My Reflections on Becoming Debt-Free by the End of December, This Year!

Yesterday, I decided to sell the BCE shares in my non-registered portfolio. As a result, my dividend income took a small step back, but nothing significant. The dividend income from my non-registered and TFSA portfolios now stands at an equivalent of $954 per month. The proceeds from the BCE sale were applied directly to reduce my margin debt, simplifying my finances as the funds went straight toward debt repayment. Following Telus Corp. (T), which recently announced a 3.4% dividend increase, Suncor (SU) announced a 4.6% dividend raise today. In my portfolio, which you can view here, I hold Suncor shares in both my TFSA and RRSP portfolios. Adding a steady income stream through high-dividend stocks has been an essential strategy in building my investment portfolio. However, when I feel the need to sell a stock, I do so—though it happens quite rarely.

My margin debt is currently at $3,670. By the end of November—thanks to having three paychecks this month—it should be reduced to $950. This means I’ll finally be debt-free by the end of December! It has taken quite a while to get here, but that’s because becoming debt-free wasn’t an immediate priority. When I opened my margin account, interest rates were very low, and at one point, my margin debt reached nearly $100,000. I enjoyed leveraging my margin account to invest strategically. However, with today’s high interest rates, I've spent the past year actively working to pay down my margin debt. It hasn’t been easy, but I made it through. I must admit that I had doubts about the whole process. I never thought I would actually become debt-free, to tell you the truth.

By the end of December, in addition to being debt-free, I’ll have a small surplus of around $1,330 in my savings account. I could invest this in my RRSP to increase my 2024 contribution, but for now, I’m more inclined to keep it in savings. I’ve been wanting to build up my emergency fund for a while now. On my investment portfolio page, the section labeled "Cold Cash" reflects my current savings, which stand at $579.34. One major reason building my savings is my top priority—after fully paying off my margin debt—is to avoid needing to borrow from my margin account for any regular or unexpected expenses. I’ve lived paycheck to paycheck for most of my adult life, but now, at 44, I’ve decided it’s time to build a solid financial cushion. I feel like I’m finally starting to act like a responsible adult—or something close to it. It’s not that I haven’t taken my personal finances seriously, but paying down debt and building an emergency fund are relatively new concepts for me.

When I started investing back in 2007-2008, my focus was entirely on building a portfolio filled with stocks I wanted to hold, constantly planning my next stock investment. It became something of an obsession—a positive one that has led to my current portfolio value of around $455,000. Now, I don’t feel the same urgency to invest; I’m taking a more steady, long-term approach. For 2025, my goal is to build my savings to $20,000. It’s an ambitious target, especially starting with only $1,330 in January, but every journey has to start somewhere. Having a steady dividend income from my non-registered and TFSA portfolios makes reaching this savings goal more achievable.

Once my margin debt is fully paid off, I plan to keep the margin linked to my non-registered portfolio. I believe it’s the right choice; if I need funds and don’t have enough in my savings, I can use my margin instead of relying on credit card debt, which is far more costly. It’s been a long time since I’ve seen my margin balance at $0, and I’m curious to see how it will look in my non-registered portfolio once it’s cleared. I’m also interested to see how my dividend income will be displayed. We’ll find out in less than two months!