A 49-year-old civil servant and blogger has $140,000 in her TFSA. Thanks to individual titles, he wants to allow the magic of interest to work for a long time. (Photo: courtesy)
SPOTLIGHT ON MY TFSA is a place where individual investors share with us their good and bad investment moves while submitting their portfolios for expert analysis.
(Drawing: Camille Charbonneau)
When his net worth (assets minus liabilities) crossed the seven-figure mark at the venerable age of 45, this former HLM resident in Little Burgundy celebrated the occasion in moderation, with a glimpse of the lifestyle he’s been living since his youth. . Getting out of poverty had been a powerful motivator for him, but once he reached that millionaire status, he took it all in stride. “Yes, it gave me the freedom to act. But otherwise, blah…”, says the one who doesn’t see any importance in bling and admits to having no taste for luxury. “To commemorate the occasion, I bought myself a vintage Honda motorcycle from 2003. It that’s all.”
Still, becoming a millionaire was his goal. “At home, my parents were able to borrow money every week. I quickly realized that I was at the bottom of the ladder and that I wanted to get out of it.” When he was growing up, he did many odd jobs (hawker, courier, etc.) and gave his mother a hand with. Taxes. “I was still not saving. I bought things that allowed me to escape, like my Commodore VIC-20.
Gifted in mathematics, he will receive loans and scholarships to enter HEC Montréal. “The idea was to increase my future prospects.”
Once his diploma in his pocket, he will enter the bank. “It was a click on the improvement plan.” He will have various positions (cashier, clerk, etc.) and quickly become a financial advisor after learning all the basics of the world of mutual funds and credit loans. There he meets many clients with high salaries, but few assets. “It’s not how much you make, but how much you can keep.” He will stay with his mother until his thirties and fully press the savings pedal. “I was able to buy my first triplex when I was 30.” Today, he also owns a duplex and two condos (including one for rent).
What about investing in bonds? “My RRSP is maxed out and I have a non-registered margin account. As for the TFSA, let’s say it was a coup: I’d like to have this tool when I’m 18.” Until the catastrophic crash, he had shares of National Bank in his self-directed TFSA (BN.TO, 91.90 $), exchange. -traded funds (ETFs) of major indices (TSX in Toronto and S&P 500 in New York) as well as mutual funds focused on small-cap securities and the Asia-Pacific market.
He decides to sell everything at the height of the crisis. “I left money on the table selling, but I made it back and more.” Elon Musk’s company, Tesla (TSLA, US$283.70), contributes 98% of its TFSA balance to SOFI (SOFI, US$5.92), an American online bank, and Electric Lion (LEV.TO, $6.94). . He knows his TFSA is heavily invested, but he has other ways to save in the event of a meltdown. “It’s a risk that I think and that corresponds to the weight of all my assets (real estate and money), not to mention my pension fund.”
In the eye of a pro
Martin Lalonde, President and Portfolio Manager at Rivemont, praises the investor’s journey and congratulates him on achieving his financial goals. “It’s great to see that. He learned, he used his technique, he was aggressive and now he’s reaping the fruits of his labor.
A portfolio manager sees two aspects in the financial and financial tool that a TFSA represents. “It’s another basket where asset classes can grow tax-free. But it’s also a great place to make incredible gains.” He believes that the self-directed investor is betting on home runs by focusing almost all of his savings in one name.
“He’s a high net worth guy and I understand his reasoning. He has other cards in his deck and can afford the potential weight loss in the event of a stock loss which, following a sale, could also result in a loss of TFSA position.” The fact that he sold his shares in his TFSA. a time of crisis, however, leads him to think that he can be comfortable with less liquid assets, such as real estate. “I don’t know the whole story, but it raises questions.”
About the TFSA collection at Elon Musk’s company? “Is the Tesla era ahead or behind the company?” he asks. He doubts it is visionary to invest in a Texas-based company at this stage. A portfolio manager will be more comfortable holding a few innovative companies with high potential. “It would give him more variety in a more speculative register.” Finally, Martin Lalonde does not see the importance of keeping those two positions in his portfolio due to their small size. “It doesn’t matter. Either you increase your position, because it fits your investment theory, or you sell it. A 49-year-old public servant and blogger has $140,000 in his TFSA. Thanks to individual titles, he wants to let the magic of interest work. work for a long time.