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Sunday, October 2, 2011

Dealing with a massive 85 168.13$ worth of debt

I am currently at 85 168.13$. That amount do not include my current credit card balance of 1 854.55$ because I manage to pay my credit card balance every month. So my official amount of debt is of an awfully high 87 022.68$. Many things explain that high level of debt: my move from New Brunswick to Montreal, my little trip to Ottawa just before leaving, the visit of my mom to Montreal, shopping, my one time car insurance payment for the full year (1 300$)... All those things had significantly increased my debt level. 

At 85 168.13$, I am the highest I had never been in debt. Another factor that is not helping in all this is the situation regarding the TMX Group Inc. (X). I had purchased some X stocks back in February 2011 using my margin account money, hoping to get rich over the London Stock Exchange deal. Unfortunately, the merger project got cancel, and now the Maple Group acquisition project is still pending.

September 30, 2011 was supposed to be the closing date for TMX investors to choose between a maximum of cash or a maximum of stocks... I had picked a maximum of cash option in order to reduce the money I borrowed on my margin and also to make a good profit out of the sale. But here again, it did not happen. So fact that the deal did not go through yet is not helping my situation is any way. If the deal would have gone through, my debt level would be at 80k right now. Not 85k.

Many factors are not helping me in the management of my debt.

It could take several months before the TMX-Maple Group go through. In the mean time, I decided to hold. TMX stock value is stable and could even increase in the next couple months. I don’t feel that selling is an obligation at this time but at the same time, I feel that I need to do something about my debt. And at the same time, I still have planned ahead my next investment – probably in Enbridge (ENB).

So what am I going to do about this mess? :0)

Well, after studying at the numbers, I think – for once – that I will be looking forward at reducing my debt level until the end of year 2011, hoping that in the mean time, the Maple Group-TMX deal will go through.


Anonymous said...

You started the year with a portfolio of 136k and 58k in debt for net worth of 78k. It seems like you invest around 1,000 per month of your money. You now have 144k but 85k in debt, for net worth of 59k. You are down 19k + 10k(approx.) of your money for a total of 29k. That is a loss of over 20% for the year while the TSX is down only 13% for the year.

My question is don't you think you would've been better off investing in an ETF (instead of picking stocks). And secondly, lots of readers where warning you regarding investing with margin. Knowing that most of your stocks you purchased with margins are down and only made your loss worst, do you regret investing with margin.

Anonymous said...

It seems we both questions her math at the same time regarding her portfolio.

I assumed you invested 10k this year, if you only invested 5k of your money, you would be down 24k, but still down 17%. Only you know how much you invested. But as Funny said, these are real loss.

I have a feeling that you haven't really made any money on the market since you started investing as the increase in your net worth is from your own savings. If anything, the stock market has probably took some of your wealth. But don't worry, you're not alone, the stock market hasn't been a good place to be in the last decade. The only people making money are banks with their interest on margins and trading fees and mutual funds companies with their high fees.

Anonymous said...

impressed with your blog...
try to reduce your bad debt, student loan is still a "good debt", but credit card is strict "no-no..."

Anonymous said...

I recently bought some stocks on margin as well. So far that investment has gone down, especially after today. But as long as you don't sell when it's down, you don't lose right. I think the market will eventually bounce back up so as long as you are investing for the long term you don't have to worry so much.



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