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Sunday, July 11, 2010

Update on debt, dividend income and super asset goal

This is my first Sunday spend without working… more than 6 months. My weekend job had been quite good for me and yesterday, for some other people, it was their last day of work until mid-August. So I am not the only one being left behind a lack of work. I wake up late, the sleep was awesome since the heat of the last couple of days make it hard to sleep well. So far, I spend most of the day reading on HubPages and looking at some hilarious Web site. Be ready for a great laugh because those Web sites are pretty funny: Beach Creeps and People of WalMart.

Other than laughing at funny pics on the Internet, I took a look at my financial situation. On Monday, I will be paying all of my bills and it will make 271$ in payment. Which is not that much. After what, I will have left a bit more than 1 000$. I will put 1 000$ as payment on my credit line, the one at 8.25%.

Non registered stocks and units investment portfolio:
Sprott Inc. (SII): 515 x 0.10 cents + 0.04$ special dividend =
Bank of Nova Scotia (BNS): 106 x 1.96$ = 207.76$
Methanex Corporation (MX): 103 x 0.62$ = 63.86$
Fortis (FTS): 106 x 1.12$ = 118.72$
Pembina Pipeline Income Fund (PIF.UN): 419 x 1.56$ = 653.64$
Just Energy Income Fund (JE.UN): 743 x 1.24$ + special dividend of 0.20$ = 1 069.92$
Yellow Pages Income Fund (YLO.UN): 445 x 0.80$ = 356$
Bell Aliant Regional Communications Income Fund (BA.UN): 100 x 2.90$ = 290$
Pengrowth Energy Trust (PGF.UN): 207 x 0.93$ = 192.51$
Enbridge Income Fund (ENF.UN): 312 x 1.15$ = 358.80$
Corby Distilleries Limited (CDL.A): 100 x 0.56$ = 56$
Davis + Henderson Income Fund (DHF.UN): 100 x 1.84 = 184$
Premium Brands Holdings Corporation (PBH): 200 x 1.18$ =
TOTAL: 3 859.31$

Tax-free savings account (TFSA):
The Consumers’ Waterheater Income Fund (CWI.UN):
404 x 0.76$ = 307.04$

RSP investment portfolio:
EnCana Corporation (ECA): 100 x 1$ = 100$
Emera Incorporated (EMA): 202 x 1.11$ = 224.22$
TOTAL: 324.22$

OVERALL TOTAL: 4 490.57$

I am now at 4 490.57$ in annual dividend income or 374.21$ in monthly dividend income. To this, we can add a 100$ extra for the DRIP… which could bring everything at 4 590.57$. Those are great news! Also, I was thinking about selling my Sprott Canadian Equity Fund to purchase more units of Just Energy Income Fund (JE.UN). This could increase my dividend income to close to 5 000$ or so……. Very tempting actually, BUT……. I have to remember the diversification rule. Thinking about dividend income only can be a trap. It’s not a bad thing to have money invested in mutual funds for small investors, it’ something that actually can help to diversify a portfolio. But I have to say, I also taught about selling my Sprott Canadian Equity Fund for some EnCana Corporation (ECA) stocks…… But I am not too sure about what I am going to do. I am still thinking about it.

For last post, I update my debt situation. Currently, I am at 37 240.49$ in red debt. But counting my payment of tomorrow, I will be at 35 969.49$. Which is reasonable for now I find. It’s still a lot in debt, but whenever my 100 000$ assets goal will be reach, I plan to work at paying off debt. Having 35 969.49$ in debt is not that of a big deal. Want to know why?

Ok, so I am now at a 4 490.75$ annual dividend income. Let’s remove the dividend coming from the RSP, as I cannot touch it until “real” retirement:

4 490.75$ - 324.22$ = 4 166.35$

This is an amount that I can cash in if I want.

Knowing my situation, let’s say I put 1 000$ as monthly payment on my debt. That will make 12 000$ per year. To this reasonable amount, I can applied 4 166.35$. That make a total of 16 166.35$

35 969.49$ / 16 166.35$ = 2.3

Basically, I can pay off that 35 969.49$ debt value in 2 years and 3 months. That’s the reason why I am not in a hurry to pay off my debt. That’s why I feel comfortable dealing with those debt while working at reaching my 100 000$ assets goal.

That’s how it’s going to work.

I am just facing a minor problem, 2 of my credit card balance transfers are soon going to expired. Once in September and the other in October. They are:

7 982.59$ at 4.9% ending on October 2010
1 253.17$ at 3.9% ending on September 2010

The once ending on September do not bother me at all. It’s just a tiny little 1 253.17$ after all. But a 7 982.59$ is more massive. I had been thinking on what to do. My solution was to apply to a credit line at RBC. But…….. guess what, I am kind of lucky because just by looking at my TD credit card statement, I had been target for a credit card balance transfer at the same 4.9% valid for 6 months! YEAH! So this what’s going to happen:

I am going to transfer the current 7 982.59$ from TD to RBC Visa and from there, I am going to transfer the same amount from RBC Visa to TD Visa! And there you go! The only thing is that I don’t know when the offer gets expired, but I guess it will be valid for a little while. If not I will just call TD Visa and ask. If it’s a limited time offer I will do the transfer now and if it’s valid until October, I will proceed with the super crazy transfer lol only in September……

It’s looking good for my 100 000$ assets goal and I have a feeling it’s all going to work!

1 comment:

Dividend Lover said...

Good choice paying off part of the 8.25% debt.

your 1,000$ will be earning 8.25% guaranteed returns.


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