Debt Free in 30

My guest today is Hilliard Macbeth, an investment portfolio manager and author of When the Bubble Bursts: Surviving the Canadian Real Estate Crash. When Mr. Macbeth first appeared on this podcast just over 3 years ago we discussed his prediction that the real estate bubble would burst.

My first question to him today: did it? Was your prediction wrong?

We also discuss how money is actually created (it's not how you think) and how banks and faulty economic thinking have contributed to our massive levels of debt.

He's got advice if you are thinking of buying a home, so this is a "must listen" episode.

Even though the economy appears to still be in good shape, our stress levels are very high. Why?

On today's show I explain that everyone isn't benefitting from the good economy; the cost of living is high; we have longer commutes to work; we are carrying more debt and we use debt to survive.

I provide my advice on how to deal with high stress in today's stressful world.

You've heard of the five stages of grief; today Scott Terrio returns to discuss the 5 stages of debt, with examples from the people we meet with every day.

Stage 3 (Bargaining) is where we can make the most mistakes; stage 4 (depression) is where most people are when they reach out for help, and stage 5 (acceptance) is the most important stage to get a fresh start.

Lots of client anecdotes on today's show!

Today on the podcast we have a first time guest, Danielle Park, a Chartered Financial Analyst and the President and co-founder of Venable Park Investment Counsel Inc., a money management firm.

In her book, Juggling Dynamite, she accurately describes the risk of excessive debt, and she says that she has come to "see credit and prescription drugs as some of the great ironies of our time."

On today's show Danielle explains why saving money is more important than making money, the importance of liquidity, and how to build wealth in a challenging world.

For the average Canadian family, their largest monthly expense is their rent or mortgage payment, and unless they have a very expensive car, their second biggest expense is often food.

If you have a limited income, how can you manage your food budget effectively?

Is it possible eat healthy without breaking the bank?

On today's show we welcome Heidi Pola, a Registered Dietitian who gives practical advice on how to eat healthy and save money.

You've got debt, you think you might need to file a consumer proposal or go bankrupt, but you're worried, because you travel for your job, or you have a family vacation booked, and you are worried that if you are bankrupt you may get stopped at the border.

Is that a thing?

Can you travel while you are bankrupt?

That's today's question here on Debt Free in 30, so to discuss it I'm joined by Ian Martin, a Licensed Insolvency Trustee with Hoyes Michalos here in Kitchener.

When I ask my clients "what happened; how did you get into so much debt?", they tell me that the credit card company offered them a credit limit increase on their credit card, so they took it. Or, they offered me a line of credit, so I took it.

Makes sense; if someone offers you something, you take it.

But is it always a good idea?

What should you watch out for?

So today on Debt Free in 30 I've invited back Diane Cunha, who was with us back on show 235 when we talked about credit cards; today we'll have a discussion about the pros and cons of pre-approved credit limit increases and lines of credit.

I'm going to explain why conventional wisdom says they are a good idea, and Diane will explain why the conventional wisdom is often wrong.

When Sears went bankrupt and the employees discovered they wouldn't get their full pensions, there was an understandable outcry, and many people has said that the solution is to make pensions the first creditor to be paid in a bankruptcy, ahead of the banks.

That sounds good, but that policy may cause some unintended consequences that hurt workers, as we explain on today's podcast, and we offer some other solutions to this very serious problem.

Debts arising from the failure of a business is a common reason that someone may have to file a personal bankruptcy.

That's not surprising; you borrow money personally to invest in a business, it doesn't work out, you're left with the debt, so you file bankruptcy. I've personally done hundreds of bankruptcies that were the result of a business failure.

So what can you do to reduce the chance of business failure?

Or stated with a more positive perspective, what can you do to make your business a success?

That's the question I'll answer on today's edition of Debt Free in 30, where we'll tell you the 6 Skills You need to be successful in business.

There is a lot of bad credit and debt advice out there. We see it on YouTube, and Twitter, and Reddit, and in personal finance blogs. And it seems that one of the most popular areas to give bad advice is on how to improve your credit score.

So, today, Scott Terrio and I are going to share and debunk the bad advice you can get on the internet for improving your credit score. Some of the bad advice we discuss:

1. Raise your credit limit
2. Have many credit cards
3. Have a 30% utilization on all of your credit cards
4. Don't pay off your credit cards early
5. Show credit growth – get a new card every few months
6. Take out longer loans
7. Start getting credit cards as a student