First off, this TFSA Tax Free Savings Account is awesome because you do not have to pay any taxes on capital gains or dividends earned in this account.
Only bad part is that you cannot deduct losses and claim the realized losses on your taxes in this account so I mainly use it for my favorite stock which is TESLA and Dividend stocks and ETFs. Yes I am a Tesla Bull and I believe Tesla will one day surpass Apple as the biggest Tech company. Cross my fingers and hope Im right.
For a married couple such as myself, its nice to have 2 TFSA's account and the compounding is much faster. If you havn't already, Max this TFSA accounts first!
My strategy is not investing advice but its how I am approaching Investing and taking care of My wife and my ( Our Families ) Portfolios. I have to be careful and disciplined because its just not my money but my wife and kids as well. Being the Leader and head of my house, I cannot afford to be Careless. I am a core Dividend/Income/Options investor and so whether the markets are up or down, we receive paychecks. Almost all of our stocks/ETF's are Long Positions and I have no intentions to sell anything after the initial purchase.
After you have Maxed out the TFSA and RRSP's. The Margin account is my favorite account.
Margin is a powerful tool to enhance returns but proceed with caution and dont be so reckless and careless when using Margin. It is a double edged sword.
Personally, just like a Mortgage when purchasing a home, you are able to use the bank's money and finance/mortgage your house. Margin uses your Stocks as collateral and in return, your brokerage will lend you money which increases your buying power.
Personally, I will only use 20 percent of Margin or 1.20 so meaning If my portfolio is 1 Million, I will borrow 200k so portfolio at 1.2Mill. Portfolio at 2 Million, i will borrow 400k. Portfolio 5 Million, I will borrow 1 Million. Please do not follow my advice as everyone's risk tolerance and portfolio setup is different. My borrowing is very modest and being a careful and strategic planner, I will be able to pay the loan down no problem.
CASH in Margin Account is a Must!
I have a lot of CASH ETF's in my Margin and being in the higher Interest Rate era that we are now, 2023 and beyond, Cash pays around 4.5 to 5 Percent so why not hold Cash? Also, it does not fluctuate so if we have a crash and downturn, Cash will whether the storm and act as a parachute for your stocks. Also, when you Pair Cash with your other investments, your Risk is decreased and you will have less of a chance of the dreaded Margin Call.
Here are all the Cash ETF's I own.
CSAV - CI High Interest Savings ETF
HISA - High Interest Savings Account
CBIL - Horizons 0-3 months Canadian Treasury Bill
HSAV - Horizons Cash Maximizer ( Love this one as it leaves its distributions to compound)
CASH - Horizons High Interest Savings ETF ( My Favorite - I love the name! )
MNY - Purpose Cash Management
PSA - Purpose High Interest Savings.
Owning all these are more psychological for me. My money is safe while generating a decent income. These are all Core positions along with my favorite all in one ETF's.
Owning the World and indexing is a must for any Do-it-yourself Investor. Why not incorporate these all in one ETF's as an anchor to any portfolio for diversifcation and for its passive nature.
Here are the Index ETF's I own and mind you, a lot of them overlap each other or replicates of each other but provided by different providers but I dont mind. Again, its more Psychological for me. I just enjoy Collecting Assets and so why not? Since we own so much CASH, I dont need bonds and so these are ALL EQUITY.
VEQT - Vanguard All Equity
XEQT - Ishares All Equity
ZEQT - BMO's All Equity
VFV - Vanguard's S&P 500 Index
Please Keep an open mind but Options in my opinion alongside CASH investments, Index ETF's and Blue Chips Dividend stocks paired with Growth Stocks is my way to create a sound and steady income producing portfolio.
Options is such a great way to generate extra income. Since our portfolio is in the Multi Millions now, with money and having money, it is easier to make money.
THE MORE YOU LEARN, THE MORE YOU EARN
With Options, you are able to write contracts on stocks you already own but in my case, I just use Calls on Tesla all day since Tesla is our biggest position. Since we own so much Tesla, and our shares being called away, we are still participatng in the upside of the stock with the remaining shares.
Also, Since my wife and I Love TESLA, we are and will be buying more every month. As of this Moment, July 31st 2023, Tesla is at 266 with a market cap of 844 Billion. Let's say it and hopefully it X5 from here and by 2030, it is 4.2 Trillion Market cap with a Share price of 1330.
Options doesn't have to be complicated. You can do it on any stock you own but in my case and being a Tesla Perma Bull, I know and understand Tesla and can stomache it's volatility so doing options only on Tesla is easy for me. After you do it a few times and follow a stock each and everyday, you have a good feel for it. Please Follow Matt Pocious on Youtube if you wanna learn more about Tesla as He is my favorite person. Such a bright young man.
Anyways friends, this is my strategy and I wanted to share with you all how I do it.
-I will Continue to HUSTLE and SAVE and INVEST.
-I will Continue to RE- Invest all the dividends back each month to further Compound the portfolio.
-I will Continue to buy CASH ETF's to protect and anchor my portfolio from Downturns.
-I will Continue to buy Index ETF's for its Passive nature to participate in the markets especially the U.S.
-I will Continue to use Margin but only responsibly and at a modest leverage of 20 percent.
-I will Continue to buy Tesla Stock each month and will build a massive position.
-I will Continue to Generate Extra Income with Options and reinvest back the income to further compound the portfolio.
Lastly, I will always have a good time and practice being Grateful each and everyday. As long as we have continued health, we are blessed! Everything after that is all icing and extra.
Life is beautiful and let's continue to be the best we can be friends! Keep conquering your goals and ignore the noise. There will always be haters but forget them and use them to fuel yourself into being great. No one will see your journey like you do or support you like yourself would so Just keep on doing you! Good luck to you all and cheers my friends!
Copyright © 2023 Dividendhustler - All Rights Reserved.