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Sunday, August 23, 2020

Finally contributing to my TFSA portfolio (yeah!) - and only 4 days left before my BIRTHDAY OMG!!!

The countdown still continue. Last week, the sell of Richelieu Hardware Ltd. (RCH) left me with a nice amount in my TFSA. I used that money to pay off an expense of mine, left some money to pay down my margin, and I also proceed with a contribution in kind to my TFSA portfolio. I took one of my recent investment that was in my non-registered portfolio - Rogers Communications Inc. (RCI.B) - and got it transferred over my TFSA portfolio. Since I still have several thousands left in contribution left for my TFSA, which is a shame, I am thinking about also doing a contribution for another recent investment of mine: Telus Corp (T).

Over the past years, I mostly contribute to my TFSA portfolio by doing contribution in kind. That's why the list of stocks that I hold inside my TFSA portfolio is much longer there than in my non-registered portfolio. It haven't always been that way. I used to have much more stock in my non-registered portfolio than in my TFSA one. Contribution in kind is an easy way to take advantage of your TFSA when no more fresh cash is available.

While targeting investments in my non-registered portfolio for possible candidates for a contribution in kind for my TFSA portfolio, I try to target investments that I care about and that I want in for the long run. Also, I like to target stocks that in the present time, are experiencing a small - or medium capital losses. Because if I go the other way, if I chose a stock that is experiencing big capital gain and get it transferred over my TFSA, unfortunately, I will have to report the capital gain and pay tax on them. Selecting stocks that you are experiencing a little loss on is the way to go. You won't be able to claim a capital loss, but you won't have to pay taxes on any future capital gain if the stock finally decided to grow. It's really important to take fully advantage of your TFSA portfolio because all dividend gain inside a TFSA portfolio is.. tax free and it's amazing.

Currently, I am experiencing a capital loss of  something like $500 on my Bank of Nova Scotia (BNS) stocks. BNS was a stock that was either in the Derek Foster Stop Working book, or in the Lazy Investor, I don't remember exactly which one, but BNS was a Derek Foster stock. This pandemic had been really bad for Bank of Nova Scotia. Since I am experiencing a loss on Bank of Nova Scotia (BNS), I had been thinking about using my Bank of Nova Scotia (BNS) stocks to do a contribution in-kind to my TFSA portfolio since I have left a really large contribution room for it, I could have done it without any problem. BUT, my problem being my margin account situation. A margin account is just a bitch that have control over you. While holding a margin account to a non-registered account, you cannot do everything you want, your liberty is being compromised. 

I simply cannot used my Bank of Nova Scotia (BNS) stock for a contribution in-kind because the margin value of my BNS stocks is just way too high. I would have to put on several thousands cash in my non-registered portfolio before doing that move and since I don't want to used any more debt money, despite our low interest rate environment, I am not getting into that shit. Low interest rate or not, it's extremely hard to pay down debt. Currently, I have a margin debt and a credit line debt that together currently make a total of $50 647.45. It's not that huge of an amount, I know I can take take down easily, over time. I am looking forward, now that I am soon about to turn sexy 40, to pay down my debt. We don't know how which turn this pandemic is going to take, I am getting older, as my "old" folks in New Brunswick, and I have no real trust in Chrystia Freeland as newly minister of finance. For all of those reasons, saving money and paying down debt - if you have any - should be - like it is to be - among your top priority.

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