Summer Fun: Juggling Vacation, Finances, and Nostalgia

I am still on vacation, and I have spent most of my time in Montreal. Soon, I will be heading to New Brunswick for a few days. It could be the last summer I will spend at my family's house since my old folks put it up for sale. The time has come for me to clear out everything, and soon, nothing of mine will be left in New Brunswick. I will do my best to bring back everything I can to Montreal, but I am also planning to return to New Brunswick in October for the hunting season. If the house is still available by then, I will have another chance to bring more of my belongings.

The "stuff" I need to move consists mostly of books and scholar notes—quite heavy items that are not too fun to carry around. The more I think about it, the more I realize I won't be able to bring everything back, but I'll give it my best shot.

As for my financial status, my non-registered portfolio closed today's session at $137,201.60, my US portfolio at $5,431.77, my RRSP stock portfolio at $65,581.01, and my TFSA portfolio at $135,556.23. Unfortunately, thanks to the very juicy interest rate, my margin debt has increased to $36,331.72, with the interest rate now at 8.50%. I don't expect it to decrease anytime soon, so I am actively seeking possible solutions.

Every year, I declare the interest earned on my margin as financial fees on my tax income. However, since my income last year exceeded $80,000, it doesn't make much of a difference whether I declare it or not. Still, I religiously ask for that tax credit every single year. This year, my income is expected to be lower, but not low enough to give me a tax break. This means I still have to invest in my RRSP this year and try to save up as much as possible to pay down my margin debt.

Option 1: Pulling out the $6,000 that I have in two different banking accounts to pay down my margin. This would mean not meeting the minimum balance in those accounts, resulting in monthly banking fees totaling $8.90 ($4.95 in one account and $3.95 in the other), amounting to an annual $106.80. In contrast, $6,000 at an annual 8.50% interest rate represents an annual sum of $510. By proceeding with this plan, I would save an annual $403.20 ($33.60 per month). I have already proceeded with a $2,950 transfer from one account, leaving about $50 behind to cover the infamous $3.95 per month banking fee for 12 months.

This decision has left me feeling cash poor, and I am not fond of having to pay banking fees. It brings back memories of my early days when I was cash poor, though back then, I didn't mind because I was investing every penny I could to fulfill my investment dreams, which I achieved. Currently, I don't have a specific list of wanted stocks; I essentially have everything I ever wanted.

I still have another $3,000 available to deposit on my margin. I am waiting for my next paycheck and should be able to deposit $6,500, but probably not more than that, as I also have to cover my living expenses.

Option 2: To sell some of my investments to pay down my margin debt.

I don't have many options, and it basically comes down to options 1 and 2. Nothing complicated there. Paying down that margin debt is just as challenging for me as taking out all my belongings from my family house in New Brunswick: a painful experience. It felt heavy on my shoulders for a few days, but once the shock was absorbed, it was all good.

I may explore option 2 in more detail in another post to study possible solutions, but I am not willing to sell anything at this time. I prefer to be cash poor, like I was in my early investment years, living paycheck to paycheck...

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