Smart Investment Strategies for Medical Residents: Kabir’s Journey with TFSA’s and RRSP’s in 2025
Kabir comes from a financially stable family that values education. Unlike many of his peers, he was fortunate to complete both his undergraduate and medical school education with zero debt. In addition, his grandparents gifted him $120,000 to invest, advising only that he “speak with a banker.” However, despite his financial head start, Kabir had no personal experience with investing or wealth management.
With little knowledge of financial planning, Kabir took a straightforward approach—he visited his bank and asked an advisor to open a Tax-Free Savings Account (TFSA) and “do something with the money.” His advisor informed him that his maximum allowable TFSA contribution was $90,000 and suggested putting the remaining $30,000 into a Registered Retirement Savings Plan (RRSP).
Initial Investment Decisions
Kabir followed the advice and made the following allocations:
TFSA: He directed $45,000 into a mutual fund selected by the bank advisor and left the remaining $45,000 partially invested and partially in cash.
RRSP: He placed $30,000 into the account but left it all in cash until he had more time to decide how to invest it.
A year later, Kabir reached out to me for guidance on his next steps. Despite his financial privilege, he and his family lived modestly, and he wanted to honor his grandparents’ gift by making informed investment choices. However, he also wanted to prioritize his residency training without spending too much time managing investments.
Developing an Investment Plan
We discussed a few different approaches, and after reviewing his options, Kabir made a bold but structured decision:
He kept the $45,000 mutual fund in his TFSA but wanted to diversify further.
He allocated $30,000 in his TFSA across three Canadian companies he admired.
He kept $15,000 in cash in his TFSA for future opportunities.
In his RRSP, he invested $20,000 in a U.S. index fund for long-term growth and kept $10,000 in cash for later decisions.
Kabir planned to monitor his investments over 12 months before making further adjustments. His goal was to get a hands-on feel for the market while keeping the process simple and manageable.
Lessons from Kabir’s Approach
Kabir’s journey highlights several important financial lessons for medical residents and early-career professionals:
✔ Start with Simple Investment Vehicles – Mutual funds and index funds are excellent starting points for beginner investors.
✔ Learn by Doing – Actively managing a small portion of your portfolio can provide valuable experience and confidence in financial decision-making.
✔ Diversify Strategically – Investing in a mix of funds and individual stocks can balance risk and potential reward.
✔ Take Time to Make Decisions – There is no rush in investing. Taking the time to assess different options can lead to better financial outcomes.
✔ Use Registered Accounts Wisely – Understanding the benefits of a TFSA vs. RRSP can help maximize tax advantages and long-term growth.
The Bottom Line
Despite his lack of investment experience, Kabir took a thoughtful and measured approach to managing his financial gift. His willingness to start small, learn from his decisions, and adjust over time reflects a smart strategy for young professionals. By focusing on long-term growth and tax efficiency, he is setting himself up for a strong financial future while balancing the demands of residency.
For medical residents and young professionals looking to invest wisely, Kabir’s journey proves that you don’t need to be an expert to start investing—you just need a plan.
Take Control of Your Financial Future
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