So far in 2024, I haven't contributed to my TFSA portfolio - which is a real shame - but that finally changed this past Friday. I proceeded with a contribution in kind for two stocks that have been in my non-registered portfolio for quite some time now: Bank of Nova Scotia (BNS) and Emera Inc. (EMA). BNS is a special stock for me. If I am not mistaken, Bank of Nova Scotia (BNS) was mentioned in Derek Foster's book "Stop Working." I started investing in stocks over 15 years ago after reading Derek Foster's books. Bank of Nova Scotia (BNS) is among the first stocks that I ever invested in because it was mentioned in one of Derek Foster's books.
In my non-registered portfolio, I had my BNS stocks set up on a DRIP, which helped increase the number of shares that I own over time. I created quite good wealth with BNS and earned a good dividend from my stocks. However, I wasn't experiencing much of a capital gain currently on my BNS stocks, so that's why I decided it was a good pick to proceed with a contribution in kind from my non-registered portfolio over my TFSA one. Now that Bank of Nova Scotia (BNS) and Emera Inc. (EMA) are in my TFSA portfolio, the dividends I earn from these two investments will be tax-free.
When proceeding with a contribution in kind, I always try to target stocks that aren't experiencing high capital gains. The reason is that while proceeding with a contribution in kind from a non-registered portfolio over a TFSA - or even an RRSP portfolio - you pay taxes on the capital gain. Financially speaking, proceeding with a contribution in kind is the same as if you were actually selling your stocks inside your non-registered account.
In 2024, I had over 30k in contribution room available for my TFSA. It was about time I contributed to my TFSA. I still have several thousand dollars left as contribution room for my TFSA! With those recent changes, my non-registered portfolio closed this past Friday session at $127,215.50, and my TFSA portfolio at $143,060.83. For the first time ever, the value of my TFSA portfolio exceeded my non-registered one.
My margin debt is now at $12,124.11. My goal was to have it down to $11k by the end of January. It didn't happen, but I am not too far behind. For February, my goal is to pay it down by a bit over $2,000. I should be able to bring my margin account debt to $9,774 by the end of February. If I get really lucky, I may be able to sell the Bitcoins and Ethereum ETF investments that I have been holding in my TFSA portfolio for way too long at a profit. I have certainly been waiting a long time, but it has been a good lesson. Don't expect me to invest in anything crypto-related anytime soon. For a little while, I was buying and selling crypto ETF units on and off, until I couldn't do so anymore. The value of my crypto ETFs is taking some time to go back to where it used to be. The longer I wait, the less likely I am to invest back in any crypto investment.
If I can possibly sell my crypto ETF at a profit in February, my margin account debt could go down to a very nice and low $6k. Of course, I could sell other assets that I hold - I hold so many stocks - but I currently don't have any other investments that I am willing to sell at this point. Many of my investments have experienced very nice growth. I will mention Boyd Group Services Inc. (BYD), which closed this past Friday session at $300 per share!
I didn't make an extra contribution to my 2023 RRSP because I prefer to put my money toward paying down my margin debt. I am working really hard to pay it off by the end of this year. From there, everything will be a lot easier, and I will be able to contribute to my RRSP more easily and put some money aside for savings.
While having the goal of paying down my margin debt, I am pretty much living paycheck to paycheck. This is nothing new to me, but before the interest rates start rising, I had a couple of thousand dollars in savings. Now, all of my savings have gone toward my margin debt. At now $12,124.11, that little margin debt is very annoying. It represents quite a sum, but at the same time, it's not much that is left that needs to be paid off.
Anyway, I think I will be in a better place once my margin debt is completely paid off. The 8.5% interest rate on my margin is obviously the most annoying part.
Other than proceeding with two contributions in kind for my TFSA this past Friday, while I was on the phone with my broker, I registered for the Fully-Paid Securities Lending Program offered by National Bank Direct Brokerage. The broker asked if I wanted to register, and I agreed. I had actually tried to register for this program before in the past, but my margin debt was higher at that time, and the broker told me it didn't seem worth it. However, things sometimes change, and maybe they now accept accounts with a margin account, I don't know. You can read more about the Fully-Paid Securities Lending Program at National Bank Direct Brokerage right here.
I registered for the program this past Friday, and I noticed over the weekend that my account had already been set up for it. I now have one new Canadian non-registered account and one new US dollars account ready to lend my shares. The lending program only works for non-registered accounts, in Canadian and US dollars. It's risk-free; your stocks remain yours, and if they are already set up on a DRIP, they remain on the DRIP. Additionally, you get to collect your dividends as usual. The way you pay taxes on the dividend doesn't change. You pay taxes on what you are going to make through the Fully-Paid Securities Lending Program. I don't know more than that, but I will let you know how much I can make out of this. I can really use any money that comes my way. From what I see so far, you can track how much the program is giving you on a daily basis. We'll see how it goes.
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