Stocks, Debt and Tax Free Savings: Weekly Recap January 12th Edition

Welcome to my Weekly Recap January 12th Edition where I discuss some of the key events of the past week and provide an update on what I’m doing with my finances. This week it’s all about Stocks, Debt and Tax Free Savings.

Just a quick disclaimer here: I’m not a financial advisor, the strategies presented here are what I do for my own financial situation. Please remember to consult a financial advisor before doing anything that I mention in this post. Also this post contains affiliate links. As an affiliate of Questrade, Tangerine and EQ Bank this blog receives a small commission on any sign up.

Stock Market and Investing Update

After a horrendous 2018 the stock market seems to be bottoming out. Lots of financial experts are saying that Canada’s stock market, the TSX (or TMX), is really cheap. I’ve been saying that for months as blue chip dividend stocks – once the darlings of investors – were destroyed.

For the income investor this market meltdown has created lots of good opportunities to buy cheap dividend stocks and get a great yield. Not since 2015-2016 has these stocks – especially bank stocks – been so cheap. Week after week I reported to you guys how I was throwing everything I could into the market – even as it continued to go down. Markets can fall very fast, but they can recover fast too. So I just try to buy the sale and enjoy the eventual rebound.

Tax Free Savings: 2019 TFSA Top Up

It’s the start of a new year which means it’s time to contribute to the Tax Free Savings Account (TFSA). For those of you who do not use the TFSA to build wealth, check out my post on the TFSA and how to become a TFSA Millionaire. This year’s TFSA limit is $6,000! Now I had a lot of expenses last year so I wasn’t able to save up anything. But I do have dividend stocks in a non registered, taxable trading account.

Lucky for me both the taxable account and the TFSA is at Questrade. If you’ve never heard of Questrade you can Read my Review HERE. By having my TFSA and taxable trading account at one financial institution, I can easily transfer between the 2 accounts without filling out the paperwork to transfer from one bank to another. So I’m transferring my shares in kind from my taxable account to my TFSA.

When you transfer shares in kind it means that you are not selling them, just moving them from one account to another. There are tax implications if you transfer shares and they are above the price that you paid for them. That means you have a capital gain and you will pay capital gains tax on the transfer at tax time.

If you have a loss – meaning that the current price of the stock is below what you paid – then you can transfer them without any tax penalty. But you forfeit the ability to use the “capital loss” on your taxes. I’m fine with this because I hold my stocks for long periods of time. I’m more focused on building long term wealth in the tax free account. Plus sheltering some of my dividend income will help me out come tax time. Oh and I should mention that this same strategy works for an RRSP too.

Tackling our Mountain of Debt

Besides shifting investments around I also paid down some debt. This is good because investing and paying off debt are solid ways to build wealth and achieve financial freedom.

I’m also trying to hustle like crazy to earn extra cash. Last year wasn’t great for the finances and I’m determined to make up for lost time. We used debt to finance some of our home renovations and I want to minimize the financial impact of that choice. When we use debt we are essentially borrowing from our future. By earning extra money from a side hustle or second job I hope to make up for at least some of that.

I’ve written several post in the past few weeks on banking and ways to earn a few hundred bucks by signing up for Tangerine Chequing Account, (Click Here to Read my Review) or earning one of the best overall interest rate on your savings through EQ Bank (Click Here for My Review). If you haven’t done so already, check them out. With rising interest rates, people are starting to struggle financially so it might just be worth your while to make some easy money on a Tangerine Chequing Account or earning the bucks with a high interest savings account.

Happy New Year Everyone! And thanks for reading my Weekly Recap January 12th Edition.