Talk Personal Finance – March 2015

Welcome to the start of March!

According from what I have read in the Thackray’s Investor’s Guide, March just happens to be a solid month for stocks.

Unfortunately, that just doesn’t seem to be the case so far! The Canadian Banks is continuing to struggle and it has taken quite a beating. I will be looking to buy more shares should they continue to decline.

As for the Energy sector, well it has been flipping and flopping a lot lately. Although I have mentioned that my portfolio is already quite heavily weighted in this sector, I just couldn’t help but invest further into it. I will go into further details of my acquisitions later on in the month when I do my quarterly portfolio update.

In any case, these are the things that have been on my mind lately:

An Update on my Financial Goals

To start off, I would first like to give a quick update on my financial goals.

Now that my TFSA is not far from being maxed out, I will be making regular contributions to my RRSP. I estimate that this year, I will be in quite a high tax bracket and that makes it the perfect opportunity for investing in it.

I plan to have my RRSP maxed out near the middle of the year. At that point, I will use the Home Buyer’s Plan to invest in my first property. Whether I choose to live in that property or rent it out for cash flow is still undecided right now. In the meantime, I will try to apply for mortgage pre-approval for when that time comes.

Obsession with Net Worth

After a 37% increase in net worth last month, I have been trying my best to post a somewhat comparable change in my next upcoming update. This will require that cut down on my spending. However, in an attempt to do this, I have been called out by my sister for being too cheap.

Most of my expenses come from eating out and I have been trying to minimalize that. Knowing my salary, my sister has become puzzled in this. I guess there’s a fine line between being cheap and frugal eh? After all, increasing net worth does not necessarily make you a happier person.

With that being said, I also believe that one of the key perspectives to have in the journey to wealth is having an abundance mindset. This way of thinking will help me train my risk tolerance level when it comes to making wise investment decisions in the future. This is why I have been trying not to quibble over two or even three digit expenses.

Portfolio Strategy: Dividend vs. Index

One of the financial dilemmas that I am still struggling with is the portfolio strategy mainly for my TFSA. I am still unsure of whether to prioritize dividend growth or capital gain growth.

I know that I have been flip flopping a lot lately between the two but I can’t seem to make up my mind. One thing I know for sure is that my hybrid strategy right now isn’t really practical. I should just pick one and stick to it.

One concern I have for a dividend growth strategy is that the TFSA only has a maximum contribution room of $36,500. It would be really hard to see any notable dividend earnings from that amount. I suppose there is always the option of making my RRSP a dividend portfolio as well and add up the dividends from both.

At the same time, I believe index investing may be a more practical strategy. Not only will it out earn my dividend portfolio with my current investing knowledge but it will require less management. Unfortunately, I have some sentimental values attached to the stocks I currently own and have a reluctance to liquidate them. I will post my decision when I can actually make up my mind.

Interesting Reads

Here are the interesting reads for this month:

 

 

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9 Responses to “Talk Personal Finance – March 2015”
  1. B March 5, 2015
    • Jeff March 14, 2015
  2. Vivianne March 5, 2015
    • Jeff March 14, 2015
  3. KingAce March 5, 2015
    • Jeff March 14, 2015
  4. Emily March 10, 2015
    • Jeff March 14, 2015
  5. No More Waffles March 15, 2015

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