Unconventional Wisdom

Is your mortgage tax-deductible?

The Smith Manoeuvre is an elegant strategy to invest for your retirement without using your cash flow.

You borrow against your home to invest for your retirement. It converts your mortgage over time into a tax deductible credit line.

The Smith Manoeuvre is very effective as part of your retirement plan. It typically doubles your retirement portfolio.

To do it the right way, there are three key points:

You should not take monthly income from the investments. You need to do it for the right reason. And you need to choose the right strategy.

In my latest podcast episode you'll learn:

• The 7 different Smith Manoeuvre strategies.
• Why would you choose to do the Smith Manoeuvre?
• How to deal with the risks of the Smith Manoeuvre.
• How the Forbes 400 richest Americans made their money (hint: most borrowed to invest)!

You have probably seen many articles Tax-Free Savings Account (TFSA) vs. Registered Retirement Savings Plan (RRSP). Here is the real answer specifically for you from a tax expert.

Deciding on the right one is an important part of your financial plan.

Your personal Financial Plan should include the income per year you will need after you retire to have the retirement lifestyle you want - and the amount you will need to contribute to TFSA or RRSP per year to achieve it.

In my latest podcast episode you'll learn whether to invest in a TFSA or a RRSP, and why looking at your marginal tax bracket today compared to when you withdraw after you retire, is paramount.

You'll also discover:

• The real answer for RRSP vs. TFSA specifically for you.
• Why you might be in a higher tax bracket after you retire than before.
• How the 3 clawbacks of government pensions affect your income tax bracket.
• How what you do with your refund affects RRSP vs TFSA.
• What about non-registered investments?
• How to plan for a tax-efficient, comfortable & worry-free retirement.

Dividend investing is a brain fart!

The entire concept is your brain playing tricks on you.

I know that thousands of people like dividend investing. In fact there are hundreds of blogs dedicated to it.

Dividend investing may sound like a solid and steady way to invest.

But it's a brain fart!

In my latest podcast episode you'll learn:

• Why is dividend investing a brain fart?
• Why a dividend = selling shares.
• Why a reinvested dividend = No dividend.
• Why dividends are not new money.
• Fact check: Logic errors of dividend investors.
• What is the difference between a dividend & selling shares?
• Why dividends are a payment frequency.
• How can we get out of the Brain Fart?
• How can you perfect dividend investing?
• What are self-made dividends?
• How to invest effectively for "Income".
• Why are self-made dividends a perfect fit for your life?

What's important about money to you?

Understanding how you feel about money is the first step in an effective financial plan to create the life you want.

Money impacts so many aspects of your life. How you handle it, save it, and spend it can say a lot about you.

There are some common themes in how people feel about money, and what it means to them in both their everyday life and in regards to their long-term goals.

Some people associate money with security or peace of mind, while others think about fun, happiness, self-confidence, independence or freedom.

Knowing what money can do for you, and the values you have for your life, is vital to create an effective financial plan .

In my latest podcast episode, you'll learn about the different ways people feel about money, and how emotions may dictate how you spend and save.

Discover your own roadmap to the life you want (not someone else's), and why your financial plan is really a life plan.

As we look forward to the holidays and 2024, one thing I know for sure is: "The World is Getting Better All the Time".

Every generation of young people thinks the world is getting worse, but the world is dramatically better in every important way than 100 years ago.

For example, 170,000 people are lifted out of extreme poverty every day for the last couple decades.

On average globally, humans have better technology, are richer and live better lives all the time.

I believe we should go into 2024 with the optimism that it is part of the long-term trend of "The World is Getting Better All the Time".

A few decades from now, the world will be dramatically better than today – like always.

You probably think credit card interest is pretty high.

It can be far higher than you think!

If you or your kids ever do not pay your credit card balances in full by the due date, this is the video to watch.

Credit card debt is the single most common place where Canadians get stuck, which can create havoc with your finances (and future).

In my latest podcast episode you'll learn:

• What is the small print "Gotcha" in credit card interest?
• Why credit card effective interest rates can be astronomical.
• How to eliminate credit card interest.
• Why you need an emergency plan, not an emergency fund.
• The wholesome way to think of credit cards.
• How to live within your means.
• Why budgeting is tough and how to do it.
• Why eliminating credit card interest is worthwhile.

Can You Be Confident in the Stock Market?

There are two schools of thought on this question.

1. The stock market is a decent investment, but it's a gamble that may or may not make money for you.

2. The stock market is a reliable long term investment that should be the core of your future financial planning.

Most investors are scared of suffering a major loss, so they invest conservatively for lower risk & lower returns. Are conservative investments more reliable than the stock market?

If you invested 100% in the stock market and held it long term, what are the odds that you would have strong growth over time?

In my latest podcast episode you'll learn about the historical returns of the stock market and discover how many years you'll need to invest in the stock market to be confident of a strong investment gain.

You should open up an FHSA Account this year!

This is for you if you don't own a home now or in the last four years and are age 18 - 71.

You get contribution room starting the year you open your FHSA, but if you wait until next year you lose that room.

The deadline is December 31.

An FHSA Account is the # 1 way to save for a home down payment if you buy within the next 15 years. You get a tax deduction for contributions, and withdraw tax free to buy your home and you don't have to repay it.

More reasons in this podcast.

Financial freedom. It's what we all really want. The question is: how do we get there?

One key component to achieving financial freedom is creating a retirement plan.

Building the nest egg you need doesn't happen on its own.

Most people only save enough to get 20-30% of the investments they need for the retirement lifestyle they envision.

Creating your retirement plan can be fun. It makes you wealthier. It's not about your money – it's about your life.

This article is one of the Must Read posts on my blog. It originally appeared in MoneySaver Magazine.

Listen to the podcast episode to learn:

• How investing in the stock market can close the percentage gap.
• Why it's important to educate yourself on equity investing.
• 4 key steps to creating a retirement plan.
• Why you need to define the retirement lifestyle you want.
• How to determine your "magic" retirement number.
• The easiest way to calculate how much you should invest.
• 4 options for creating a doable retirement plan.

How much do you need to be financially independent?

That is just one of the many questions posed by Kornel Szrejber of Build Wealth Canada.

He recently interviewed me for his podcast, where I go into depth about financial planning practices I use with my clients, as well as complex tax questions.

Listen to the podcast episode to learn:

• How much you need to be financially independent and retiring with the lifestyle you want, along with the process to figure this out.
• Sustainable withdrawal strategies that you can use to not run out of money when you're living off your investments.
• How to pay less tax here in Canada.
• If Ed has ever used some type of variable withdrawal strategy with his clients where the amount withdrawn every year varies depending on how the markets did that year.
• If Ed has done any sort of variable withdrawal strategies using a spending ceiling and floor for the year.
• For those that don't feel comfortable going with 100% equities, what Ed recommends.
• The process and calculations to ensure that you are withdrawing a sustainable amount from your portfolio every year.
• Why it's important to work one-on-one with a financial planner.
• How to properly set up your portfolio and manage your income when you retire.