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Sunday, March 19, 2023

The Challenges of Letting Go some Stuff: My Decluttering Adventure in New Brunswick

We are getting closer to the month of May, which is the month I depart for Montreal, and I am doing everything I possibly can to declutter all the little possessions I still have here in New Brunswick. Today, I decluttered my bedroom. I still have to go through some of my stuff, but I am pretty well advanced. I went through the exact same process a few years ago, so this time it's not as bad as it used to be. However, I still found some old floppy disks that were carefully hidden in my wardrobe. I went through them and saved the content on my laptop. All this decluttering is quite an annoying task, and I really dislike it, but it needs to be done. While going through the process, I found something really special... If you don't want to miss anything, follow me on Twitter at @SunnyJNB.

I had a big box with my name on it in my wardrobe, but I had no idea what was inside until I opened it. It's a messy mix of photographs - some with people I don't even recognize lol - hockey cards that belong to my brother (did I steal them from him? I don't remember...), pictures in frames, etc. So, I have to go through the box carefully. Today, I spent basically the whole day in my bedroom, and I'm not even finished yet. I prefer to do this when I have enough time to do it peacefully without rushing, which is now.

Imagine a situation where my parents finally find an apartment they like and decide to sell the house. I'll have to help pack not only their things but also mine. Like, come on, it doesn't make any sense. My brother is pretty neat in the sense that none of his stuff is here anymore, but a lot of mine still is. I doubt my parents will have the opportunity to sell the house anytime soon because there aren't enough apartments around here. However, there will come a time when my parents won't be here anymore and my stuff will need to find a new home.

After finishing my bedroom, my next step will be the basement, where I have about 5 to 6 plastic bins (from what I remember) full of stuff - mostly books and papers. I also have one suitcase full of what I used to tell my parents were "important papers"... I want to go through that suitcase. Once I'm done with everything, I'll try to figure out the moving process. It's not an emergency situation, but I need to figure out how to take the remaining items I want to keep and bring them to Montreal. I have a few options for how to proceed.

I can do this gradually when I visit New Brunswick since I am allowed two suitcases on the bus. Luckily, the bus ride from Riviere-du-Loup to Montreal is direct. I'm used to traveling with a lot of luggage. It's not the first time I'm moving stuff around using the bus. Before, it was even easier because I could ship some stuff from New Brunswick to Montreal and vice versa on the bus. However, I don't think that service is available anymore, since there's no bus between Riviere-du-Loup and New Brunswick. There are always ways to make things work out. One option would be to ship my stuff from Riviere-du-Loup to Montreal, since my old folks always give me a ride to Riviere-du-Loup anyway.

The situation is not desperate. I think it's always better to have all of your belongings in one place, in one home. This being said, I plan to leave some winter stuff in New Brunswick, but that's only because I know I will be coming back for sure for the hunting season. And that is leaving me with more space in my luggage to move some stuff over to Montreal.

Monday, March 13, 2023

Maximizing my TFSA Portfolio: How I Contribute In-Kind When I Just Don't Have Any Cash to Invest

I really like the change of springtime because even though I finish work at 6 p.m. New Brunswick time, I can still go out for a walk without it being too late. I usually walk for nearly an hour during my lunch hour, and now I will start going out for a walk after work too. If I can walk enough to reach 12,000 steps, it's a good day for me.

On the other hand, today wasn't a good day for the TSX as it closed the session with 19,588.90 points, falling behind the 20,000-point mark. My non-registered portfolio closed today's session at $143,958.26, my US portfolio at $5,151.27 US, my RRSP stocks-only portfolio at $64,310.49, and my TFSA portfolio at $124,572.51.

It's time to discuss today's topic: how to contribute to your TFSA portfolio, even if you don't have any money to invest. The solution is simple: make a contribution in kind from your non-registered portfolio to your TFSA portfolio. Personally, I consider myself to be an expert in contribution in-kind. I regularly use this method to contribute to my TFSA portfolio, which is why I have a much larger number of investments in my TFSA portfolio compared to my non-registered portfolio.

If you take a closer look at my investment portfolio, you will see that I have more holdings in my TFSA portfolio because of the contribution in-kind system. This allows me to maximize the growth potential of my investments without having to make additional cash contributions.

The concept of a contribution in-kind is quite simple. You choose an investment from your non-registered portfolio and transfer some or all of its shares to your TFSA portfolio. This method allows you to fully utilize your TFSA portfolio without having to use cash from your savings. When it comes to making contributions in-kind from my non-registered portfolio to my TFSA, I follow a few important rules.

First, the investment that I select from my non-registered portfolio needs to be a stock that I care about and that I am willing to keep as an investment for my TFSA portfolio. 

Secondly, the value of the investment that I will select from my non-registered portfolio needs to be down. While proceeding to a contribution in-kind using investments that are being held inside your non-registered portfolio, you will have to pay taxes on the transfer. If the investment selected is experiencing great growth inside your non-registered portfolio, if you transfer that successful investment to your TFSA portfolio, you'll have to pay capital gain taxes. Personally, it's something I am trying to avoid. In addition, selecting quality investments that have decreased in value in your non-registered portfolio can provide you with more contribution room in your TFSA.

Currently, my investment in BCE Inc. (BCE) within my non-registered portfolio has decreased by about $400, making it an ideal choice for a contribution in-kind to my TFSA. Additionally, I already have some BCE shares in my TFSA portfolio, so consolidating all of my BCE shares in my TFSA would help to maximize the dividend income and enable the DRIP to work effectively.

Contributing in-kind with dividend-paying stocks is an excellent strategy because, once the transfer is completed, the dividend income earned within the TFSA portfolio is essentially tax-free, which is fantastic. Last year, I earned over 80k, and while I probably may not earn as much in 2023, I'll do whatever I can to save money and keep it away from the tax man.

When transferring funds or making a contribution in-kind to grow your TFSA portfolio, it's crucial to ensure that you stay within your contribution limit. Overcontributing to your TFSA portfolio could result in significant costs. Personally, I have not yet maximized my TFSA contribution and have several thousand dollars of contribution room available for my use.

Recently, I invested a significant amount of money into my margin account to pay off some debt. The debt is linked to my non-registered portfolio. Whenever I make a contribution in-kind, I must ensure that I replace the loan value of the selected investment with cash. However, as I have been diligently working on paying down my margin account, I now have over $50,000 in cash available in my margin account. This means that my margin account is in a much more secure position. Nonetheless, when it comes to margin debt, there is always some level of risk involved, and you can never be entirely safe.

Make sure to understand the rules of the TFSA before contributing to it and ensure that you stay within your contribution limit. By doing so, you can enjoy tax-free dividend income.

Saturday, March 11, 2023

Welcoming CSX Corporation (CSX) in my US portfolio!

With spring approaching, I am trying to spend more time walking outside and less time on my laptop, although there is still a lot of snow left to melt away. It has been a long and cold winter, but we are not completely done with it yet. However, one clear indication that spring is coming is the fact that there is less and less wood in the basement. One thing is certain: the worst of winter is now behind us, and I couldn't be happier. I may not post as frequently as I did during the month of February, as time passes quickly when you try to walk at least 90 minutes a day and work full-time. Work has always been busy, but now it's becoming a bit more intense.

I have a lot of decluttering to do in both my bedroom and the basement, where I have stored some of my belongings in boxes. In the basement, there are about six boxes and one suitcase, while my bedroom is filled with my own possessions and items that belong to my parents. Since I haven't lived with them full-time since my early twenties, my bedroom has become a storage space for my parents' belongings. I always kept some of my belongings in my room, and over time, as I moved out, some of the drawers were emptied, and my father started using them to store his things. I never had a problem with it, but I found it very amusing the first time I noticed my father's belongings invading my room. Soon after, my mother's clothes filled up the wardrobe, which was also okay with me.

The other half of my belongings are in my apartment in Montreal, where I will be reunited with them sometime in May. Time is flying by, and I really want to get my decluttering done before I leave for Montreal. I don't have too many clothes, but my thing is papers - A LOT OF PAPERS - and books. My old folks want eventually to sell the house if they can find an apartment and I really have to take my decluttering seriously and take some stuff with me when I will be leaving for Montreal. Papers and books are heavy, so I have a lot to do here. As always, I do things my own way, including decluttering. I write down everything that needs to be done on my cellphone, and I tackle the clutter in sections, doing one section at a time.

I started spending the months of October to May in New Brunswick last year while we were dealing with the pandemic. During those months, it's both my father's and mother's birthdays, so I thought, why not? It went well last year, so I decided to repeat the experience this year. Even though I still have to pay my monthly rent for my Montreal apartment, I save a lot of money while spending the winter in New Brunswick. I don't do a lot during the winter in Montreal anyway since I'm not a winter person. I am trying to make the most of my stay in New Brunswick by controlling my expenses.

This year, I did my 2022 taxes quite early, and I am already done with the process. I had estimated a tax return of around $1,000, but I will be receiving a return of close to $850. With that return, I will only be missing less than $700 before reaching out for the $20,000 in savings. In 2022, my income exceeds $80,000. I always thought that anything over $70,000 was an extra-large income, but even at $80,000, I find that it's - of course - a good salary, but it's not as much as I imagined.

Recently, I made a small investment in my US portfolio by investing in CSX Corporation (CSX). The overall chart of CSX is very strong. Take a look for yourself:
Unfortunately, the TSX closed well below the 20,000-point mark, at 19,774.92 points. My US portfolio closed this past Friday's session at $5,115.27, my RRSP portfolio at $64,400.42, my TFSA portfolio at $125,291.34, and my non-registered portfolio at $144,767.61. My margin account debt is now at $44,029.98, and my dividend income is at an annual $12,208.59. I currently have over $7,000 in my main chequing account, and I am looking forward to transferring some of that money to my margin account debt.

These days, you can follow me on Twitter at @SunnyJNB.

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