Rent a trailer at Curve Lake, take everything you’ve got and grab a margin account with IB. Put it all down on BGZ and close your eyes. In two weeks you will be a multi-millionaire.

Move to Barbados and enjoy your new life on your sugar cane plantation.

you’ve either got a great job that doesn’t require you being in Toronto OR you bought a house over 7 years ago. If you’ve got a great job then rent your mansion in Peterborough. The opportunity to buy is not going ANYWHERE. Unlike some on this board i wouldn’t feel comfortable investing all that money in any basket of stocks/etfs etc. let alone a single “sure thing”. Not yet. What’s the rush? That you might miss out on the rally? Don’t buy into it. Save yourself the grief and purposefully wait for this nightmare to really be over before giving your money to anyone. For a house, for stock etc.

I think everyone should take it easy on the bargain hunting. I’m not a fatalist.. but seriously what’s the rush? When the market turns the opportunity to make money INCREASES.. it doesn’t disappear. Would you have a single regret if you were in cash in the market popped back to 14k? I wouldn’t.

Arthur beat me to it, but yes, you have to look at the dividend AND the schedule.

Some trusts have a monthly distribution, so you have to check.

http://www.tsx.ca gives you everything you need to know.

Q

If you buy a house for $350K, then maybe you can put the rest into TFSAs and maximize your RRSPs. If you are already doing that. Invest in a basket of ETFs, including some that pay dividends.

That being said, I am a firm believer that paying down NON-DEDUCTIBLE debt first is typically the best strategy in getting ahead. This guy has unbelievable equity to put into his home. Why not sink it ALL into the house. Based on a $55K mortgage, depending on term and amortization, he could be looking at monthly amounts as little as under $300. Assuming he has a pretty decent DINK income (dual income no kids), they are laughing at the leftover amount to purchase outside of the debt, both into an RRSP and in a TFSA, as well as a regualr open investment account, all while still having the opportunity to have a HELOC on the side, waiting for further investments.

It’s great to talk about dividend income… but if I were in his shoes, I’d be happy to have the majority of my non-ded debt paid off first, then grab an opp to do the SM with the HELOC and deduct interest on that income/dividend distribution.

All while maintaining nerves of steel during this questionable time in the markets. DCA into investments, and you should be safe.

Put a sizeable down payment on the house, that will keep your mortgage payments low. Look at buying some investments, whether it be dividend-paying stocks; especially bank stocks (like BMO), CDZ EFTs, income trusts or max. out your RRSP. If you do the latter, you’ll get a hefty tax refund and you can invest that further still.

By not putting all your money on the house, you’ll have some $100K to invest and that is pretty much a dream for most people right now, to invest with.

Happy planning!

We’ve sold our house and are renting a beautiful 2,200 sqft home for half of what a mortgage payment would be for the same house. Sit tight and wait for a year or two while the market adjusts and you’ll be buying the same house for $50k or $100k cheaper all the while making nice returns on your $400k investment.

Why not just buy the house outright? Anything you make as your job can be your dividends. Then invest that $ into the market and dollar cost average your way into dividend-stock heaven.

Amen to that. :) …and I also own a good chunk of BMO.

Sauce,

The $0.70 is the quarterly payout. The yearly dividend payout would be $2.80. Hope that helps!

Unfortunately, all the crazy panic is making even the savvy take a deep breath before jumping in.

Q

PS And as a side note, the TSX has seen a 300 point swing since my earlier post (it was down 160 and was last up 140 or so), this sort of volatility makes all of us crazy.

BMO’s purchase of AIG recently is indicative that dividends should not drop, but in this environment, winds may change very quickly.

There’s always been a fear that they’ll cut their dividend. But they haven’t done so in 100 and some years.

And they just spent $400 million on an insurance company. The unhealthy companies in this market are the ones that are selling assets at a discount, while the healthy ones are snapping up the deals.

I don’t think BMO would blow $400 million if they had a remote notion that their dividend would have to be cut.

The market is so out of whack with what is going on with several fundamentally strong businesses, and the public has bought into the fact that the sky is falling because many don’t remember the last recession (given that it was relatively mild and mostly hit the housing sector) that yields are crazy right now.

Keep in mind that Alberta was making good money at $30 / barrel way back in 2006 – years and years ago.

While 10% may generally be unachievable with dividends, taking a look at some good businesses (like BMO) who weathered a great depression and quite a few recessions, is probably not a bad idea.

Just my $Q.02 worth.

Q

Steve – lol on the blackfly net.

It was an income trust with a 10% yield, not a 10% dividend.

A 10% yield on an income trust is pretty conservative these days!

455K is a lot of money for a house.
I like the ideas of buying a smaller house with cash (maybe 350K) and then taking out a LOC and invest in good blue chip companies. The yield will be lower, but the dividends are taxed advantageously, and you don’t have to worry about the coming 2011 deadline for converting income trusts back to corporations (if the govt keeps that deadline).

$455k for a house in Peterborough? I can’t imagine houses are that expensive there which would indicate a rather large house. You might be better off buying a cheaper house for cash and investing the remainder in dividends stocks or even a dividend ETF.

By the way – a fund/stock that pays 10% dividend is either:

1) including a lot of return of capital – which is not taxed but is basically the same as giving you your money back or
2) about to cut the dividend.

1. Put all 400K into the house.
2. Use a Home Equity LOC to buy 200K of income yielding investments.
3. Interest on the LOC will be tax deductable, and the effective after-tax interest rate should be lower than the mortgage rate.

See the other excellent SM articles on this blog for more details.