The 49-year-old public servant and blogger has $140,000 in his TFSA. With separate titles, he wants the interest magic to work for a long time. (Photo: courtesy)
The focus of my TFSA is a section where individual investors share their good and bad investment moves with us by submitting their portfolio to a professional for analysis.
(Illustration: Camille Charbonneau)
Age: 49 | Occupation: civil servant and blogger
TFSA Cost: $140,000 | Strategy: individual promotions
Good move: keep winning titles for a long time
Bad move: wrong use of the “sell stop” function
Task: let the magic of interest act for a long time
His advice to the novice investor: start as early as possible and be patient.
When his net worth (assets minus liabilities) crossed the seven-figure mark at the venerable age of 45, this former HLM resident in Petite Burgundy celebrated modestly, imagining the lifestyle he has led since his youth. Getting out of poverty was a strong motivator for him, but once he reached the status of a millionaire, he took it all with detachment. “Yes, it gave me independence of action. And the rest, blah … ”, – says the one who does not attach any importance to chic-shawl and admits that he does not have luxurious tastes. “To celebrate, I bought myself an old 2003 Honda motorcycle, that’s all. »
Nevertheless, becoming a millionaire was his goal. “At home, my parents managed the borrowed money in installments. I quickly realized that I was at the bottom of the stairs and I wanted to get out of it. “Growing up, he will cling to odd jobs (camelot, courier, etc.) and help his mother with rent. “I haven’t saved yet. I bought things that let me escape, like my Commodore VIC-20. »
Gifted in mathematics, he will receive loans and scholarships and enroll at HEC Montréal. “The idea was to increase my future prospects. »
As soon as his diploma is in his pocket, he will enter the bank. “It was a trigger in terms of enrichment. He held various positions (cashier, clerk, etc.) and quickly became a financial consultant, having learned all the basics of the world of mutual funds and mortgages. There he meets many clients with big salaries but little assets. “It’s not so much about how much you earn, but how much you manage to save. Like Tanguy, he would stay with his mother until he was thirty and hit the savings pedal all the way. “I was able to buy my first triplex at the age of 30. Today, he also owns a duplex and two apartments (including one for rent).
What about investing in securities? “My RRSP is depleted and I have an unregistered margin account. As for TFSA, let’s just say it was a revolution: I would have loved to have this tool when I was 18 years old. Prior to the collapse of the pandemic, he held shares in the National Bank (BN.TO, $91.90), exchange-traded funds (ETFs) of major indices (Toronto TSX and S&P 500) in his self-managed TFSA in New York), and also as mutual funds , focused on small-cap securities and the Asia-Pacific market.
He decides to sell everything in the midst of a pandemic. “I left some money on the table by selling, but I recovered and even more. Elon Musk’s Tesla (TSLA, $283.70) accounts for 98% of his TFSA, the remainder is held by SOFI (SOFI, $5.92), US Online Banking and Lion Electric (LEV.TO, $6.94) ). He knows his TFSA is very focused, but he has other lifelines in case of a crisis. “This is a risk that I take on and which depends on the weight of all my assets (real estate and finances), not to mention my pension fund. »
In the eyes of a professional
Martin Lalonde, President and Portfolio Manager of Rivemont, praises the investor’s journey and congratulates him on reaching his financial goals. “It’s nice to see that. He studied, he applied his method, he was strict and now he is reaping the fruits of his labor.”
The portfolio manager sees two aspects of the financial and tax instrument that the TFSA represents. “This is another basket in which asset classes can grow tax-free. But it’s also the perfect place to make extraordinary progress. He is of the opinion that the independent investor made a bet on success, concentrating about all his savings in the title.
“He is a very valuable person, and I understand his reasoning. He has other cards in the deck and can afford a deadweight loss in the event of a stock smash, which, once sold, will also result in the loss of a place in the TFSA. However, the fact that he sold his shares in his TFSA during the pandemic makes him think he might be more comfortable with less liquid assets like real estate. “I don’t know the whole story, but it raises questions. »
As for the concentration of TFSA in Elon Musk’s company? “Tesla’s heyday ahead or behind the company? he wonders. He doubts it is smart to invest in the Texas company at the moment. The portfolio manager would be more comfortable holding a few highly innovative companies with high potential. “That would give him a little more diversification in a more speculative register. Finally, Martin Lalonde sees no point in keeping the other two positions in his portfolio, given their small size. “It does not matter. Either you increase your positions because it suits your investment thesis, or you sell them. »
If you too would like to share your TFSA investment strategy with the readers of Les Affaires and get an analysis of your portfolio from a professional, please email us at firstname.lastname@example.org