Paying Down Margin Debt: Why It's the Right Move Now

By now, you should know if you are subscribed to my Twitter account that I am pleased to announce that I have completed the task I dislike the most: sending all my papers for my 2022 tax income. This is worth announcing because I usually procrastinate on this task. Although it will take up to four weeks to complete during this busy tax season, at least I am in the process. I am glad that I sent my papers early because I received my T5, T3, and other documents, and I want to ensure that I file my tax income on time. Imagine working at an accounting firm and having hundreds of clients knocking at your door, mostly all at the same time, to get their tax income done before April 30... Crazy!

I sent all my papers online, but not without taking care of the actual papers first. All the papers that were required to complete my tax income for 2022 were in PDF format. I opened each one of them using Edge, and I covered up my social insurance number, account number, and the name of the institution. Of course, the accounting firm needs to have your social insurance number, but they don't need it to appear on every single paper. Additionally, when downloading documents onto a platform, you need to consider that these documents may be downloaded at some point and may end up on someone else's computer. Therefore, I covered up what I needed to while opening my PDF in Edge, and once I was done, I used the Snipping Tool on my computer to get what I needed from those PDFs. I then sent the documents, which were mostly all in JPG format. I couldn't send the PDFs in which I made the cover-up because I couldn't block the changes from being erased, and the sensitive information could be at risk of being viewed.

It's a boring little task, but if I can get $1,000 back from my hard-earned money, which is my goal, it would be nice. While waiting for it to be done, my non-registered portfolio closed this past Friday's session at $145,386.49, my US portfolio at $5,191.33, my TFSA portfolio at $127,803.85, and my RRSP stocks-only portfolio at $65,424.98. The TSX closed at 20,200 points. I hope it remains within 20,000 points. With this past Friday's paycheck, I had a bit over $17,000 in savings. I thought to myself that it was time to pay down my margin. So, I did and brought my margin debt down to $43,000. I was proud of myself, but then the interest charges came in shortly after. I pay over $300 in interest per month on that margin. My margin account debt is now at $44,066.21.

With National Bank Direct Brokerage, the interest rate on my margin account is currently 8%. Since no bank is offering an equivalent interest rate for an unsecured GIC, I have concluded that the best course of action in the current circumstances is to pay down my margin debt. This is particularly true as I do not feel like investing at this time. It is better to do something with my money, and for now, paying down my margin debt appears to be the right choice.