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Post by t0xicn1nja on Oct 12, 2015 1:27:50 GMT
What is a good trading platform to use for someone who's just starting to get into 'investing' and won't be trading all the time, just a few times a month? I'm Canadian, so I'm limited I assume, and a few friends of mine use Questrade, but I'm not really sure of a few things.
How much money should I have before opening a margin account (at the minimum) I'm guessing it's a few thousand? Should I open a separate bank account and fund that account just for investments, or should I just keep everything in my personal bank account? How do I pay taxes on stocks I purchase, do I have to pay taxes at all on the purchase, or only on the money I actually 'gain' from the stocks? What's the tax % in Ontario Canada for the gains on stocks anyways? If I don't have a full time job, (student), can I still open a brokerage account, or will they deny me?
The hypothetical scenario you can apply for me is this: (in terms of how much tax is paid, what the gains are, and that stuff)
Company XYZ makes a cure for cancer, their share was $50 / piece and I bought 100 of them, for $5,000 the week before their announcement to see if it worked or not.
The day of the announcement the share price climbs to $75 / piece.
These are just a few questions I have, I'll have more after I get some answers to these. Looking to get into this as soon as possible, and I've got access to money quite easily, so help me get started guys!
- t0xicn1nja
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scandinaviabrah
New Member
Oh hi! Didn't see you there, wagecuck.
Posts: 20
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Post by scandinaviabrah on Oct 12, 2015 1:56:53 GMT
General rules: You pay taxes of dividends and the capital gain (eg: the increase in share price). Look up capital gain tax. 25x100 = 2500 in taxable income edit: www.moneysense.ca/taxes/capital-gains-explained/ some info on canadian capital gain tax and some info
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Post by rephrain on Oct 12, 2015 2:13:26 GMT
If you don't have one open a TFSA (tax free savings account) on whatever online broker or directly at your bank. Find the broker with the least fees for the type of trading you will be doing. This depends on the frequency and size of your trading. For most banks and online brokers there is no minimum capital to invest, nor is there academic pre-recs. As long as you are investing for yourself and claim to understand what you're doing and the risks they will accept. TFSA is unique to Canada and with it you can invest up to 41,000$ with all future gains tax free.
If you have over 41k$ you can still place 41k$ in a TFSA and the rest in a normal investing platform. If you wish to trade options or futures you must mention this too. This should take no more than a week or two to set up with your broker of choice.
Did I mention it's tax free? :^)
Edit: The limit was 5.5k$ per year going back like 5-6 years but as of 2015 it is 10k$ per year. That's 41k$ limit this year but going forward 4.5k$ more per year. My bad. Edit2: Your broker knows the limit just ask. It's about 41k$. I suck.
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Post by t0xicn1nja on Oct 12, 2015 2:34:23 GMT
Okay so basically if I invested all that $41,000 into the cancer stock, at $50 / piece (820 shares) and it become $75, so $25 more, which means the investment is worth $41,000 + $20,500 = $61,500 I won't get taxed on any of it? So basically the first $41,000 I used doesn't get taxed, but if I spent let's say $50,000, the $9,000 / $50 = 180 stocks x $25 = $4,500 I made more, would be taxed right?
So in total, I'd pay taxes on only $4,500 and get to keep my $20,500 tax free?
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Post by rephrain on Oct 12, 2015 2:36:36 GMT
Sounds about right. But note that you the 41k$ and the 9k$ will be in separate investing accounts albeit possibly with the same broker. That means you will pay fees on 2 transactions. That's the only downside.
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Post by t0xicn1nja on Oct 12, 2015 2:40:21 GMT
I see, so instead of paying $10 once, I pay $10 twice, k, I got it! Thanks!
Anyone else wanna answer the other questions too thanks!
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Post by rephrain on Oct 12, 2015 2:43:20 GMT
Eh, I wouldn't open a margin account if you have the money. Even if you didn't I wouldn't invest on margin tbh. Send the money you have into the account.
As for the broker choice I went with CIBC's Investors Edge. 7$ fee, good online brokerage, real time quotes, all I need.
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Post by t0xicn1nja on Oct 12, 2015 2:54:08 GMT
That CIBC Investors Edge looks interesting, and there's a CIBC near me! Is there a minimum amount of money I need to fund the TFSA? So if I put money into the TFSA, let's say $1,000, then can I use the $1,000 to buy shares using Investors Edge, or do I have to transfer the money out of my TFSA into a 'broker' account before using it?
Also, I'm currently with TD Canada Trust and PC Financial, so do I have to have a CIBC bank account to trade with Investors Edge, or can I do it with any bank account?
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Post by angusburger on Oct 12, 2015 4:03:09 GMT
Do you gauge whether you will need to make a donations to put you in a better tax bracket?
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Post by t0xicn1nja on Oct 12, 2015 4:07:40 GMT
Do you gauge whether you will need to make a donations to put you in a better tax bracket? what do you mean
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Anonymous
New Member
i aint got no money namsayin?
Posts: 41
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Post by Anonymous on Oct 12, 2015 5:39:12 GMT
Robinhood is fairly straightforward and easy to work with.
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Post by t0xicn1nja on Oct 12, 2015 6:01:06 GMT
Robinhood is fairly straightforward and easy to work with. But I'm Canadian so I can't Robin Hood
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Anonymous
New Member
i aint got no money namsayin?
Posts: 41
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Post by Anonymous on Oct 12, 2015 6:02:48 GMT
Ahh...Well then I've got nothing.
Sorry.
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Post by t0xicn1nja on Oct 12, 2015 6:06:14 GMT
Ahh...Well then I've got nothing. Sorry. Iz k men, Canadian problems lol
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Post by rephrain on Oct 12, 2015 17:52:46 GMT
No minimum funding, you open the account and you transfer money into it, like you would to a CC or savings account. If you already have a CIBC account it would speed things up. We got a lot of paperwork in Canadia though so expect a visit with an advisor (30-45 mins) assuming you have an account with them.
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Post by rephrain on Oct 12, 2015 17:57:44 GMT
Oh and yeah, you trade directly from the TFSA. Once you transfer the money you have a TFSA cash balance to buy stocks with. I use online trading for most orders cause CIBC's website is best in class.
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Post by t0xicn1nja on Oct 12, 2015 17:58:30 GMT
I have an account with PC Financial, so I'm sure they should be able to access it since PC is part of CIBC anyways, alright I'll have a chat with them this week! Thanks for the helps reph
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jeddy
New Member
Posts: 9
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Post by jeddy on Oct 12, 2015 21:52:32 GMT
Figured I'd put in a random bit of information here. If you exercise the options of investing by becoming a registered shareholder with the company itself, you get certificates issued to you directly without paying any commissions. The downside to this is you'll have to wait a certain period before you get the shares and it's not an instant buy (unlike with brokerages online where you can buy and sell at the price you want and it will settle in three days). If you go the Optional Cash Purchase / Dividend Reinvestment Plan with companies you can take your certificates for the shares owned and then deposit the certificate into your TFSA account with your bank (but keep at least one share in certificate form so you can continue to do purchases like this.) This is what I plan to do once my initial shares come in from the mail because tbh I like to save what money I can. The $9.95 or $6.95 with CIBC is small but if I continuously invest small amounts of money over time ($100 a month every paycheque for example) I'd rather not get charged by the trade.
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Post by agora on Oct 12, 2015 23:44:39 GMT
You should try optionhouse, it has no minimum deposits and transaction fees are 4-5 dollars. You are limited; however, that you can't buy certain etfs for some reason but if you are trading stocks you should use it although I don't know if Canadians can use it
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Post by uplade3 on Oct 12, 2015 23:59:39 GMT
Do you gauge whether you will need to make a donations to put you in a better tax bracket? what do you mean Sometimes if you donate certain amounts to certain non profits, it will but you in a different tax bracket and you pay less money on taxes.
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