1. DarrenHull;iStock
E
veryone loves the thrill of a good race, and small investors are
no different. That’s what inspired MoneySense to launch the
inauguralGreatTFSARacelastyear.Itwasdesignedasacontest
to see who has grown their investments the most since 2009,
whenTax-FreeSavingsAccountswereintroduced.Becauseev-
eryone who was 18 or older at the time had exactly the same
amount of contribution room—$31,000—it was a fair fight.
To find our winners, we went in search of investors who made big bets
to grow their contributions into much more. How much more? Well, between
the two of them, this year’s winning husband and wife team grew their in-
vestments into more than $1 million!
Anyone in the country could enter, and of the 60 or so Canadians who did
so this year, we selected the six with the biggest balances as of October 31.
If you love gutsy stock plays,
you’ll enjoy reading about the
TOP SIX WINNERS of this year’s
Tax-Free Savings Account contest.
Their investment strategies will
amaze you—and inspire you, too
INVESTING
➤
JANUARY 2015 MoneySense.ca 45

2. 46 MoneySense JANUARY 2015
PhotographbyDarrenHull
TOTAL
TFSAs
Inthepagesthatfollow,ourwinnershappily
reveal their strategies and the endgame
they’ve planned for their TFSA money.
Some, like Rick and Maureen O’Hanley
Doucette of Kelowna, B.C., are aggressive
risk-takers who held thousands of shares
of only one penny stock for the entire six
years. Others, like Nita Sproule of Calgary,
are slow and steady investors focused on
buying large-cap value stocks.
Just keep in mind that their TFSAs are a
small part of their total portfolio—often
less than 10%. So they’re comfortable tak-
ing big risks with the knowledge that they
have safer investments in their RRSPs, com-
pany pension plans or non-registered ac-
counts. “Still, in many cases, the bigger risk
is simply keeping your TFSA money sitting
in cash or GICs and forgoing growth, some-
thing that 80% of people who contribute
to TFSAs do,” says Jason Heath, a certified
financial planner in Toronto. That’s why
Heath recommends that TFSA investors
hold high-growth or income-generating
assets to take full advantage of the tax break.
We hope you’ll be inspired by these suc-
cess stories. But remember that any invest-
ment with the potential for huge returns
also comes with a lot of risk. Before you try
any of these strategies in your own TFSA,
do your own research, review your short-
and long-term goals and consider talking
over your plan with an adviser.
INVESTING
RICK
$516,297
$509,784 MAUREENRick Doucette // 47 // AND
Maureen O’Hanley Doucette
// 46 // KELOWNA, B.C.
INVESTMENT STRATEGY
All-in on one penny stock
When the government introduced TFSAs
in 2009, Rick Doucette and his wife Maureen
decided to try for big gains in that account.
Their opportunity came in 2010 after the
couple talked with a close friend who had

3. JANUARY 2015 MoneySense.ca 47
PhotographbyAnia&TylerStalman;ErikPutz
$262,000Shafik Hirani // 43 // CALGARY
INVESTMENT STRATEGY
Betting big on unlikely events
Shafik Hirani’s TFSA strategy is unusual and complex, but it allowed him to hit
the jackpot. In fact, the senior executive financial adviser at Investors Group
Financial Services in Calgary admits that his TFSA has always held speculative
investments. “I trade what I call black swan opportunities,” says Shafik.
The term black swan—made famous in a 2007 bestseller by Nassim Nicholas
Taleb—refers to a major event in the markets that would have been all but impos-
sible to predict. Taleb suggested investors could profit from black swans by mak-
ing small wagers that were likely to pay off big. “It involves keeping most of your
money ultra-safe, but using just a small portion—say 10%—for speculative bets
whose prices will soar during a market panic,” says Shafik. “I like to keep these
bets inside my TFSA, as it’s easy to measure your returns that way.”
In 2012, Shafik bought Yellow Media (TSX: Y), a communications
company on the verge of bankruptcy. “I knew it would either go broke
or do a consolidation,” says Shafik. “I thought it would consolidate
and had an exit strategy ready. I won.” The company’s stock price tripled
in a matter of months, bringing his TFSA total to about $60,000.
In early 2013, he invested in Fannie Mae (OTCBB: FNMA), the
beleaguered U.S. mortgage finance company. “I bought
Fannie Mae stock for 60 cents and sold it for close
to $6 a share in February 2014, a few months
before it crashed back down to $1.50.”
In early October, Shafik turned bearish—he
took the $138,000 in his TFSA and essentially
shorted the U.S. market. Although you are not
allowed to take short positions in a TFSA, you
can use exchange-traded funds designed
to go up when the markets go
down. Some of these ETFs even
use leverage to magnify your
gains or losses. Shafik bought
the Direxion Daily S&P 500 Bear
3x Shares (NYSE ARCA: SPXS),
which spiked in mid-October. His
TFSA sat at a hefty $262,000
on October 31.
“Theseareallspeculative
bets that have absolutely
no basis in sound financial
planning,” Shafik admits.
“It’sgamblingand,frankly,
I should have zero in my
TFSA. But when it comes
to investing, I’d rather be
lucky than good.”
Turns out the luckiest
one of all may be Shafik’s
four-year-old son Adrian.
“He’s the love of my life
and I don’t plan to touch
a penny of this money for
myself. It’s all for him,”
Shafik says.
been given the task of managing a company
on the verge of bankruptcy. “The company
was at death’s door, but we felt it would
survive,” says Rick, a financial adviser in
Kelowna, B.C. “So we decided to buy in.”
Kelso Technologies Inc. (TSX: KLS) was
a tiny company that desperately needed
cash, but it had great leadership. Rick and
Maureen spent time researching the prod-
ucts Kelso developed, including new tech-
nology and safer products for rail tank cars.
“The rail industry hadn’t changed much
in over 70 years,” says Maureen, who runs
her own communications company while
raising the couple’s three young kids. “The
industry was due for a regulatory overhaul.”
Thecoupledecidedtobuy100,000shares
at 10 cents each. They also bought 50,000
warrants that gave them the right to buy
additional shares at 17 cents. (Warrants are
similar to stock options: they give an in-
vestortherighttobuysharesataprede-
terminedpriceforasetperiodoftime.)
These warrants proved key to helping
the Doucettes build their wealth, both
inside the TFSA and out. “When the shares
were worth 18 cents we transferred $5,000
worth into our TFSAs and paid the tax on
thecapitalgains,”saysMaureen,whose
TFSA today holds only Kelso stock.
Asthestockcontinuedtoclimb,Rick
and Maureen transferred as many
shares as they could into their TFSAs.
The 2013 rail disaster in Lac-Mégan-
tic reinforced the need for Kelso’s prod-
ucts, and 2014 brought a further boost
to the stock price when it was listed
on the NYSE MKT (a U.S. exchange
for small-cap stocks).
By October 31, 2014, Kelso shares
were trading at just under $6.53 per share.
Rick has 79,100 shares in his TFSA while
Maureen has 78,100, so their account bal-
ances were $516,297 and $509,784, respec-
tively. The couple firmly believes the com-
pany will eventually be bought out and
they’re determined to hold on to all of their
shares until then. “We believe Kelso has
the potential to climb to $25 a share,” says
Rick. “We’re patient and will wait.”
In three years, the couple plans to di-
versify their TFSAs and switch to income-
producing stocks and mutual funds, while
keeping an eye out for other high-growth
opportunities. In the longer term, they have
big dreams for their TFSA money. “We ul-
timately plan to transfer a portion of the
money we get from the sale of our Kelso
shares to a charitable foundation that we’ll
manage ourselves,” says Maureen. “That’s
what we’re really looking forward to now.” ➤
TOTAL
TFSA

4. 48 MoneySense JANUARY 2015
PhotograpbyJohnLondoño;iStock
Philippe Bergeron-Bélanger has a big goal for his TFSA: he
wants to reach $1 million by 2020. The accountant and
master of finance student at the University of Sherbrooke
came late to the game, opening his TFSA in June 2013 with
an initial investment of just $12,000. On the recommenda-
tion of a friend, he bought a small mining exploration
company called Nevado Resources Corp. (TSX Venture: VDO).
“That was a mistake,” he says. “I bought first and did my re-
search later. I soon realized the company had no expectations
for revenue or profits any time soon. So I sold it a month later
for about the same price. That’s one of my strongest traits—I
don’t waste time praying for losing stocks to go up.”
Philippe then used all his TFSA contribution room to bring the
account up to $26,000 and started investing in nano-caps—stocks
with less than $50 million in market capitalization. “That is my
playground,”hesays.“Ibelievecertainnano-capsarewayundervalued
given their growth prospects. Institutions can’t buy them because they
are tiny and illiquid, but after the stock doubles or triples, it will pop
uponthescreensofinstitutionalinvestorsandmoney
will flow in and drive the stock price even higher.”
Before buying anything, Philippe ensures
a company’s growth is sustainable, that it
has a good product or much-needed ser-
vice, and solid management. “And I
always talk to the CEO before buying
the stock.” Nano-caps are often
ignored by analysts, so investors
have to rely on their own re-
search. “I work hard to find op-
portunities that could reward me
with a 500% to 1,000% return over the next
three to five years,” he says. “Maybe you’ll
find only two or three a year, but when you
do find them, I believe you should concen-
trate your money in them.”
In July 2013 he put $6,000 into the phar-
maceutical company BioSyent (TSX Venture:
RX) at $1.53 a share and he sold them for
$9.42 this past September—a 510% return
inroughly14months.Healsoinvested$6,000
in XPEL Technologies Corp. (TSX Venture:
DAP.U), which makes automotive paint and
other products. He bought shares at 46 cents
in2013andlastsummerboughtmoreat$1.73.
XPEL is now selling for more than $3.
Philippe insists he’s not an active trader:
when he finds a good opportunity, he takes
a position and waits. And who can argue
with the results? “I’m sure a lot of other
people have higher balances than me, but
I think I managed to build my TFSA fairly
quickly and don’t intend to stop now.”
INVESTING
$86,300
Milan Gonda // 26 // EDMONTON
INVESTMENT STRATEGY
Concentrates on one
stock at a time
If there’s one thing you can say
about Milan Gonda it’s that he
doesn’t invest in anything he
doesn’t understand. But when
he finds a stock he likes, he’s all-
$88,062
Nita Sproule // 43 // CALGARY
INVESTMENT STRATEGY
Large-cap value opportunities
Nita Sproule, a 43-year-old stay-
at-home mom and part-time IT
worker in Calgary, remembers
the2008–09collapseofthestock
market like it was yesterday. “I
saw value everywhere after the meltdown,”
says Nita. “That’s when I started looking
for value stocks.” Her first was AltaGas Ltd.,
(TSX: ALA), a natural gas, power and utility
company. She bought 350 shares at $15:
they were worth over $45 at press time. “I
still have those in my account.”
In 2010, Nita bought AutoCanada (TSX:
ACQ), a company that invests in car dealer-
ships across the country. It was a MoneySense
Top 200 pick, and Nita bought 1,200 shares
at $5 each. She sold 800 at $22 in May 2013
for a 400% gain. The company was trading
at $59 a share as we went to press. “In hind-
sight, I should have held on to all the shares
and sold everything at its high of $90 this
past June. But on the bright side, I still own
400 shares that are now almost 12 times
higher than the price I bought them at.”
Nita owns six other stocks as well, in-
cluding Canadian Oil Sands (TSX: COS)
and Encana (TSX: ECA). Her most recent
purchase was Teck Resources (TSX: TCK.B).
“I’m generally a value investor, but I can
be swayed over to growth,” says Nita. “At
my core, I’m a buy-and-hold gal and look
for long-term value.”
That’s the opposite of her husband Ian’s
approach. “He’s always looking for that
home run with his penny stocks, and I have
about four times more in my TFSA now
than he does,” says Nita, who hopes to use
her TFSA money to build the couple’s dream
house one day. “So I hope his TFSA catches
up with mine soon. I’ll get my new house
all that much quicker.”
TOTAL
TFSA
$100,021Philippe Bergeron-Bélanger // 27 // MONTREAL
INVESTMENT STRATEGY
Looks for high-growth nano-caps

5. JANUARY 2015 MoneySense.ca 49
iStock
in. “I’m highly concentrated in my stock
buying,seldomowningmorethanonestock
at a time,” says the aerial sensor operator
in Edmonton.
In fact, Milan has owned just three stocks
in his TFSA. He analyzes stocks both fun-
damentally and technically, and when he
findssomethinghelikes,hemovesin.“Then
I hold for at least 12 months and keep add-
ing to my holding.”
Milan’sfirststockpurchasewasCanadian
National Railway (TSX: CNR) in 2010. He
bought more in 2011 and 2012, and sold
all his shares in May of 2013 at $101—more
than doubling his money. That same day,
he bought Magna International (TSX: MG)
at $62 a share. Milan sold his shares last
March at $105 each for a 70% increase,
bringing his TFSA to $60,000.
“I want to fully understand why I’m
buying a stock,” says Milan. “I’m not inter-
ested in gambling. I want to invest.” Since
then, Milan has held only one stock—Home
Capital Group (TSX: HCG), a mortgage lend-
ing company. He loves its management
team and believes the company has stayed
under the radar. Milan “tiptoed into it” at
about $28 last spring and continued buying
more shares over the next couple of months.
The stock recently traded at about $50. “My
TFSA touched $100,000 twice in the fall,
but the stock has been volatile lately,” says
Milan. “I believe it’s one of the best buys
on the TSX right now. You know what they
say: third time’s a charm.”
$70,474
Jin Won Choi // 32 // LONDON, ONT.
INVESTMENT STRATEGY
Flexible and opportunistic
You may remember Jin Won
Choi, a software developer with
a Ph.D in mathematics, from
our TFSA contest winners a year
ago. Jin came in fifth in 2013
with a TFSA total of $50,876. And even
though he now has $20,000 more than last
year his ranking has slipped to sixth. “This
year the stock markets were much more
volatile and I had to do some creative things
to boost my returns.”
Although Jin has invested in blue-chip
and small-cap stocks, he’s had the most
success with micro-caps—those with a mar-
ket capitalization of $50 to $300 million.
But he changed his strategy in 2014. Believ-
ing that the bull run of the last five years
was due for a correction, Jin bought put
options—contracts that allow the holder
to sell a specified amount of stock at a set
price within a specified period. (Buyers of
put options believe the underlying stock
will drop in price.) Jin bought put options
on several holdings, including iShares S&P/
TSX 60 Index Fund (TSX: XIU), which tracks
large-cap Canadian stocks, as well as on a
couple of banks and energy stocks. “A lot
of people don’t know that you can hold
put options in your TFSA but you can,” says
Jin, now the father of a three-month old
daughter. “Holding put options is an insur-
ance policy, but fires don’t always happen.
In my case, I lost money on the options
themselves, but I was able to mitigate my
losses in other areas of my portfolio.”
Over the years, Jin has found great op-
portunities in large-cap stocks, including
buying General Electric (NYSE: GE) for $5
and Bank of America (NYSE: BAC) for $3
in 2009. Then he focused on retail stocks,
mainly because he saw the sector struggling,
and growing income inequality wasn’t help-
ing. “I just asked myself, ‘What do I want?’”
says Jin. “I’m a busy guy who wants good
food but doesn’t have the time to cook.”
So he bought shares in Tim Hortons (TSX:
THI) at an average price of $43 throughout
2013 and early 2014, and sold them all last
August for $60, just before the Burger King
merger jacked up the share price to $86
later that month.
Jin continues to own Calgary-based Per-
petual Energy (TSX: PMT), and although
natural gas prices have dropped, the com-
pany continues to hold plenty of valuable
land and several gas plants, he explains. “I
bought shares at $1 last year and after the
stock price touched $2 in July, it’s fallen
back to $1.39, so it’s still up 39% from where
I bought it.”
Jin’sultimategoalhasremainedthesame:
to reach $1 million in his TFSA by 2033.
“But who’s to say I should stop there? Maybe
I’ll have $10 million by 2040.” M
// 1 // Whatever amount you
withdraw from a TFSA is added
to your contribution room in the
following calendar year. It
doesn’t matter whether the
withdrawn amount is just your
original contribution or the
interest, dividends or capital
gains your investments earned.
And just as capital gains are
not taxable in a TFSA, capital
losses are not deductible.
// 2 // Interest, dividends and
capital gains in your TFSA are
not considered income, even
when you withdraw the money.
That means federal income-
tested benefits and credits such
as Old Age Security, the
Guaranteed Income Supple-
ment and the Canada Child Tax
Benefit will not be reduced as a
result of investment growth
inside your TFSA.
// 3 // Interest on money
borrowed to invest inside
a TFSA is not tax-deductible.
// 4 // Accidental overcontribu-
tions to a TFSA are subject to
a penalty of 1% for each month
the overcontribution remains
in the account. Deliberate
overcontributions are subject
to a penalty tax of 100% of
income or gains from the
overcontribution.
// 5 // You can’t claim the tax
credit on Canadian dividends if
the stock producing those
dividends is held within a TFSA.
If you have run out of contribu-
tion room in your RRSP and
TFSA, it may be best to hold
your Canadian dividend stocks
in a regular, non-registered
account. With foreign stocks,
there is no dividend tax credit,
but you have foreign withhold-
ing taxes to consider. In
a non-registered account, you
can recover at least part of the
withholding tax by way of the
foreign tax credit. Also keep
in mind that while the U.S. does
not withhold tax on dividends
paid into an RRSP or RRIF,
that favourable treatment
doesn’t apply to dividends paid
into a TFSA.
// 6 // The management fees
paid by a TFSA account holder
will not be counted as part
of your contribution, but they
will also not be tax deductible
for income tax purposes.
// 7 // You can open a TFSA
for a child when he or she turns
18. But beware: “If you gift
money to your child for a TFSA
contribution, that money
becomes the child’s,” says Jason
Heath, a Toronto planner.
7 THINGS
YOU DIDN’T KNOW
ABOUT TFSAs
Tax-free Savings Accounts are relatively simple to
understand and use, but they do have some quirks that
can be confusing. Pay special attention to these rules
when you make your TFSA contribution and you’ll
be cruising toward higher investment gains in no time.