I am now at 122 468.76$

2010 had been an AWESOME YEAR. I won't post my year in review for now, but just to add quickly that my investment goals had been reached. The major one was to reach 100 000$ in assets before the end of 2010 and I did. In result, I accumulate debt, but I consider those debts as being healthy because those debts are being hold for investment purposes. It's not money that been throw away on a Louis Vuitton purse.

On date of December 18, I hold 122 468.76$ in assets and 47 221.68$ in debt, for a net value of 75 247.08$. Not too bad! Currently, I have use my margin money at 4.52% to pay off a 5 000$ credit line at 8.75%. I also use 2 000$ on my margin money to invest in Horizons Gold Yield Fund (HGY.UN). To evaluate the situation better, let's review my dividend income. Here's an update of my dividend earnings:

Non registered Investments:
Stocks and Units investment portfolio
Sprott Inc. (SII): 57.20$
Bank of Nova Scotia (BNS): 209.72$
Methanex Corporation (MX): 63.86$
Fortis (FTS): 120.91$
Pembina Pipeline Corporation (PPL): 669.24$
Just Energy Income Fund (JE.UN): 952.32$
Yellow Media Inc. (YLO): 376$
Bell Aliant Regional Communications Income Fund
(BA.UN): 381.90$ (I am counting the dividend for 1.90$ per unit).
Pengrowth Energy Trust (PGF.UN): 178.08$
Enbridge Income Fund (ENF.UN): 366.85$
Corby Distilleries Limited (CDL.A): 112.56$
Davis + Henderson Income Fund (DHF.UN): 241.20$
(I am counting the dividend for 1.20$ per unit)
Premium Brands Holdings Corporation (PBH):
240.72$
EnCana Corporation (ECA): 160.80$
iShares S&P/TSX Capped REIT Index (XRE): 43.74$
Horizons Gold Yield Fund (HGY.UN): 130$

TOTAL: 4 305.10$

Tax-free savings account (TFSA):
The Consumers’ Waterheater Income Fund
(CWI.UN): 274.30$

TOTAL: 274.30$

RSP investment portfolio:
EnCana Corporation (ECA): 80$
Emera Incorporated (EMA): 238.96$

TOTAL: 318.96$

OVERALL TOTAL: 4 898.36$

Good, but this calculation do not include the special dividend that usually pay Just Energy Income Fund (JE.UN) on an annual basis (yeah yeah, on top of the regular dividend!). The special dividend of Just Energy Income Fund (JE.UN) is usually of 20 cents per unit. I am adding a 153.60$ to this current 4 898.36$ because I had been paid a special dividend of Just Energy Income Fund for 2 years in a row now. That's the usual stuff now, special dividend from Just Energy.

Sprott Inc. (SII) also pay a special dividend, but the amount is not steady. But let's remember that Sprott Inc. is still a young stock (of 2008).

OVERALL OF THE OVERALL dividend earning: 5 051.96$

Ok, so here we are:

122 468.76$ in assets (WOW!);
5 051.96$ in yearly dividend payments (yeah!);
47 221.68$ in debt (!!!);
2 516.16$ on annual interest for the debt (outchh).

I have way too much debt, but adding those debts were the only I had to reach the 100 000$ I wanted so much! I currently hold more than 100k. Should I sell the 22 468.76$ left to pay off debt? Well, my answer is NO. I won't use the extra 22 468.76$ that I have in assets to pay my debt because I am not very interesting at paying debt at this time. It's a risk, but it's a risk I am willing to take. But the risk is calculated.

The amount of dividend I earn on an annual basis can pay in 2 times my annual interest paid on my debt. so this is all pretty manageable. But I should not go deeper into debt even for investment purposes because passing the 47k in debt could be passively dangerous.

Also, another reason why I don't want to pay off debt is that I want to reach 150 000$ in assets for 2011. Possible or not? We'll see, so stay tune ok? STAY TUNE :0) Because the best (or the worst?) is to come.

The benefits of adding iShares S&P/TSX Capped REIT Index Fund (XRE) to your portfolio

Our very last investment was little (less than 800$), but its a 4 stars Morningstar Canada investment: iShares S&P/TSX Capped REIT Index Fund (XRE). I currently own 54 units of iShares S&P/TSX Capped REIT Index Fund (XRE).

With a net asset value of more than 1 billion of dollars (that's right, 1 billion!), the iShares S&P/TSX Capped REIT Index Fund (XRE) offer a great exposure to the Canadian real estate investment trust, commonly known as REITs. The iShares S&P/TSX Capped REIT Index Fund (XRE) offer exposure to the financial sector (99.95%), a sector that is still strong in Canada despite the worldwide recession. Personally, my overall portfolio didn't have a high exposure to the financial sector. As financial stocks, I hold Bank of Nova Scotia (BNS), Davis + Henderson Income Fund (DHF.UN) and Sprott Inc. (SII). Before iShares S&P/TSX Capped REIT Index Fund (XRE), I wasn't involve in the real estate sector - but now I am!

If just like me, you worry about diversification (like enough is never enough right) and you want to make sure to invest in a financial product that is already ultra-diversify by itself? Well, the iShares S&P/TSX Capped REIT Index Fund (XRE) may be a good option for you!

When investing in the iShares S&P/TSX Capped REIT Index Fund (XRE), you directly investing in major players of the Canadian real estate sectors:

RioCan REIT (REI.UN): 24.68%
H&R REIT (HR.UN): 12.64%
Canadian REIT (REF.UN): 9.37%
Calloway REIT (CWT.DB.B): 8.31%
Boardwalk REIT (BEI.UN): 7.13%
Primaris Retail REIT (PMZ.UN): 5.95%
Dundee REIT (D.UN): 5.66%
Canadian Apartment Properties REIT ("CAPREIT") (CAR.UN): 5.40%
Cominar REIT (CUF.UN): 5.05%
Chartwell Seniors Housing REIT (CSH.UN): 4.70%

Sound interesting? Well, the iShares S&P/TSX Capped REIT Index Fund (XRE) trades on the Toronto Stock Exchange. Looking for an investment for your 2010 RSP? Good news: the iShares S&P/TSX Capped REIT Index Fund (XRE) can be hold inside a RSP register account.

In reason of its high exposure Real Estate Investment Trust (REIT), I probably won't increase the number of units that I hold in the iShares S&P/TSX Capped REIT Index Fund (XRE). REITs are new for you to? According to Investopedia, REIT is "A security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages". Companies such as RioCan REIT (REI.UN) and H&R REIT (HR.UN) are involve in the real estate through different activities. And because of their direct participation in the real estate sector, the REITs, receive a special tax considerations.

iShares S&P/TSX Capped REIT Index Fund (XRE) can be a good investment to hold in a non-registered account. The iShares S&P/TSX Capped REIT pays a monthly dividend known as a monthly cash distribution. As example, for the month of November 2010, the monthly cash distribution for the iShares S&P/TSX Capped REIT Index Fund (XRE) was of 0.06175$ per unit.

It won't represent that much of a dividend for us - only 3.3345$ per month - but still that more than enough to purchase a medium coffee at Second Cup. Merry Christmas!

My stock investment portfolio on date of December 18, 2010

Savings:
1 327.75$

Non registered Investments:
Stocks and Units investment portfolio
Sprott Inc. (SII): 3 874$
Timminco (TIM): 68$
Blue Note Mining (BNT): 52$
Bank of Nova Scotia (BNS): 6 056.20$
Hanwei Energy Services (HE): 117$
Methanex Corporation (MX): 3 139.44$
Fortis (FTS): 3 648.70$
Pembina Pipeline Corporation (PPL):
9 330.75$
Just Energy Income Fund (JE.UN): 11 397.12$
Yellow Media Inc. (YLO): 2 961$
Bell Aliant Regional Communications Income Fund
(BA.UN): 5 276.25$
Pengrowth Energy Trust (PGF.UN): 2 728.44$
Enbridge Income Fund (ENF.UN): 5 423$
Corby Distilleries Limited (CDL.A): 3 316.50$
Davis + Henderson Income Fund (DHF.UN):
4 044.12$
Premium Brands Holdings Corporation (PBH):
2 860.08$
EnCana Corporation (ECA): 5 706.39$
Sprott Physical Silver Trust UTS (PHS.U): 2 590$
iShares S&P/TSX Capped REIT Index (XRE): 713.88$
Horizons Gold Yield Fund (HGY.UN): 2 000$
Cash: 97.72$

TOTAL: 75 400.59$

Tax-free savings account (TFSA):
RBC O’Shaughnessy Canadian Equity Fund:
2 935.95$
The Consumers’ Waterheater Income Fund
(CWI.UN): 2 823.18$
Dumont Nickel Inc. (DNI): 316.25$
Cash: 3.27$

TOTAL: 6 078.65$

RSP investment portfolio:
Sprott Canadian Equity Fund: 7 443.34$
Claymore Gold Bullion ETF (CGL): 4 187.82$
EnCana Corporation (ECA): 2 839$
Emera Incorporated (EMA): 6 466.34$
Cash: 66.99$

CIBC Dividend Growth Fund: 544.76$
CIBC Emerging Markets Index Fund: 420.84$
CIBC Monthly Income Fund: 1 033.89$

Energy and Base Metals Term Savings (Indexed term savings):
503.46$
Natural Resources Term Savings (Indexed term savings):
502.06$

GIC National Bank: 1 147.42$
GIC Plus: 500$

TD Canadian Bond: 115.25$
TD Monthly Income: 107.99$
TD Emerging Markets: 90.28$
TD Energy: 94.13$
TD Precious Metals: 146.76$
TD Latin American Growth: 104.30$
TD Entertainment and Communications: 122.58$
TD Dividend Growth: 204.80$
TD U.S. Mid-Cap Growth: 116.62$

Maritime Life International Equity Fund
(Templeton): 652.99$
Manulife Simplicity Growth Portfolio: 916.73$
Maritime Life CI Harbour Seg Fund: 1 079.34$
Maritime Life Fidelity True North Seg Fund:
1 041.04$
Maritime Life Trimark Europlus Seg Fund: 644.05$

Great-West – various: 1 751.69$

RBC Canadian Dividend Fund: 540.44$
RBC U.S. Mid-Cap Equity Fund C$: 2 019.26$
RBC Global Resources Fund: 1 171.86$
RBC O’Shaughnessy International Equity Fund: 656.56$
RBC O’Shaughnessy All-Canadian Equity
Fund: 1 207.56$

GIC Canadian Market: 1 000$

TOTAL: 39 440.15$

Social Capital at Desjardins Membership share
for 3 accounts: 40$

Savings + Stocks, units, mutual funds + Tax-
free Savings account + RRSP + Online Income
(181.62$):

122 468.76$

My debt situation on date of December 18, 2010

Line of credit: 9 498.17$ at a low interest rate of 4.75% (RRSP credit line rates) = 451.16$ in annual interest
Line of credit: 4 900$ at a low interest rate of 4% (credit line rates) = 196$ in annual interest
7 946.31$ on a TD Canada Trust credit card at a low interest rate of 4.9% ending in April 2011 (result of a credit card balance transfer)
= 389.37$ in annual interest
Line of credit: 4 911$ at 8.75% (credit line) = 429.71$ in annual interest PAID OFF
Student loan: 7 891.46$ a low interest rate loan at 5.50% (student loan rate) = 436.87$ in annual interest
Line of credit: 10 000$ at 7.27% (credit line rates) = 727$ in annual interest
6 985.74$ at a low interest rates of 4.52% (margin money coming from TD Water house): = 315.76$ in annual interest

TOTAL: 47 221.68$
TOTAL in annual interest: 2 516.16$
[In date of December 18, 2010]

Public offering of Horizons Gold Yield Fund (HGY.UN): I am in!

I didn't hear about it for about 2 days, but today was the day, I had been able to invest in 200 units of Horizons Gold and I just cannot wait to actually have them in my investment portfolio. I am not working this weekend, so I will be able to publish an update of my online stock trading accounts.

This is my second day under margin. I am getting use to it pretty quickly. It's just that the whole thing had bring a lot of changes in my online stock trading accounts. I gave a quick call to TD Waterhouse investor services just to find if everything was in order, and it was. Margin can appears as being complicated at first, but it's truly not.

Buying stocks on margin? I won't recommend to massively use margin accounts money to invest. In my case, only 2 000$ had been borrowed from my margin to invest. Just to keep my peace of mind, I don't plan to use 30% of the margin money available. So all this combine together, not use more than 30%, use margin to mostly pay existing debt is for me playing on the safe side. Also, I almost only hold line of credit loans (but none of them is actually a refinance home equity line of credit. Since I am not a home owner, I won't qualify to get a low interest home equity loan). This mean that I hold renewable credit. In case of need, I can reapply the money back to the margin accounts.

So thanks to the Dividend Lover (he's the debt busters who provide me the idea of using margin money to pay off some debt at a higher interest rate), my 5 000$ line of credit at 8.75% is paid off. At 8.75%, I wasn't holding one of the best line of credit rates there is out there. I currently has used 7 000$ of my margin money available.

I am now a debt busters: my 5 000$ line of credit at 8.75% with TD Canada Trust is now paid off!

The weekend is almost there and I cannot wait! It's going to be my first weekend off since quite some time and I am quite happy about it. Even if this is going to cut on the cash available for investing.

Remember that I am having problem to transfer money from my online broker day trading account of my TD Waterhouse online section to my line of credit? Well, that's because my non-registered Canadian cash broker account is technically dead, but I continue to receive dividend payment in it. This could last a little while, but I wasn't provided an exact delay. It's just annoying since during that delay, I have no clue of who's paying me those dividend because I can no longer access my cash account... I have no choose other than to call TD Waterhouse investor services to find out. Also, I cannot proceed myself to any transfers from my cash discount broker account to line of credit account or what so ever else other account. Nothing can be transfer from my cash account anymore.

Basically, this mean that my online commodity broker Canadian cash account no longer exist. From now on, if I want to trade commodities online using cash coming from my very own pockets, I have to deposit the money in what is now my margin account. Example: let's say I have 2 000$ from my personal cash that I want to use to invest in my non-registered account, I will have to deposit the 2 000$ in my margin account. My 2 000$ in personal cash will be add to the 43 653.66$ that I currently hold in my margin account, to make a total of 45 653.66$. After what, I can trade using 2 000$ from the margin account. Technically, there's no more Canadian cash account, just a margin one, but I can still purchase stocks using my own money through TD Waterhouse securities.

I had that 8$ and something cents in the Canadian cash account that I was desperately looking to get transferred into my line of credit, the one at 8.75% in interest rate. The TD Waterhouse rep proceed to the money transfer since it's now impossible for me to proceed myself. After what, I also ask her to take the margin money to pay off completely that same line of credit. This mean that my 5 000$ line of credit at 8.75% is now completely paid off. But now that I am looking into my broker account, under cash, I have minus (-) and the amount that I requested to be transfer on my line of credit.... Nice, but the minus is under cash and not the margin...

This is confusing to start with because I am not use to margin and the information appear all in a different way that what its use to be. And now, I am wondering if the transferred had been done properly or not... lol... I am pretty sure yes, but still, that minus under cash is intriguing.

The interest rate on the margin account is currently of 4.52%. This is very good compare to the 8.75% of my 5 000$ line of credit. I am very happy to now have that line of credit completely paid off - and it will remain paid off. Borrowing cash on my margin was for me one of the best creditsolutions that I could choose.

In case of a deadly situation on the stock market (stock market loosing a lot of points on the same day), the money need to be available and need to be ready to get transferred back on the margin in case of need. But can such situation could happen? Well, it happen in 2008, and it could happen again. Also using only 30% of the money available of the margin account like I was suggested to do by a TD Waterhouse rep is a very good advise that will help me to minimize the risk I take by borrowing money online on my margin account. I will definitively be sticking to the 30% rule. Because TD Waterhouse can sell the assets even without giving first a margin call. REMEMBER: TD WATERHOUSE HAS NOW THE AUTHORITY ON MY STOCK DISCOUNT BROKER ACCOUNT. (lol...) But seriously talking, that's what you need to know about margin and that's exactly the reason why you need to be careful when buying stocks on margin.

The use of 5 000$ on my margin do not requested a minimum payment every month, but I will be paying the equivalent of the interest amount on a monthly basis. In my personal financial situation, margin is a great tool to use to pay off debt hold on line of credit at a higher interest rate (8.75% in this case). Margin is a great tool, but it will require me to monitor my account on a daily basis and preferably - many times during the day (if not just the Canadian stock markets). But since I plan to use only 30% of the margin money available, I play safe and hopefully, it will be just fine. I am understanding a bit better now and know a bit more of where I am going with all this. Margin is not difficult, but as delicate as an English rose.