Hey guys,
I start my first job next month out of university and I'm seeking advice about reaching financial independence as efficiently as possible. I'm struggling between which of the following investment routes to take:
1. max my contributions to an RRSP (I live in Canada)
2. use my TFSA and follow a non-registered investment plan (I'm a Canadian boy).
Here's my dilemma:
RRSP contributions will reduce my taxable income, enabling me to generate money faster, and allow me to borrow up to $35,000 (interest free) for a down payment on a home. However, this money will be largely inaccessible until I retire, where it will then be taxed at the marginal rate by whatever amount I withdraw annually. I know it's an incredibly efficient method, but I feel it places a barrier between using those funds for investments down the road (owning rental property, stocks, bonds, etc.).
TFSA contributions on the other hand are not tax deductible, meaning it will take longer to collect money. On the plus side, I can move this money as I please since it has already been taxed, meaning I can keep it invested in stocks and collect dividends as money in my pocket instead of money for retirement like the RRSP. I'd also like to generate income from rental property in the future, so this money would be available to help with purchasing property.
I'm an engineering student whose primary investment knowledge comes from a course on retirement and estate planning at my university. I'm new to the FIRE movement and to work-life in general, so I'd really appreciate hearing from those with experience on what road I should consider.
Thanks everybody!