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Stocks

mimico_polak said:
Well there's no tax because it's a TFSA...so my plan was to buy 5k worth of dividend paying stock...pay down the 5k, while those grow. Then buy another 5k....pay down...5k...pay down...

I've got 70k worth of space in my TFSA so it's just a way to speed up the filling up of this account. I'm ok with paying some interest but just want to speed up the process. Things go sideways...sell the TFSA and just pay back the LOC.
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Keep in mind most people that borrow to invest do it in a non registered account. This way they can deduct the amount of interest paid from income and also if they did have to sell at a loss they can use those losses to also deduct from income.

I know you have a different goal in mind with the TFSA but just mentioning it as something to look into.
 
blackcamaro said:
Keep in mind most people that borrow to invest do it in a non registered account. This way they can deduct the amount of interest paid from income and also if they did have to sell at a loss they can use those losses to also deduct from income.

I know you have a different goal in mind with the TFSA but just mentioning it as something to look into.
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That was my original consideration thank you. I was speaking with a friend that did the TFSA thing and I never considered that avenue. I think I'd prefer to load up the TFSA before I worry about saving interest as an expense...but definitely that's how my thought process started.

Tangerine offered up 30k for 1.99% for 90 days and 2.45% moving forward...so Prime+0% works for me.
 
mimico_polak said:
Looking for some recommendations on solid and safe dividend stocks.

Not looking to do the quick turnaround, so something long term.

Obvious choices are banks and utilities (Enbridge for instance).

Any others?
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I gave you DIV.TO ages ago.
I bought more last week.
DRIP

DFN.TO. Juicy 14%'er.
Down today. I'm logging on in a minute to buy more of it.
DRIP
 
GreyGhost said:
Most of my securities are not DRIP eligible so I use DPP which is similar but broker side instead of security side. Company pays dividend and broker buys as many shares as possible with no fee from that money. That only buys whole shares.

I checked RY which is a DRIP. It is only buying whole shares. The bookkeeping they do is strange, I will need to look at it more to see what happens. I got a dividend in cash on Nov 24. On Nov 24, that dividend was removed as cash for reinvestment. On November 29, there was a buy for as many whole shares as possible out of that dividend. All good so far, that all makes sense. On Nov 29, there was then an entry for reinvestment that added the entire dividend back as cash. That one makes no sense, I think it should be dividend minus buy back as cash. Of course the investment account doesn't provide a running cash balance to see what is going on. Once quicken is updated I should be able to see what is happening.
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DRIP was cancelled on all of my DRIPpers during the covid lockdowns. Reinstated on all of them.
 
Gary said:
I gave you DIV.TO ages ago.
I bought more last week.
DRIP

DFN.TO. Juicy 14%'er.
Down today. I'm logging on in a minute to buy more of it.
DRIP
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I’m holding DIV.TO since that time you told me about it.
 
T
GreyGhost said:
We'll see how this goes. Just used HELOC to increase invested money by ~10% in dividend heavy securities. Wife will be thrilled.
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That’s what my buddy did. Dropped 70k into dividend paying stocks without telling his wife out of the HELOC….gamble but it paid off massively.

I do not have nuts of steel.
 
mimico_polak said:
T

That’s what my buddy did. Dropped 70k into dividend paying stocks without telling his wife out of the HELOC….gamble but it paid off massively.

I do not have nuts of steel.
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Heloc sends her a physical letter when transactions happen. We live in the same house. Last letter showed that I had deposited a dollar and had the heloc owed us $1. Not sure why she gets letters and not me but whatever. Maybe if she does something with it, I get a letter.
 
backmarkerducati said:
Personally when I have ran the numbers on it specifically it never seemed too lucrative to me but what you guys are talking about reminds me of "The Smith Maneuver".

www.investopedia.com

The Smith Maneuver: Definition, How It Works, and How to Use It

The Smith Maneuver is a Canadian tax strategy that makes interest on a residential mortgage tax-deductible.
www.investopedia.com www.investopedia.com
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I don't like smith maneuver. Too many moving parts and imo a high liklihood that CRA will say hell no and then you are left with all of the expenses, the tax to pay and a penalty. It's low hanging fruit for CRA to kill as the average voter could care less and they see this as beating down the dastardly 1% (whom I suspect are not using it but it's all about optics not reality for government enforcement).

Borrowing to invest is cleaner. Assuming you are in a non tax-advantaged account (ie a cash account, not TFSA or RRSP), you can write off the interest on the loan as an expense incurred to earn money. To keep things clean, I plan on limiting the transactions (especially by time as if you borrow multiple times per month and some goes in tax-advantaged accounts and some goes in non tax-advantaged accounts, it becomes a lot more complicated to allocate interest charged), not holding cash in an investment account (eg return it to LOC if it is not invested) and not making too many trades (otherwise CRA can declare it income from trading employment as opposed to dividends from passive investing).
 
backmarkerducati said:
Personally when I have ran the numbers on it specifically it never seemed too lucrative to me but what you guys are talking about reminds me of "The Smith Maneuver".

www.investopedia.com

The Smith Maneuver: Definition, How It Works, and How to Use It

The Smith Maneuver is a Canadian tax strategy that makes interest on a residential mortgage tax-deductible.
www.investopedia.com www.investopedia.com
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I've spoken to my broker about this a couple of times and he's really been against it. Basically said 'why risk your house for an investment?' and that you really need to know what you're doing...

He's basically saved me from myself in not actually refusing my requests for HELOC or more money tied to the house...but just highly recommending against it with the caveat 'I'll do it if you want. I make more money, but you're the one taking all the risk and I don't recommend giving the bank any more fingers into your house than absolutely necessary.'
 
mimico_polak said:
I've spoken to my broker about this a couple of times and he's really been against it. Basically said 'why risk your house for an investment?' and that you really need to know what you're doing...

He's basically saved me from myself in not actually refusing my requests for HELOC or more money tied to the house...but just highly recommending against it with the caveat 'I'll do it if you want. I make more money, but you're the one taking all the risk and I don't recommend giving the bank any more fingers into your house than absolutely necessary.'
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With house price runup, my approved HELOC plus mortgage amount is about 40% of the FMV of the house. I pulled <20% of the HELOC. I'm not really risking the house but I am clearly risking more years to pay off the loan (and probably a credit score hit as I am accessing additional credit). Worst case, investments go to zero (unlikely as I am buying funds not individual companies with this money) and I can't afford to service the heloc debt (which would require an income hit and interest hike). Mortgage is up in two years. Make it until then and roll heloc into mortgage. Adds a few years to the back end, total borrowed amount still less than original mortgage amount, size of heloc decreases (unless they re-appraise the house in which case size of heloc goes way up).

In the interest of making mortgage revewal more flexible, I think all dividends between now and then will be used to reduce heloc. After mortgage is renewed, re-evaluate whether to change to drips, liquidate and abort this strategy or borrow more.

Stupid housing prices have warped my sense of money. I think this has happened to many people. With most houses now in low seven figures, four figure loans that hurt when coming out of salary are entirely inconsequential on the books. To try to make any meaningful change, at least five figures are required (and probably six but I like to be married and she may kill me). Paying that back from conventional working income is very painful.

EDIT:
FWIW, one up, 12 down today. On the upside, the dollar value up substantially exceeds the dollar value down.

Scotia itrade has a programming hiccup in flightdesk. For the top P/L per day chart, it multiplies the daily change by the number of shares you have. If you bought during that day, you probably didn't buy at the opening price and the P/L shown will be wrong (both percentage and dollars).
 
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These days you are probably not risking your house on a HELOC , but your still on the hook for the money no matter which way it goes. And it can suck.

I had a fair bit of money borrowed on a heloc when everything went in the dump in 2008, I owed many thousands. We bought our way out of the predicament but it was expensive and painful. Only dig a hole as deep as your prepared to climb out of.
 
backmarkerducati said:
Yes for energy and banks.... Also, don't forget to do a DRIP if you have enough to get shares from the DRIP. Might as well compound!

Another one that I have done off and on is Pizza Pizza Royalty Corp (PZA.TO). Currently ~6% yield, I have seen it as high as 9%. I have not been in it for a few years though and there was a rough patch a while back. So really one to keep an eye on.

IMO, avoid any that pay more than EPS, that is always bad news and can be far too common as they are yield driven. Even ones that pay out almost all of EPS as they are not reinvesting in the business. PZA.TO pays out near 100% but it is a bit of an exception IMO, it is not like there is a lot of R&D in pizza....
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Now that you bring this up pizza pizza is expanding into Mexico. I have no opinion as to whether that is positive or negative. It could go either way.
 
mimico_polak said:
That was my original consideration thank you. I was speaking with a friend that did the TFSA thing and I never considered that avenue. I think I'd prefer to load up the TFSA before I worry about saving interest as an expense...but definitely that's how my thought process started.

Tangerine offered up 30k for 1.99% for 90 days and 2.45% moving forward...so Prime+0% works for me.
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In an unexpected twist, there was a letter from the bank, HELOC is 1.49% for six months (up to 100K), just spend from it to initiate the offer. They really want people to get on the hamster wheel and hope they can't get back off. Apparently excludes transfers to other accounts so I may not qualify. If so, I'll have a chat with them and ask if they really want me to move my money to another bank in order to qualify. Stupid.
 
GreyGhost said:
In an unexpected twist, there was a letter from the bank, HELOC is 1.49% for six months (up to 100K), just spend from it to initiate the offer. They really want people to get on the hamster wheel and hope they can't get back off. Apparently excludes transfers to other accounts so I may not qualify. If so, I'll have a chat with them and ask if they really want me to move my money to another bank in order to qualify. Stupid.
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FREE MONEY! Bet it all on black….
 
The only way I have made money with stocks is to buy up after after market takes a dump. Needless to say, I went on a spending spree today but I'm going to be watching things VERY closely. The markets are so illogical anymore, you might as well just use tea leaves....oops I meant Fibonacci chart analysis...and by the way, I wouldn't be surprised if some ass invented it and gave it that name (read "FIB") knowing it was a joke and that millions would latch onto the mumbo jumbo (since they don't want to bother researching fundamentals...my useless BIL , for example...who explained Fibonacci like it was the be all and end all, meanwhile Im thinking its utter and complete nonsense)
 
Freddy Fudpucker said:
The only way I have made money with stocks is to buy up after after market takes a dump. Needless to say, I went on a spending spree today but I'm going to be watching things VERY closely. The markets are so illogical anymore, you might as well just use tea leaves....oops I meant Fibonacci chart analysis...and by the way, I wouldn't be surprised if some ass invented it and gave it that name (read "FIB") knowing it was a joke and that millions would latch onto the mumbo jumbo (since they don't want to bother researching fundamentals...my useless BIL , for example...who explained Fibonacci like it was the be all and end all, meanwhile Im thinking its utter and complete nonsense)
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Like anything, technical analysis is not the end all be all but it does have some (not a huge amount) of merit

If y’all want some entertainment, the Benjamin YouTube channel is hilarious while actually have good general info

 
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