Since I’m going back to school in September, I have started to reminisce about the good ol’ times of my undergraduate degree, when I had absolutely nothing to worry about except to get good grades, work at my care-free retail part-time job, and party on the weekends to try and score free drinks from boys.  I had a pretty balanced student lifestyle, I was active in the school clubs and committees, I worked, I studied, got some scholarships, and I partied.  It was a pretty fulfilling undergrad.

I regret that I partied so much and wasted all that money I worked so hard to make.  But hey, you’re young only once, right?  However, there is something else I regret.

I wish I had started investing earlier.  I met a guy in college who was passionately involved with stock picking and trading (can you say HELLO what a turn on??) and his passion rubbed off on me.   He would do this instead of working a part-time job earning $9.50 an hour like I did, and he paid his way through university with his investments.  Inspired, I bought one or two stocks through my mom’s BMO Investorline brokerage, because at the time I didn’t have a brokerage account.  Thinking back, it was my first lesson in investing, don’t take hot stock tips from friends and acquaintances, especially if you don’t understand what you’re buying!

But I digress.  The old days of expensive brokerage accounts and commissions have vanished.  Things have changed, fast forward to 2011 and young Canadians these days are so lucky- they have the option of contributing to a TFSA.

In case you haven’t heard, a TFSA is a Tax Free Savings Account introduced by the government a few years back.   In a nutshell, you have to be 19 years and older to contribute to one and you can contribute $5000 per year of your after tax income.  You can withdraw the money any time but must wait until the next calender year to put that money back (only if it exceeds your combined contribution limit) or else you’ll be dinged with over-contribution charges.  If I were 19 now and a student, I would invest in a TFSA rather than an RRSP, that’s for sure.  I would also enjoy my beautiful youthful looks too HA!

As a student, you may think you’re at a disadvantage because you ARE a student and are relatively income-less, but you have time on your side.  Time my friend, is a very beautiful thing.

Here are the TFSA options:

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This is the last of the four part series in which I disclose in a sneaky and mysterious manner what I’m holding in my Tax Free Trading Portfolio for 2011.  In the first part of the series, I talked about Exchange Income Corporation (the aviation/manufacturing company), the second part I mentioned Just Energy, and last week, I talked about Sun Life. This week, the last stock I bought for my 2011 portfolio is very different from the above manufacturing/ utility/ and financial industries.

I had thought about owning this stock for a bit of time, ever since I did a post on it recently.  However, I was again hesitant due to the nature of the sector and the state of the economy.  How can a company that is considered a “non-essential” part of life possibly do well?

My mind changed, however, when I paid a visit last year (whereby the economy was still wobbly and the markets were schizophrenic).  The place was absolutely packed and people were having a good time.  Money was being spent like you would not believe (not too much by me, of course… it was just an observation on my part by looking around the room).  I thought…recession, what recession?

This company did not incorporate and instead stayed on as an income trust (and I am glad I’m holding it in my TFSA of course, otherwise I would be taxed to the nines).  Because of the taxation on the company thanks to the new Specified Investment Flow-Through Trust Tax “The SIFT Tax”, the distributions have decreased from $0.11 a month per share (about 9.9% annual yield) to $0.08 a month per share (about 7.2% annual yield at recent price point).  This is the only holding in my portfolio that has actually stayed on as an income trust.  All the other ones converted to dividend paying corporations.

Recent Year end Results have been good and better than expected.  Their financial information looks solid too.

• P/E of 10.79
• Price to Book Ratio of 1.29
• Huge Gross Margins of 93 when the sector average is a measly 8.76  (I guess they get their product from Alberta on the cheap!)
• It is near the 52 week high though (hmm what isn’t?   )
• Annual yield from distributions of 7.2% paid monthly
• The main company office is based right here in Vancouver (well, actually Richmond, but same thing, right?)
• First started in North Vancouver in 1971 and now has over 100 locations all across North America
• Their commercials are very alluring and seem to stimulate your senses
• Since 2003, holds the title of One of Canada’s Top 50 Employers compiled by Aon Hewitt every year.

Alright enough beating around the bush… did you guess it?  I was very vague about it because it’s very easy to guess.

One major hint- I talked about it in the Cheap and Good Eats Section (it’s a Good Eat, and not a Cheap Eat).

If you guessed The Keg- You’re the winner!  I might treat you out to the Keg if you guessed it right (sorry, got your hopes up!).

Next time I go to the Keg, I’ll feel better ordering that glass of wine and a steak, knowing that I own a small portion of that company and am getting paid monthly for good earnings and profit.  It’s a seemingly win win situation, I tell you.  And you know I’m a fan of those.

I don’t think I would hold on to it for long term though, nor do I think I will be adding to my current position to KEG.UN.TO.  I’ll wait and see how it performs.

Readers, would you buy equity in the restaurant industry or does buying in the restaurant sector seem too risky?

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Here’s part three of the five part series on what I’m holding in my TFSA. We’re halfway through, so just one more Wednesday of putting on your thinking caps and guessing what equity I bought and it’ll be back to my regular posts.

In this series, I am sharing what my holdings are (or what I bought) in my Tax Free Trading Account for 2011. I had income trusts in 2010 and sold them all off due to being weary about what might happen come January (which is now a few months ago– time flies!) when they slash their distrubutions due to them being incorporated.

The last two weeks, I talked about EIF.TO and then JE.TO both doling out huge dividends (8-9% annually). This week, you can try to guess the next holding I have in my small TFSA portfolio.

Here goes- put on your thinking caps:

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Alright, I promised that I would share the other 4 equities I bought to hold in my TFSA aka Tax Free Trading Account. With the markets plummeting these past few days, it might be a good idea to load up on some stocks you have been keeping an eye on. The volatility is back.. stocks are on sale (that’s how I like to think of it, anyway).

Like last week’s post, I had you try to guess what the equity I bought in my TFSA was. So I’ll try and do the same again this week.

I had bought a very small amount of shares of this income trust before 2011 rolled around.  With the newly added money ($5000) I put in last month, I added more shares to equal 100 shares.  When I get more money in my TFSA from my tax refund, I plan on buying more of this stock.

Alright, here goes, time to put on your thinking caps:

• This is another big dividend payer- 8.28% annual yield  (that’s $0.10333 per share per month or $1.24 per share a year)
• They didn’t decrease their payout to investors even though they converted from an income trust to a corporation (one of the few ones that didn’t).  This says a lot since the government changed the tax structure, so they are being taxed and still paying the investors the same amount.  That says a lot.

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As you know, I sold off my Tax Free Trading Account portfolio (remember, it’s a “souped up” TFSA) and took the money out for the house down payment.  My portfolio was up about 20% Return on investment, but 2010 was such a great year for making gains on the stock market, I’m sure most people had similar returns (20% beats the 1.5% in a regular ol’ TFSA any day- though of course there is risk involved) .  I then transferred $5000 of my non-registered money (I sold a few loser stocks there as well) into the Tax Free Trading Account.  I will have $10,000 remaining that I can put in, and I plan to put my tax refund into my TFSA and RRSP this year too.

The reason why I sold off a lot of my TFSA portfolio was also because of the changes in terms of taxation on the income trusts I was holding- they had to convert to corporations and a lot of their distributions (read= 9-11% per year given back to you) were going to be slashed big time.

I thought I would share my picks for this year and give the reason why I chose the particular investment.  This year, it was more difficult to find bargains in terms of more bang for your buck because lots of stocks were trending at their 52 week highs.  Ideally, I would like for the stocks I pick to perform well (duh, who doesn’t?) but I would be happy if it stayed “status quo” too because they will pay me some juicy dividends anyway.

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