.

@bavnathan7518 3 ай бұрын

You should consider a house hack instead. Use FHSA as it’s a primary residence and then rent out the basement while living in it. Helps to get a larger mortgage, make payments and also use the FHSA all in one (also don’t need 20% down payment)

@stephandden 3 ай бұрын

Thank you for sharing 😊

@LamsLam-n6f 24 күн бұрын

Great Video! Thank you for the valuable FHSA information. However it drives me crazy to see US$ images in your illustration when you are talking about Canadian Finance. You are not the only one though!

@aviralsharma9264 3 ай бұрын

One thing to consider is the tax deduction you get..thats like getting a 20%+ return depending on your marginal tax rate. So anything on top of that, GIC with 4-5% is perfect for someone looking to buy in 2-3 years and having a partner contributing in their fhsa.

@stephandden 3 ай бұрын

The tax deduction really is an amazing perk! Thank you for sharing this 😊

@rochester3 3 ай бұрын

they should increase the limit to 100k

@stephandden 3 ай бұрын

That would be great! 👀

@rochester3 3 ай бұрын

@@stephandden it only makes sense because of how expensive house prices are, 40k is simply not enough especially after 5 years when inflation will be higher

@petermozuraitis5219 3 ай бұрын

There’s lots of ways to help get that first down payment though. If you have a partner then you can also use their FHSA on a down payment, essentially doubling it;also 40k is just the contribution, if you have 40k invested for 5-10 years that could create thousands more. Using your RRSP, you can get RRSP contribution space back if it’s used on a home down payment and you pay it back within 15 years. Liquidating some TFSA investments, a few thousands dollars cash. All these small steps add up It be great if they expanded max contribution to 50k or more, but it’s just one more tool to help afford a home

@TaliyahP 3 ай бұрын

a 40k limit in this country in actually hilarious

@rochester3 3 ай бұрын

@@petermozuraitis5219 I think the first time home buyers for rrsp is the stupidest thing the government can do for Canadians and since they’re borrowing their own money and have to pay it back on top of having to take care of the mortgage and property taxes now a new loan back to your own account🙄 making things more stressful , that’s why I want 100k for fhsa so we get the tax deductions and when it’s time to buy a house we don’t have to worry about having to pay back anything.

@nemoa7692 3 ай бұрын

I have an FHSA with TD they gave about 8% in four month so I'm possitive about them. Howevrr, I do manage my own TFSA.

@stephandden 3 ай бұрын

Love that you’ve opened one! 😊

@Jibril_Abdulkadir 3 ай бұрын

I think it’s great idea to have one savings account just for things you want in the future like the FHSA and another one for a rainy day quote unquote

@stephandden 3 ай бұрын

Agreed, it's great to having savings for different things (ie. an FHSA to save for a home, a HISA to keep your emergency fund, a HISA for other short term savings, etc) 😊

@jacobanderson8744 3 ай бұрын

Are you able to purchase a duplex with an FHSA? Live in one side and rent out the other?

@LamsLam-n6f 24 күн бұрын

Great Video. Thank you very much for the valuable information. However it drives me crazy to see US$ images in your illustration when you are talking about Canadian finance. You are not the only one though!

@joshuahankins2613 3 ай бұрын

You can buy a duplex, Triplex and Four Plex though if you will live there. If you both willing to leave Toronto could probably afford a duplex in 2-5 years and live in one unit.

@binibinikki 3 ай бұрын

Also, i heard you talk about this, but just to clarify, can I buy my first property as an income property not using my fhsa. but use my fhsa in let’s say 15 years from now to buy a residential property for me to live in. if so, would that be ideal? generally in your opinion. Thank you so much!!! i must say I’ve learned more from this channel about investment and finance than any financial advisor I’ve ever met. You guys are doing the Lord’s work. More power, and please don’t stop making these videos🩵

@con_rad_it_is Ай бұрын

Hi.. i have a quick question.. i have an fhsa with 8k in it.. now when i invest that 8k it will earn some interest.. the interest earned will add to the 8k limit.. so now the amount is my fhsa is over 8k.. is that ok? or should it be 8k including interest?

@con_rad_it_is Ай бұрын

Also, at year end assuming i have 8100 in fhsa (100 is the interest earned)...now for the new year do i get a fresh 8k limit or would it be 7900 (reducing the interest earned)? Thanks!

@binibinikki 3 ай бұрын

Steph, do you know how long do you have to stay in a home you purchased with FHSA, until you can use it for income property/rent it out? I asked my banker, and they dont know 😅

@elianorkhoury508 Ай бұрын

I have the same question. What if I buy a house with FHSA, live in it, then I got a job offer abroad. Can't I still rent it?

@swaggyg6017 3 ай бұрын

Hey guys, just to confirm, I can open a FHSA thats still eligible even if i bought a rental already right? Because i didnt live in it and rented it out, it doesnt count as my first home (qualifying home)

@stephandden 3 ай бұрын

Yes - for the FHSA, a 'first time home buyer' means that you haven't lived in a qualifying home as your principal place of residence at any time in the past four calendar years (you can't have lived in a home that your spouse or common-law partner owned during that time, either). 😊

@ahStarwok 3 ай бұрын

If my TFSA is not maxed yet, would it still be recommended to invest into FHSA? Or max TFSA first like you did?

@stephandden 3 ай бұрын

It's up to you and your personal goals! The FHSA is great given that you still get tax free growth and it also reduces your taxable income at the same time - and, if you don't end up using the money to buy a home, you can transfer it to your RRSP, instead. On the other hand, FHSA contribution room only carries forward for a limited amount of time, so if you open up an account, you ideally want to ensure that you'll be able to max it out each year. The other thing to consider is what you want to focus on investing for - I finished maxing out my TFSA first because 1) I was really close to hitting that goal, and wanted to check it off my list, and 2) my main priority is investing as much as possible for the long-term, so I wanted to 'finish' investing for that purpose first, before moving on to investing for a future home. I hope that helps 😊

@GarethBushMusic 3 ай бұрын

XEQT is my biggest holding, but Ive been using the FHSA more conservatively with the $CASH ETF, like a GIC but with more liquidity. If your time horizon to buy is 3 years or less it's probably unwise to invest it in equities. 5 years is a different story!

@stephandden 3 ай бұрын

Thank you for sharing! 😊

@Oliviabaileys 3 ай бұрын

What is the point to open rhsa if you can carry on investing into TFSA? What if in 5 years you decide not to purchase a house…?

@stephandden 3 ай бұрын

My TFSA is maxed out right now, so I can't continue investing within it (until the yearly contribution room is added next January, which will be a capped amount). The FHSA also gives you the same benefits of the TFSA (tax free growth) AND it reduces your taxable income for the year - the benefits are even better from that perspective. If I decide note to purchase a house, the money within my FHSA can be transferred to my RRSP, instead. 😊 There's really no reason not to open up an FHSA and take advantage of the perks!

@hornedlobster 3 ай бұрын

Can you guys do a video comparing using RRSP vs TFSA for saving for a down payment? Obviously the FHSA would be the first choice. But once that is maxed out we're not sure which one to use. We love the flexibility of the TFSA, but the Tax benefits and HBP of the RRSP are really nice too!

@stephandden 3 ай бұрын

Yes! We have a video about this exact topic coming out in a few weeks 😊

@kristinlynn2763 3 ай бұрын

Hi what does HBP mean? Thanks

@hornedlobster 3 ай бұрын

@@kristinlynn2763 Home buyers Plan

@hornedlobster 3 ай бұрын

@@stephandden Oh great! I'll keep an eye out for it :)

@danlaj6157 3 ай бұрын

@@kristinlynn2763Home Buyers Plan

@SeanStephensen Ай бұрын

Are you sure it's possible to buy a rental property while still building an FHSA? I heard that if I own a house, I'm no longer eligible to own or contribute to a FHSA. This was told to me on Reddit, so take it with a grain of salt. If you're able to confirm that the opposite is true (I am allowed to buy an investment house while maintaining a FHSA), that would be awesome! That was my thought as well.

@glen1742 3 ай бұрын

If i plan to purchase a condo in 2 years time would a GIC be better?

@petermozuraitis5219 3 ай бұрын

There are FHSA GIC’s available, it wouldn’t be earth shattering money over two years but every little bit adds up and helps

@glen1742 3 ай бұрын

@@petermozuraitis5219 thx!

@hornedlobster 3 ай бұрын

That's what my wife and I are doing. Putting $8000 each into an FHSA, and putting that money directly into a 1 year GIC. With the 5% interest rates you'd make about $400 per year. It's not amazing, but every bit helps. And who knows where the market will be in a couple years. If you're looking to buy in the short term (

@stephandden 3 ай бұрын

They could be! We agree with the other comments on this thread - it's low risk, potentially low return, but everything helps 😊

@petermozuraitis5219 3 ай бұрын

When does the FHSA contribution limit increase ? I opened one last month (March 2024) figuring I’d own a home within 15 years so just opening an FHSA and allowing contribution home to expand is a smarter than not

@rochester3 3 ай бұрын

its a maxx of 40k after 5 years it doesn't go up higher than that

@petermozuraitis5219 3 ай бұрын

@@rochester3Yes, at 8k a year. Do you know on what day the contribution room expands ? January 1 of each year ?

@rochester3 3 ай бұрын

@@petermozuraitis5219 has to be the first since contribution room doesn't extend to the next year, its not like the rrsp whre you have till end of February 29 so its 16k room now

@stephandden 3 ай бұрын

You gain new contribution room each year (after you open your account) on January 1st! Remember that you can only carry forward unused contribution room for one year. So, if you don't contribute the full $8,000 this year, you can still contribute it next year (on top of the new $8,000 contribution room added) - but, in 2026 (two years later), you would no longer be able to catch up on that initial $8,000 (or whatever amount of that you didn't max out). If you want a better explanation, check out our video called 'FHSA, Explained...' 😊

@NoahBClark 3 ай бұрын

As an American WTH 😭I’m looking everywhere for some alternative but might need to just settle on using my HYSA.

@stephandden 3 ай бұрын

Ah I know!! This account is new in Canada (it just launched last year!), but it is nice to have now. A HYSA is definitely an option in the US, or potentially a brokerage account if you won't be buying a home for a longer period of time!

@87hcm 3 ай бұрын

If you're buying a non-primary residence property first, how can you use an FHSA? That would be your second property, no?

@stephandden 3 ай бұрын

The definition of a first-time home buyer for the FHSA specifically is if you haven’t lived in a home you owned for the past four years - so, if you never live in the non-primary residence, you’re still able to use the FHSA for a primary residence!

@con_rad_it_is 2 ай бұрын

i have an fhsa in cibc.. but now i want to move the money to my new fhsa account and close the one in cibc.. any idea if that's possible?

@stephandden 2 ай бұрын

Yes, you can definitely move it. 😊 As long as your new FHSA is open already, then you can do a direct transfer between both accounts. Which company or bank did you open the new one with? You might be able to initiate the transfer from their end which would make things even easier.

@con_rad_it_is 2 ай бұрын

@@stephandden I got opened it with wealthsimple.. Once I transfer I'm planning to close the one with cibc

@con_rad_it_is 2 ай бұрын

@@stephandden Thank you! i opened it with wealthsimple.. once i transfer the money i'll be closing the one with cibc.. hope there wont be any issues with closing that one either..

@larkspurking8140 5 күн бұрын

@@con_rad_it_is May I ask you why you decided to close FHSA with CIBC? Cibc advisor just convinced me to open one with them like a week ago, so, I would really appreciate any feedback

@autobotdiva9268 2 ай бұрын

wonder if they have something like this account in america. better check for my 22 year old

@stephandden 2 ай бұрын

I don’t think they have an equivalent account, although hopefully there will be one in the future! It’s a nice addition 😊

@wilsonfidelisekpotu1980 3 ай бұрын

Thanks @stephandden. Please, do you think it is possible to move or pivot from a managed account to a self directed account that enables me to buy XEQT with wealthsimple, or can i open another another TFSA account for self-directed investing even if I have an existing TFSA account.

@stephandden 3 ай бұрын

Hey! Yes, you can move your funds from your managed TFSA into a TFSA on Wealthsimple Trade. You should check out our video (‘Wealthsimple Invest Portfolio Results After 3 Years’) where Steph goes through the entire process. Hope that helps 😊

@riasat001 3 ай бұрын

but do you pay tax when you take your money out?

@stephandden 3 ай бұрын

No! You withdraw tax free as long as you're using the money to buy your first home 😊

@riasat001 3 ай бұрын

@@stephandden okey thanks. I own a house even before I got married. Now my wife is not in the title and doesn’t own a house. Would she use FHSA?

@Vantaa815 3 ай бұрын

I would personally feel uncomfortable leveraging myself so heavily with housing (buying an income property followed by your own house). Housing in other cities may seem "cheap" compared to Toronto; but they are not cheap compared to their historical averages. With the way that many Canadians are already struggling with housing I don't think you will be able to sustainably increase rent YoY (my rent is not increasing this year) and you are taking a lot of downside risk in case of a recession (price of your home) or a shitty tenant costing you thousands to evict. Just my two cents :) Good video!

@stephandden 3 ай бұрын

Thank you! + thanks for sharing what you would be comfortable with 😊 We’ll share more about what we end up doing in future videos!

@hornedlobster 3 ай бұрын

Right! With the price of housing right now we'd be spending approx 50% of our take home pay on housing. We're currently spending about 15% while we rent. That means we'd have 35% less income to invest, less money for family vacations, less fun date nights. And of course the massive responsibility of home ownership. No thanks!

@SargentFraser 3 ай бұрын

Last year, I invested my first 8K on a relatively safe Canadian bank dividend stock, which should return at least 7% annually with DRIP. The rest of my investments is going to growth stocks. I was thinking between VFV or XEQT, but decided VFV. I might reallocate later. So far, with the $8000 from the first year, I'm getting around $52 every month, with it slowly growing more and more as I reinvest in that same dividend stock. Each year I should get more than 600$ from that, so even if VFV drops 10%, the dividend stock helps me negate that. If I purchase a house, I think it'll be in 5 years at the earliest (although I am in no rush).

@stephandden 3 ай бұрын

Thank you so much for sharing (+ that sounds like a great plan). 😊

@TelosBudo 2 ай бұрын

Don't you actually have $16,000 contribution space in 2024, not $8,000, given your 2023 FHSA contribution was $0.00, and the FHSA account is retroactive and you were over 18 years old in 2023, when the FHSA account launched?

@yeahhi3207 2 ай бұрын

Unlike a TFSA, your FHSA contribution space starts the year you open your account, not when the FHSA launched.

@EricMoore790 3 ай бұрын

She is cute

@MinnieOnCam 3 ай бұрын

I opened my FHSA in 2023, deposits started in 2024. The tricky part was having it opened as a Segregated Fund. Luckily my financial planner found me one at Equitable Life, but said Beneva has better investment options. The reason my investments are segregated funds they are what ODSP sees as an exempt asset upto $100,000 that allow me to remain eligible. I hate having to worry about what ODSP thinks in my financial planning, but I'm rare many people on disability don't work so they don't invest. which is sad if they are disabled young they are missing out on all the compound growth.