Surprise! I Am Now Debt-Free!

Something quite important happened today: my margin debt is now completely paid off. I had hoped to achieve this milestone this year, but I honestly didn’t think it was possible. However, as the months went by, I got closer and closer to being debt-free. And finally, today, it happened. It has been a long process.

One of the reasons I thought I wouldn’t be able to pay off my margin debt this year was because it felt so overwhelming. I kept looking at my balance, and there was always a little something left to pay. I had to put in serious extra effort to stay in control of my spending and ensure I had enough savings to cover the debt payments.

I don’t even remember the last time I was debt-free, but it must have been a very long time ago. I opened my margin account for my non-registered portfolio back on December 11, 2010. Almost exactly 14 years later, I’ve finally cleared it. Debt has never been a problem for me; I didn’t mind carrying it because, for a long time, interest rates were low, and it made sense to buy great stocks on credit.

Now, the situation has changed. Interest rates are higher. While we’ve recently benefited from a small rate cut, it’s still not enough to justify buying stocks on credit. The political environment is also very different from 14 years ago. With Donald Trump in the mix, we need to brace ourselves for potentially more volatility in the coming years. Additionally, 2024 has been a fantastic year for the TSX, but I don’t expect the same level of growth in 2025. It’s challenging to deal with market volatility after experiencing such consistent gains. Eventually, my net worth could be affected and drop below $467,000. I am mentally preparing for that possibility. At this point, my next obvious goal is to reach a net worth of $500,000. However, it may not happen as quickly as I would like.

For all these reasons, my primary focus for the early months of 2025 will be to build up my savings. I should be able to close 2024 with around $500 in savings, if not a bit more. I prefer to estimate $500 because I will likely spend a bit between now and the end of December. While $500 isn’t much in terms of savings, it’s a good first step in the right direction. Currently, I pay around $12 per month in banking fees because I don’t maintain the minimum balance required to avoid those fees. Over time, I hope to build enough savings to eliminate those charges.

On another note, I recently received my updated COVID-19 vaccine. This time, my arm hurt for two days, and I felt a strange tingling sensation where the needle was inserted in my left arm. Typically, my arm hurts after the shot, but I’ve never experienced this tingling before. It was a bit odd, but everything is back to normal now.