Last week I made the biggest payment I will probably ever make on my HELOC. First of all, I finally sold the truck. I got $5500 for it, and gave the salesman that sold it $300, netting me $5200. Then I got the cheque for the hail damage which was $3200. I also took $5800 out of my TFSA that was only earning 1.35%, so all that, combined with my regular payment, totalled $15,150. That brings the balance on the HELOC down to around $65,000.
I also decided to stop putting $200/month into my TFSA, for the time being, because I am only getting 2.25% interest since CWB put their rate down. I will put that $200 on the HELOC also. It doesn’t make much sense to get 2.25% when the interest rate on the HELOC is 3%. I have enough in my TFSA to cover my expenses for 6 months or more in the event of an emergency, so I think when I decide to start making payments into it again I will put them in my ING Streetwise fund.
I am slowly coming to the realization that too much cash in my asset allocation is not a good thing. For a very long time I was scared of equities and put most of my money in GIC’s and savings accounts. Now I realize that to keep up with inflation, and hopefully get a better yield, I need to have some money in equities. I still don’t have a very high risk tolerance. If interest rates were higher I would still go with GIC’s, but the best rate I can find right now is 2.7%, and that just isn’t good enough. So I am putting money into ING’s Streetwise Balanced Fund, which includes equities and bonds.