The TSX closed this past Friday's session at 25,274.30 points. For now, we are still in the 25,000-point range, and that's all that really matters. My non-registered portfolio closed today's session at $152,348.15, my US portfolio at $6,122.72 USD, my RRSP portfolio at $74,302.68, and my TFSA portfolio at $154,151.13. Once again, my TFSA portfolio value is higher than my non-registered portfolio, which has only happened a few times so far.
As I celebrate my fourth day debt-free, I received my first dividend distribution in my non-registered account over the weekend. Now that my margin debt has been completely paid off, I can clearly see what incoming dividends look like. Previously, when I had margin debt, the cash balance in my account appeared as a negative amount, for example, -$300. Instead of seeing a negative sign, I now see a positive balance with a dollar sign—what a relief! 😊 I also transferred a small amount of cash to my non-registered account to cover the interest charges.
Over the weekend, I noticed that National Bank Direct Brokerage's Fully-Paid Securities Lending Program finally kicked in! I registered for the program several months ago, but it probably didn't activate earlier because of my margin debt. After paying off the debt on December 12, I saw on December 14 that some of my stocks had been lent through the program. So far, two of my investments in my non-registered portfolio have been lent out:
- iShares S&P/TSX Capped REIT Index (XRE)
- National Bank of Canada (NA)
The choice of these two investments surprised me. I’m not sure who borrowed the shares or for how long, but since I plan to hold these stocks for the long term, the duration of the lending period doesn’t concern me. In fact, I assume that the longer the shares are lent, the better, as it might generate more income.
This is my first time experiencing the Fully-Paid Securities Lending Program, and I’m excited to see how much I can earn. When I signed up, I was told it was risk-free, so I’m looking forward to seeing how it plays out. If you're curious, you can learn more about National Bank Direct Brokerage's Fully-Paid Securities Lending Program on YouTube. The first time I heard about this program was with NBDB, and I haven’t explored similar programs elsewhere yet.
If I can earn even just $30 per month through this program, I’d be thrilled. Currently, I earn approximately $963 per month in dividend distributions. Adding a little extra income to reach a total equivalent of $1,000 per month would be amazing.
While enjoying my debt-free status, I’m considering my next steps. I have no choice but to focus on building savings. If I don’t, I might fall back into the habit of withdrawing money from my margin account, as I used to do. I would only do so in a real emergency, but my goal is to establish savings instead. While I dislike calling it an "emergency fund", that’s essentially what I’m aiming to build.
To accelerate this process, I’m thinking of continuing what I’ve been doing for the past few months: transferring the dividend distributions from my TFSA portfolio to my non-registered portfolio. Previously, I used this money to pay down my margin debt. Now that the debt is paid off, I can allocate these funds to savings. I currently earn over $5,000 annually in dividend income from my TFSA portfolio, and this could help me build my savings more quickly.
My target is to save $6,000—partly to eliminate banking fees and partly to cover emergencies or prepay for vacations and other expenses. It’s a gradual process, but I don’t want it to take too long. In total, I would like to have a $15,000 emergency fund.
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1 comment:
That is cool that you are now debt free, and receiving distributions from lending your shares. I've always been a bit scared about those programs, as what happens if the person borrowing your shares doesn't give them back? Probably a low probability of that happening.
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