Debt Free in 30

There are recent interest rate increases from the Bank of Canada that will affect many Canadians. But the question of the day is: Do you know how a 1% interest increase will affect your budget?

Today's guest is here to discuss just that. Brent Hughes and his team discovered that there are two times throughout the life cycle of a mortgage that people receive professional advice: the beginning, and the end. His company Monitor my Mortgage helps give people the information they need to make the right choices between years 1 and 30.

On today's show, I discuss the news that data from Equifax was "hacked". It appears that "only" 100,000 Canadians were impacted, but even if your data was not impacted by this event, it's a good wake-up call for all of us:

So how can you protect yourself? My full comments are in my post on Equifax Data Hack: Insolvency Trustee Gives Advice on How to Protect Yourself but here's an important point: your data is already out there; you can't pull it back.

If you have ever applied for credit, you have a credit file, even if you have paid off all of your debts. That means your data is vulnerable, so it's up to you to keep an eye on your data. At a minimum, review all of your credit card, bank and loan statements regularly; don't wait until the end of the month. I check my statements online every few days. If you see a problem, report it immediately.

More advice on today's show.

For more than a decade the "go to" source for Canadian personal finance information has been the Canadian Personal Finance Blog operated by Alan Whitton, more commonly known as the Big Cajun Man (listen to the show to find out where that name came from; having met him to record this podcast, I can confirm that he is a big guy).

The Big Cajun man has accumulated the best resources on the internet on RDSPs, so next month he'll be back to do a full show just on that topic. On today's show we addressed a very common issue:

What can you do when you lose your job?

Alan worked for the biggest company in Canada, Nortel, for 20 years, and he survived many rounds of layoffs until, at age 47, he was laid off. Even though everyone knew the company was in trouble, layoffs are almost always a shock. The Big Cajun Man tells us what it was like to live through that time, with a wife and four kids, and he explains how he survived 11 months of unemployment before starting a new career.

On today's podcast he gives practical advice for surviving, and then thriving, after a layoff.

Over the years I have had hundreds of clients who financed a house, or a car that ended up being more expensive than they could afford, and that one purchase caused other debt problems. When I ask them why they made that purchase, even though in hindsight it was obviously more than they could afford, they give me many rational reasons. They tell me the mortgage payments were cheaper than rent, or they financed a new car covered by a warranty to avoid car repair costs.

Those are rational reasons, but when I ask more questions it becomes apparent that they bought the house for emotional, not rational reasons. They were afraid house prices would keep going up, so they bought now, or all of their friends were buying, so they did too.

On today's show I discuss how our emotions can cause us to make bad financial decisions, even when we don't realize we are being influenced by our emotions.

Student loan debt is a massive problem in Canada. The average student loan debt resulting from a four year degree program is over $26,000, and a student could end up paying more than $10,000 in interest before the loan is repaid.

A government guaranteed student loan is only discharged in a bankruptcy if you have ceased to be a student for over seven years at the time you file bankruptcy. So it is very sad that 15% of our clients still have student loans at the time they file with us, meaning they've been trying to pay that back for seven years already.

Even worse, the burden of student loans are disproportionately felt by women.

On today's show we discuss the problem, and propose some solutions for both society and individual students.

Welcome to the first show of Debt Free in 30 Season #4. I know this isn't a TV show, and you're not supposed to have "seasons" on a podcast, but I think seasons are a good way to organize what we do here on Debt Free in 30.

As I discuss on today's shorter-than-usual show, we will continue to have great guests discussing personal finance and debt issues. But this season I also plan to delve deeper into the debt issues that impact society.

Next week we'll discuss whether or not student loan debt is sustainable, and I'll give my thoughts on possible solutions.

We have many great shows planned, so welcome to Season #4.

The book is called Straight Talk on Your Money – The Biggest Financial Myths and Mistakes…and How to Avoid Them.

I wrote the book because based on my 30 years as a professional accountant, and after personally meeting with over 10,000 people, I believe there is not enough straight talk about money. There are lots of sales pitches, but that's not what we need.

On today's show I explain why I wrote the book, how you can get a copy, and why I think all experts are biased, and how you can make better financial decisions.

Full details at www.StraightTalkMoney.ca

For our final rebroadcast of the summer, we are rebroadcasting our most downloaded show from the past year. Sean Cooper returns to the podcast today to talk about his new book, Burn Your Mortgage, to be published on March 1, 2017. Sean worked up to 80 hours a week for many years to save for a down payment, and then he managed to pay off his mortgage in less than four years. He held a mortgage burning party that was covered by the CBC, and that's where the fun began.

Some people applauded his frugal lifestyle, but others said that it's not realistic to work that hard just to pay off a mortgage quicker, earning him a lot of online haters, which is where I got involved in the story when I was interviewed by the CBC in a follow up article. I believe that some of Sean's strategies will work for some people; the key is to listen to his ideas and apply what you are able to do, given your financial situation. As Sean Cooper says, the starting point is:

"Setting a goal, because for so many people what keeps them from being homeowners is they're not able to come up with that down payment".

On today's show Sean Cooper talks about his new book, talks about the on-line haters, and provides advice on how to "burn your mortgage".

This is a special rebroadcast of one of our most downloaded shows: it's my father-in-law, telling me how he retired at age 48, and has now been retired for longer than he worked at his job! If you are like most Canadians, you dream of a long and enjoyable retirement. Is it possible to retire early and achieve that by the age of 48? While it is an anomaly, my guest today did just that.

Bob Lassaline worked for 30 years and retired when he was 48 years old. He is 80 years old today, so he has been officially retired for longer than he was employed.

How did he do it? Full details are in the podcast.

As we continue to rebroadcast our top downloaded shows this summer, today we replay our first ever Debt Free in 30 broadcast LIVE on video, over YouTube. The response was fantastic. We asked our listeners to leave us questions through sound clips, email, twitter and Facebook in advance of the show and took questions during the show. Doug Hoyes and Ted Michalos answered as many of those questions as we could during the webcast.

We talked about debt, consumer proposals, car loans and mortgages. We even had a "celebrity" question.

The full video is also available on the Hoyes Michalos YouTube Channel.