E17 Mastering Equity Conversion Strategy with Ed Rempel

In this episode, we dive deep into an innovative financial strategy, with renowned expert Ed Rempel (CPA, CMA, CFP, Wise Guy). Unlocking its potential, Ed walks us through the foundations and mechanics of The Manoeuvre, empowering mortgage brokers to guide clients in converting non-deductible mortgage debt into tax-deductible investment debt using readvanceable mortgages. Addressing common concerns and emphasizing the importance of collaboration with other financial professionals, this episode equips brokers to effectively communicate the strategy's risks and benefits, positioning them as trusted advisors who can propel their clients towards accelerated wealth accumulation and tax optimization. 
 
For more info:
https://edrempel.com/smith-manoeuvre/

Ed's Podcast: Unconventional Wisdom Podcast with Ed Rempel
https://edrempel.com/podcasts/

Sponsors:
https://canadianmortgageapp.com/
https://newton.ca/velocity/

Transcript

this is how to be a mortgage broker or we investigate the mortgage topics you need to accelerate your business and become an expert in this Dynamic industry
 when you're a mortgage broker at there's nothing like a met late-night notification that someone's downloaded your personally branded with analytics and a mini built in the area where you can track when and who has installed your app this opportunity to follow up with people right away and sometimes it even gives me some insight on what price range they're looking at if you want to learn more a check it out on the Canadian mortgage app.com I want to take a minute to tell you about velocity it's a submission platform that I use in my everyday business and as a broker I know how important it is to provide my clients with the best possible experience not exactly why I turn to Velocity their new client experience is the most advanced mortgage application and document intake system in Canada and it's designed to make the process as easy as possible for your clients house is clean experience is built for mobile so it's just as easy to use on-the-go as it is on desktop but the best part is our intuitive document collection system based on your clients application answers the system
 predict Which documents do need to provide creating a seamless integration between the application and document collection this means more complete applications and faster approvals which is a win-win for both me and my clients since I started using velocity I seen a significant Improvement in the application process so if you're a broker looking to take your business to the next level I highly recommend giving velocity a try visit Newton. See a forward velocity to learn more I am here today I'm very excited to stay with one of my favorite people  use my accountant but above and beyond that he is dismissed maneuver is a leading expert in Canada he's the only accounted working with it is the only planner combining it with Comprehensive Financial Planning and he's the only source for all 7 Smith maneuver strategies it is recognized by Frazier Smith Smith and his book The Uber and yeah we're here today to talk all things smithman over and try to help Brokers figure out how they can implement the strategy or help
 their clients implement the strategy and everything about it so welcome at I've heard you talk about the Smith maneuver on multiple different podcast I've also read the book and you have an amazing website and blog which has multiple different great features for anyone that wants to get into this a little bit deeper today that's that admirable. Calm so yeah let's just get right into it the Smiths maneuver what are the benefits what is this Miss maneuver that you invest for your retirement rule for long-term without using your cash flow by using your home equity
 it's basically what it is so and it's over time it converts your mortgage into a tax-deductible credit line is really for people who already have so much equity in their home like at least 80% equity in their home to get started you'll have to get a real Advance with mortgage to do that you have to have at least 20% down so you got and then you could borrow up to 80% and you could do Smith Bluebird from then on down so if it's to the service people set themselves up you set up a client with their we advance will mortgage so let's assume that they've already got some space in there so there they actually do have 50% equity in the house if they've already got some room to start investing with that Helix so how do they do it with the process that you have available
 30% of available now you can borrow that to invest now and then every mortgage payment you make your pain down the mortgage a little bit with a credit line every vessel mortgage music in a bit more credit available and you can use that extra credit both to pay the interest I want you borrowed so far and to invest in or you basically you're investing money that's not using your cash and fixing today is your cost of living is gone up so much of people we've been a lot of people very tight on cash flow but this is the way this is entirely in addition to what you're doing with our species and tfsas and other saving its doesn't take any of your cash flow and you know so the general benefit if you start with 20% likely you're home and you do it over 25 years you know when you invest in equity is 88% long-term her to return your expected rate of return over 25 years is basically the value of your home today so that's your net profit you may have forgot your home and he made a net profit equal to the value of the oven
 top of that which helps a lot and we want to retire and the whole while you're not even using your own money to invest into your own retirement you're using right yes you're using the bank's money to invest then using the bank's money to pay the interest when you get a tax refund would you can keep or you can put it on the smarter thing to do is so obviously the benefits are you know we're not using our own money so we're leveraging what we already have to our advantage what other sort of benefits are there early retirement paying off the mortgage faster
 yes we are also it also gives you tax refunds assuming you invest tax efficiently so and yeah you should be able to pay it off your mortgage off more quickly if you put all the refunds again you don't take a 25 mortgage and you just put the tax refunds from the Smith maneuver on to your mortgage and then re borrow it and write for the credit line to invest if you do that over 25 years it takes 3 years off your mortgage okay so would this be something that somebody should get into if they're thinking in the short-term like if they're wanting to put some money away and then they get nervous about interest rates and that kind of person that's the wrong kind of person for the smooth mover to invest and so for this to work and used to buy Investments that overtime should have a higher after tax return than your interest on the that you're boring at all so you know if you're paying 5% interest in you in a 40% tax
 Yeti purses costing you three right now so you were best friends over the long-term need to make more than 3% a year after tax which is not hard but so does it really make sense to invest in Yentl bonds or gics because the person they're all fully taxable right and then probably lower interest rate that when your mortgage is so that's a loss right so so you should invest generally in a hundred percent in equities are you the stock market goes up and down quite a bit short term and even medium-term but if you're in the long-term then it's very reliable a short-term you're probably going to be ahead but not for sure because you know I don't know that the stock market's going to be up one or two years from now I do know that it's going to be way up 25 years from now twenty-five years from now the market will be between 7:00 and 17 times higher than today in is because
 I've heard people say something about the Smith maneuver that indicated to me that they really just did is in the short run and so I wasn't surprised that it didn't work out for them babe somebody's had said that to me oh yeah by the Smiths maneuver and it wasn't for them and I thought well that means they must have just started it and then pulled out of it so yeah of course it's not going to work but exactly is the biggest risk the biggest risk is the board to invest it goes down and you panic and sell now you've lost money so if you're the kind of person that might panic and sell when your investment goes down then don't do it if you're going to be kind of person that will just do it and stop looking at the statements to come in every month and just seems that you know it 10 years from now 20 years from now this really isn't going to matter so we'll just let it run its course and also have an investment that so it would see the investment Falls by Thirty or forty percent it should be investment that you are still confident did even when it's down
 right cuz that's exactly the most boring to get add more when it's when it's down but if the investment you have it stays that you would still just as good a quality but you panic because it down 30% then maybe maybe it's the wrong address but maybe just have confidence in the right yeah I totally agree if I had to explain that to people before around like when the price goes down you still on the same number of shares they just are worth less they will they will be worth more eventually hopefully if it's a good one in the stock market over time grow their profits it so the reason the market has gone up so much over the last hundred years is because the profits of those companies are going up the same amount so overtime profits go up that's why you know this short-term reason that goes up and down but over time it goes up it goes up reliably so but that's the kind you need to go to be that kind of person that you just say I'm going to do that so using recommend if you can do Smith Middleburg commit to doing for a minimum of 20 years okay that's a good suggestion you almost deaf
 Emily will be way up and is this the rest of the risk is much lower long-term and short-terms of the tax rules of this country any risk there as long as you follow along as you follow the rules right the risk is really all about the investment risk and you know your own risk of panicking those are you have a good investment obviously that's going to make money over time another thing I wanted to touch on because I think this is an important part of it at least on the accounting sides and since you're the accounting expert is if you are using your HELOC to invest can you be also using it to buy you no car or making other purchases on your tax return you need to show the amount of interest in the more money you borrow to invest is tax-deductible however if you got a lot of other stuff in the same credit line then how are you ever going to show it if so
 Rihanna see you then how are you going to show that this is the amount that this was for I board for the best but the other part of the same account was not so then it's not really productive also it's so the the wise advice is always have separate credit line for investing and if you want to use one for other purchases use an unsecured credit line or the phone number of the advanced will mortgages allow you to more than one credit line so I split one off do a separate one for anyting is not that I can pull in one foot in this to ductable that way if Siri was so we've had to fight Sophia for our clients that do it through us we offer to do their personal tax returns and then so we want to make sure the Smith movers Dunrite sand Dr the right person out of a couple and all that and then we set it up for the CMA will contact us if they have a question and then we know how to answer it I get ascendant about a 60-page faxed to see you
 they ask and use it real quick because doing it so usually every year they got you know two or three or four they asked us for the the back up on it and it's a pain but it's the only way we know for a fact it's going to be fine we have the information right that's I can track the interest you have be able to track that the money board went to Investments is still invested this is the right amount of the interests and that it's all fine you have you ever experienced one we're talking about the risks with any of your past clients for example where the risks were too much and they they got out and they they wound up losing money or like what can the side effect be like let's go with worst case scenario just so that people are aware of what could possibly happen Rancho crisis that panicked and sold at actually unfortunate just started its you know so it's the people that are in for the longer-term you know even if it dips are probably still popping where they started
 you know but do we have 14 address when we have clients working with it we talked to him a lot about the Redskin like so what are you going to do I always say when when your Investments are down 30% what are you going to do right you invest $500,000 down to 350 okay what are you guys let's talk about it ahead of time and you owe 500 still on your this is the worst case scenario what are you going to do and if the answer isn't stick with it then we should talk about but maybe this is the wrong strategy because I have a good experience the big guy from Evan up risk tolerance or this might not work you know and so in terms of like interest rates going up and things like that that doesn't impact as much because the interest that you pay is tax deductible over the long-term Investments need to make more after tax than the interest rate Sophia Grace went to high then it's harder to do well at it
 Google really really high before that's an issue I was going to ask you how high like a bunch of our clients going to get really big tax refunds this year is paid a lot more interested off without using a lot more in the early 90s there's a guy named what was the name Talbot Stevens wrote a book about called conservative Leverage is but a small amounts of Leverage it's what he said me the book ahead of time to review what he wanted that quote if you people are so I reviewed ahead of time and all the examples in that book you're boring to invest at 9% all the examples that I used and he was able to show that the general rule of thumb if you're investing tax efficiently is to break even you need to make 2/3 of the interest rate it's because the Investments are all capital gains with your tax
 and you can defer it and pay the tax way down the road so if you pay 9% interest on your loan and your investment make 6% over the long-term then after tax over the long-term your buddy but that the stock market is still quite reliably made you know between 8 and 12 per cent a year long-term so the worst 25-year calendar game of the S&P 500 the last eighty years like the bottom stock market is 8% a year okay so over 25 years or twenty years and you P9 on your on your loan used to Lexi ahead over time so the people ever eventually pay off the HELOC portion or how does that work thing is going to be able to do it when they're when they're buying their home and they do overtime while they're saving for retirement but then this two times when you stop and think about what do I do with it after that so when is what you do
 the mortgage is paid off the other one is what do you do when you retire so let's say that now you do it you're retired and your mortgage is paid off so now you got this huge credit line it's all tax deductible so what are you do so there's basically three options what option is you can just sell a bunch of Investments pay it off and then go into retirement with you know with your profit and child with no with no mortgage the second way that's the one that gives you the most couple retirement is you just keep that credit line forever text via ways to get a mortgage interest rate on it but I just keep it fully Advance all the time keep it for as long as you own your home so you made it home your home until you're 85 or 90 you something and you keep it and it's paid off by selling the whole whenever you sell the whole mess I was paid off so if you do that then you invest
 are there in a only to provide you with retirement income and you know if you retire you a 60s and you do you do you sell your home at 90 you put an extra 30 or 25 30 years of investment growth but because we do these Financial plans we see the effect that actually makes a huge difference in your retirement lifestyle do you have people that are consistently refinancing to take a lot more Equity or 35 that they usually try to keep it at a stay for amounts like for example with my house here let's say we did to the the global limit as 500,000 even though the house is first 800 but 10 years from now the house is worth one-point-five million but we're comfortable with our investments and we're on track what do you still recommend like at what level do you say you know what maybe not worth the risk or how do you make that the levels bit of a comfort level it depends on what you know what to do it's funny thing is cuz if you look at the
 there's no mathematical way to calculate that does the math is always going to say the more you do the better you feel uncomfortable or something I don't know but yeah so we tried to get a fair number of clients that are actually very growth-oriented the real reason how do I increase my net worth and you know how often are we good people going to fire Community to retire really early and so they're trying to build up their net worth and so this is a great way to do that so Cal but we got clients in Toronto and in Vancouver and you know so often there like every year or two they re appraiser home get it increase right next to money to invest and some every time it comes do or even something to take a longer-term they'll even reappraise admit of the term increase the credit line up and invest it so we've done what we've done a lot of a lot of 25,000 from last year it's not worth the pain
 it's going to be some cost to get a new mortgage in your house and probably go up and got to go by 50,000 and value or something to do with it sometimes of a mortgage is it wouldn't charge you for a basement ready for appraisal of if a credit line increases fifty thousand or more or something like it's if it's too small then you're not going to get any or not in a position to negotiate lower fees oh yeah I know that's fair so when were like as Brokers we have clients that seemed to fit well with this type of strategy so they have a lot of they already have equity in their home they have good cash flow how would we introduce this to them and how can we help them throughout this process other than obviously setting them up in the proper mortgage first and the strategy the article that I have on my blog is I think the best summary of you can read of it anywhere so if you don't understand what the strategy is and then
 will you with clients you should try to ask them questions and try to figure that gives us a pretty good client for this or not this is not for everybody it's cuz you're boring to invest right so it's not for everybody if you find the right people that you want to be able to clearly explain this is what the strategy is this is how it can help you right and then kind of put them in that direction so that they can make that decision for the word for themselves but at least like to provide the information I think it's the service that we should be providing for clients because a lot of people don't know that this is a strategy That Dope there and it could work really well for some people so a lot of people just don't know about it so or what it is or if it's so he could help them get in the educated on it yeah and you can have the advantage but to be somebody that knows about it because I just talked to somebody yesterday who wasn't a client but is now a client because she was asking me about the Smith maneuver and we started talking about it and she said you know I went into my bank and she looked at me like I was crazy like it was illegal what I was talking
 she had no idea and there was no interest in like you know what I'm not sure about that I'm going to go look into it nothing so you know you can have to Savannah just knowing about this kind of thing and knowing you know where to direct people and again like this is all about sort of educated and the client on the options that they have available to them so they can make those those decisions for yourself themselves you know we're not deciding for them yes you're going to do the Smith maneuver I'm going to set you up in this mortgage and Away you go it's just all about kind of talking about it and seeing if that's something they might be interested in so how does it work like just the basics of it did we go through that already where you know you say you have it set up or they look like you had me like I had two heads and said that's risky and said I know what this is a solid it's a real strategy and lots and lots of people doing it so I think for a mortgage broker it's actually a very competitive advantage
 if you know about it and no one to raise it and then you can help them get started on it you have this you know if I can make your mortgage tax deductible can the other guy make it work a text that I can write so it's a big thing I've been near the first step in implementing it is to get the right. As for work and you're the one that's the first thing you can't do it that's true if yes so for us we have accessed obviously multiple lenders who will do he logs but the best ones and Ed will get into why they're the best ones for it but TD and Scotia probably would be the top ones for it but having said that the we also have mcap CMLS Desjardin First National Manulife home trusting in the list goes on of the lender said we have access to for he walks so yeah it's great because we have more options than if it was to just walk into the bank we might be able to get them a better interest
 great on the HELOC portion maybe same thing on the fixed and just give them some flexibility when they go to do their refinances switching them from one to another for example like there's lots of different options that we can do for them so why are some of them better than others for the strategy of them will give you up to 80% of the value were home so that's a big thing on you like 1 2 3 is the worst Choice going to give you 65% that you can read a vents right so that the one bank that to me is that automatically makes them kind of kind of the worst and they have a monthly fee hardly any of them do but a couple of hours I have a monthly fee like 1695 a month or something like that just one thing if that's your main checking account than this move some logic to it but if you just using him as a mortgage in credit line why am I paying 17 bucks
 a month for a credit line will be all star just asked also some of them allow multiple mortgages and multiple credit Lines within the overall reinvent suppose he could for 80% of the limit of your home and then of the value of your home and then you can have multiple mortgages and credit lines and it was awesome good reasons to do that so you want you want to be able to split it up so what exactly what you said before he went to use the credit line for something as non-deductible where we took them find it useful is what sometimes after while what happens is you paid on your mortgage why you credit line is getting pretty big it was a credit line is always higher than the mortgage rate who do is take the taxable credit line make it a mortgage is still tax deductible because that's okay with you getting a mortgage rate on it but now you have that as soon as he wanted really like I mean once you get up 200,000 you could you could walk
 you may have one we may have to credit line so they do the repairs so yeah it's a bit more complicated to do all the capitalizing of Interest which we can explain yet but that works for the time that happens is so you know the most of the banks will give you up to 80% of value but only $0.65 on the credit line that's where that becomes a problem is I start with 80% of 80% mortgage in no kind of Life do overtime my mortgage is going down my credit line is going up at one point at work it down to 15%. 80 off by credit line is up to 65%. The maximum that I can do right now you need to take that 65 or most of it are part of another mortgage now you can keep it at 80% over all right you run into issues
 and you come up with some of the damages where you could get the credit line rate you'll get the mortgage rates of the cut line race definitely some advantages to thinking about that so far in advance because we always run into this in on some point most people when they get you know to the age of retirement they're not in the best situation to be refinancing because they might not qualify for the same amount as they would have before so it's good to be in the right products so that they can just continue to renew at that point right now get down to 15%. Start with the place that where you can do it to me answer this why some of them are better than others I mean it almost has most of them basically work you have to make sure it's not just a credit line cuz some banks do yet so he like it it's a read Vance what kind of line but it's just a credit line right it needs to be linked with a mortgage so that you automatically game credit as you pay the mortgage it down that's the key feature
 they have to be linked kind of question about this Lakeside question and it's about the HELOC and keeping it and can you get insurance on the HELOC or is it just your general life insurance policy that you would just make sure it cover that amount when you passed away yeah like to see my train of thought where I'm going with it like if your choice was it you wanted to live out what I'm going to say it instead of going to live with this credit your whole life yes when you do pass away what can you do to protect your loved ones I guess like that more than a credit line especially years from now so the whole pay it off so it's not going to be remaining there the banks will you do mortgage life insurance but generally more get the bank is the worst place to get that it's better to get it your own private one that's a lot of people think the amount of life insurance I need is the amount of debt that I have but it's not what you need is
 you need enough so that the people who are dependent on you financially can go on living the same lifestyle and have the same retirement that's how much you need right so it's more it's more on how much income you have them how much debt do you have okay that makes sense but if you want to worried about you can get a life insurance policy just get a term life insurance policy for the amount that you owe for 80% value of the home so bad that it's paid just in case let's say it like yeah so that Darryl doesn't have to sell the house people that are always from retirement the amount of insurance they actually need is quite a bit more than their mortgage because they'd replace most or all of their income for the rest of their career when you get close to retiring retired you may not need any life insurance even if you still have this big packs of simple kind of life because you and your spouse have enough money to live on forever so you don't even if pass away your spouse is going to be fine and the house will pay off a credit line so you don't actually need the insurance for any reason
 actually kind of brings me to the next part of the question which is kind of getting into the cash flow part of it because when you're getting into retirement and you have this huge HELOC Fortune let's say let's say you haven't converted it yet and it's still just sitting there at prime plus something and you're making the interest-only payments month after month so how do you avoid the dipping into your own cash flow especially in retirement does dollars are so precious with the start-off big before you were tired of this or this process called capitalizing your interests okay so while you're paying on your mortgage is starting to build up a credit line every month of course the bank will charge you interest on the credit line but what you can do is because every month he gained a bit more credit available you take that that credit available and you use that to pay the interest no almost no bank will do it automatically so they want to take the credit line interest out of a checking account so then basically go to the credit line and like they take a hundred bucks out of your ear
 trust that your checking account you go and take the exact amount back right so you think it for the credit line put the exactly same Outback in your checking account so it hasn't affected your checking essentially the credit line is paid its own interests so you're taking money out of your credit line they going to want to take it out of a checking account somewhere so you have to move the money from a HELOC portion into the checking account first before the money comes out will you can also do it afterwards you know what people do it right afterwards it waiting to see the exact amount and then just put the money back in because you're trying to do the exact amount if it's in your main checking to see if you take more money out of the cradle and just put it in your personal checking then part of your credit line isn't deductible the tax rule is that if interest on a loan is tax deductible then the interest on the interest is also tax-deductible so you paid the interest you take the money out of a credit line
 put the exact amount back in your checking account so now it's its own interests and affect your cash flow so that's all capitalized in the interest that easier way to do it is you have a separate checking account is only for Smith River that's what we have set up iFit Darrell does all of this part of it but the credit line the Smith repair line you tell the bank to take it out of the separate checking and then all you do is transfer enough for the credit line into that checking to make sure that nothing balances that all the payments goes yeah I think the way that we do it as we put some extra money in there in the beginning so he doesn't have to go back and do it every month if you type in you have to monitor them out you'll put it in a separate checking you have the interest get paid out of there and the rest of it you can invest every month so
 hi sweets with maneuver they put in a lump sum but then they're also putting in money every month anyone respite to see you again none of it comes from their cash flow then you were asking about retirement then so retirement so now it's even doing this capitalizing and your overtime your mortgage is now paid off you got a credit line up the wallet say it's a mortgage to pay later still up to 80% of the value of your home right so that the best thing you can do that if you want to keep it is you put the whole thing into a new mortgage 80% of the value and you pay it off with the lowest payment it was a set of 25 or 30 year amortization a low payment now again you better principal so you can still capitalized all the interest so it is not coming out of your cash flow and it so it basically you just keeping your credit line at 80% all the way through your retirement and now you got all your Investments so you would you can now live on so once you start taking money out of the Investments then trying to keep the credit line fully taxed
 edible can be a bit of an issue because if you borrow to invest Cynthia concept keyboard to invest you buy your vestments but then you just cash in some Investments and spend it well then that amount of your loan is no longer that I can bowl and what's more is you have to track it right you have to track it so if you put on your tax returns at my credit loans tax deductible and then they audit you ask for proof of it and you can't know that I spent some of the money they don't the calculation for you based on what we do as you say OK will deny all the interest it's up to you to prove what amount is they're talking about so okay you got to be able to track that so we have been with complex spreadsheet but we tracked this now if you might have money that you can take me out just pays the interest that's fine it's all still deductible and also if the money to take me out is taxable like a traitor is that a capital gain that's tax move it or Traders pays dividends taxable then you can take money out so you can have all the taxable amount to come
 okay and it stays fully deductible and you can take enough to pay the interest out so yeah I don't know I think we might get into this more the strategies actually pray that we're going to get into it actually I was going to say about like if I were to make some extra money and I have an extra $10,000 but they do I take that ten thousand Mastador do I first pre pay my mortgage make that $10,000 available on the real Advanced Apple portion and then from there take the $10,000 fast
 yes so if you do it that second way to go both ways you have your $10,000 invested at both ways you won't 10005 the second way ten thousand of your dad is tax deductible so you've converted it to Universal General we find so you know a lot of people look at us so I have some money to save for retirement should I put it in our sprt of a safe now if you'd been over three choices do RSV or two of us a or should I pay it on my mortgage and reborn to invest 30k say I pay off my mortgage for the you know you'll give me Investments it's almost always the worst Choice really fast really paying off the mortgage quickly so but now he's all three cases if you paid on your mortgage Andre Boral it all three cases you buy Investments it could be exact in the same investment so the only difference is the tax on it right which one so RSP depends on your tax bracket today vs what it's going to be
 Huber tire so that's and most people are going to retire in a lower tax brackets in today so Krispy is often the best choice and can see if I say there's no tax but if you do it effectively there is some tax savings because you convert part of the mortgage to a credit line the interest is tax-deductible you're buying Investments that are tax prefer to overall there's some tax savings do most of the time RSP number one Smith remember to give us a number 3 every situation is different you have some kind of income tax brackets all these different things so it took a full but that's the most common scenario so but yeah but doing it right we've had people that have we had a cheese a poor people had $100,000 mortgage and they actually had a hundred thousand non-registered best man at the same bank as a y
 Banks just a zyxel investment pay off the mortgage brought right back by the investment right back now the whole thing's tax deductibles you just converted all tax-deductible you do you get a big tax deduction and if you still have the same organ in the same question yeah Investments so it's only a plus like why would you do that
 I've recently added the Canadian mortgage add calculator to my website and I can't tell you how much I love these my website visits have tripled since having his calculators because now there's an engaging and interactive right there in a consumers who want to be in control of their process and budget and it's a great way to retain clients and boost my Osseo ice finally have a great landing page for the term mortgage Twitter search terms in the mortgage industry to find out more check out the Canadian mortgage app.com do you want to go through some of the Smith maneuver strategies or what do you think you want to do it legal to that part of people that have question is is illegal so I'm actually read the article where someone is saying is not legal as a meteorologist wrong they don't know it's in the tax money to invest normally that money is tax deductible you know same like every business out
 they're borrows money and the interest is tax-deductible for them so and its people say well maybe the government's going to change their mind on all businesses to invest in their business right they're not going to make it non-deductible they're trying to promote investment. You do have to be able to track it and prove that the money you borrowed as I was looking at all the current use of the money so I bought my son to invest the money is still invested I didn't cash it in right and I've kept it separate I haven't mixed it up with other money and so that was obviously tax-deductible it makes sense so there's seven Smith Madeira strategies let's talk about the first one Plain Jane Smith maneuver about all that all you do is going to get 20% down in your mortgage or whatever you just out with the mortgage and you just sleeping it down and rebuild from that amount it would start with any of them some so basically all it is it just you start with 0
 investing every month based on the extra credits your first month's you paid 50 bucks a principal on your mortgage free Bid $1,000 payment to big five hundred percent of the principal he got five hundred bucks available too could find you and Beth five hundred bucks a month and Away you go so fast it is easy when it's actually the lowest risk one but also the lowest benefit because it's thinking like in the first two years we have that much invested yes right so it takes a while for it to build a small but that still got one the plane Jaymes still gives you the expected benefits over 25 years is the value of your home today it's better than nothing if you don't have a huge lump sum to get started with it's the next best thing of all you have is 20% down on your house and you can use all of it for the mortgage that's probably best you could do so that's the basic strategy so the Singleton Shuffle Russ what we just talked about were Singleton has made it was a court case about a guy named single thing with actually see her a question did and the people want
 who were the cast in they paid off a load of bored right back to buy the eczema that's been by and see her instead you just did this to save tax
 yes I did but I borrowed to invest its back tonight all right so that's where you already have Investments you sell them and buy them back. This strategy will be that you just I got a big bonus and okay I'll just go to pay them in when I get to reboard to the same kind of strategy yes so that you got more available so that you can use it to invest rather than just directly he's in the money for it. Please don't let this is the last school name but it's the top up actually there wasn't a strategy to the top up is where you start off with extra credit so you start off you so you put 50% down on your home right you'll get credit up to 80% so you can take the 30% invested see start with a lump-sum so it's a plain Jane except starting with a lump sum
 it isn't it strategy would just call the triple top I basically you can take that amount pledge it for a three-for-one investment loan and now you starting with a big lump sum and otherwise it's you go along the same way but The Compound Effect right it's the earlier you can get the largest amount is always going to be the best strategy if you're the term then the biggest benefit is you know how quickly can you get a significant amount invested so that's what top up those for you making me feel like I Want To America that Miracle is actually really interesting so we had best what is it to show an example cuz we're and a couple that had they had a whole bunch of different debts and they were struggling so they were trying to save for retirement but they had no money left over and we look at it we had our SB loan and a car loan and a credit line and a couple credit cards and they were and their mortgage and they're all these payments to me right
 what we did is we went out and got one new mortgage took all of their debt put all of it into a new mortgage call a debt consolidation to refinance right consolidation means you are desperate and need to pay higher interest rates but to refine it like they do it right so they are now they only have one debt it's the mortgage that's also the lowest interest rate that right then we took the the payments that they were making on all their debts and we made that their mortgage payment now this mortgage is actually was getting paid off and I do it was ten or fifteen years it was quite fast I was getting paid off and now with that because you're paying it down fast is a big Smith soda starts you know they weren't paying all this High interest and they feeling overwhelmed they can't save anything right and then we just did this refinancing start Smith mover and now they're actually saving
 2000 month for the retirement retirement if they said if there's a miracle this is it is a miracle miracle at how the all of a sudden life is good you know they were unable to put any money away and then all of a sudden everything looks really good so that's a good mortgage broker strategy right it's worth while talking to people I can just get him a mortgage it's like let's take a look at all the things that you yes absolutely we always look at that I like the potential of the refinance would you the refinance analyzer all the time the Canadian Market job they have a great way of running the report you just plug in the clients liabilities the interest rate that remaining term and what their current mortgage in their current payment is and then you plug in how much it would be
 rap battle in yet paid all off and and then you can see how much you can improve on interest savings over time how long it takes you to break even all of this stuff it's all just simply done has been the mortgage is basically always has the lowest interest rate you can get it lowers you can get the car loan something at 0% interest that's thrown into the price of the car right I love it when people say that will fit my car is 0% interest okay will your payment's $500 a month but from a financial planning point of view is people I look at it's costing me nothing interest nobody went basically they sucked you into spending more on your car but he said the payment is high it is hard to save anything while you have pay $800 a month on my car loan payments while you know what that was it if you put the stick in your mortgage you've just saved you know $500 payment is way lower right
 wheeler is so you can use that 500 to invest immediately but yeah I just had that same scenario happened but I mean everybody has their own right way if you're close to paying off I don't know I don't know what you think about this but I find especially when you get close to the end of alone it's good to just pay it off because you're making those huge payment still even though you only have like what's their monthly payments $500 a month but you only owe $8,000 still on this thing so why wouldn't you just get rid of it free up that payment
 I mean it anytime it makes sense but especially near the end I find I don't know it's under 5,000 bucks but you're still paying 500 a month on it bucks a month right so what if kinds of lots of debts what I do is I calculate how much debt am I financing with each payment so take the Denver Light Up by the payment and see how much data my finance that give me look at the ones where you hardly need to feel like it when we have ties with lots of dads so and they're overwhelmed how do you pay it off either you take you get rid of the ones where the payment is financing the least amount of that or you do them by the highest interest rate first and all and it depends on the situation and how desperate they are the two free of cash flow versus so if you look at the two and sometimes one is better sometimes the other is better but yeah like I agree with you generally wants to loan a small just get rid of it
 people make the choices that they make it's mine but some of the Smiths maneuver with a dividends there's the ones that like dividends and the ones I like in deck so I don't people like dividend investing so when they do Smith maneuver what they want to do is they want to borrow the money and buy dividend stocks so that is why the stock so they by any chance you have a mutual fund that pays a dividend investment and see the thing about it is if you're getting the dividend is all taxable you can use that dividend to increase your mortgage payment to pay your mortgage off more quickly and then reborn again to to buy more of it down on it w down a few more of the job more quickly problem with it is that you have to pay tax on that different if you just let your investment grow there's no tax on the gross because it's until you trigger sometimes right so but now you have to pay tax on the dividend so I've actually modeled it's okay what let's look over 25 years
 which one are you had anything like being the work out more quickly so I'ma head right but when I'm done the math on it you actually farther behind their what I found is you have to make about 1% higher rate of return so if you had a growth investment making eight you have to have a dividend paying a 9% dividend be in the same place for naturally over time because of it I caught a tax and bleed like every year you can pay me some extra tax tax refund from the smaller all the time. You so it's less effective like some people just like the best thing and they're more worried about paying off the mortgage more quickly so but it might be a better strategy just to use those dividends to invest rather than putting it back into the mortgage first what you're saying even other Investments even if you have Investments are focused on growth I forgot we do use what we call All Star fund manager Pro for trying to find these rules bathroom
 so we're buying actively managed ETFs or mutual funds but you get a taxable they call it a different but really it's a distribution of the end of the year and it's moving its really usually almost entirely against because inside the fund if I'm a group. So something you can take that dividend distribution you could pay it on your mortgage then rebore to invest it's a bunch of friends actually it's all I do is question is is is it worth all your effort to do all that stuff right in the beginning cuz I know like our dividends her you know yes you get a $100 dividend investment
 too much work as I got this extra hundred bucks in my pocket and then by doing that I made $100 tax deductible writing interest on $100 is 5:00 so I got 25 more tax deduction and I just spent an hour it's okay so it's not worth it but if it was a good day but it was a big deal about tax deductible from been on you know forever so it's but yeah it's not worth it for small amount it's too much like work okay so what about the Smiths Snyder yeah so this is Mitch Snyder is actually named after a guy whose last name was Lloyd Snyder who developed this years ago and actually you know what if you go back to work to those whose 5678 there was a bunch of mortgage brokers that were marketing Smith move it wasn't actually Smith maneuver it was a smith-snider and what they say they see what they did is every client that came to them they would do Revenge
 mortgage plus they would go and get a $150,000 investment loan if all of it into a mutual funds that paid a large the cold th funds or their funds will pay you 80% of the balance of whatever your best man is but then almost all of it is not taxable is called return of capital so it's one of the ways you can get the investment you get cash flow out of our mutual friend sends you money every month but basically it's the principle of the your actual investment is not gross for the year it's just going to send you a percent even though in most cases the taxable amount is way less than that's the most of it is just getting her own money back so that was the problem so they were taking the holy percent and increase their mortgage payment by that amount and is it look how fast I'm paying the mortgage down by said but wait a minute you building up a credit line that's not deductibles so
 overall you not ahead by doing this right it's reduced my mortgage by ten thousand but now ten thousand of my credit line is not deductible and it's mixed with the best of his deductible I made a mess so that's about it he was a problem and you lose a lot of them blew up after 2008 when the market went down and the problem is because you're taking so much money out of their Investments they didn't come out right I said trouble recovering after the funeral for a client they went down in 2008 but did not take any money out sort it came back in a couple years you know so now we're smith-snider is useful is after you retire okay so you've retired you got this big credit line and now you with these Investments you want to start taking money out so when you do it so some people do I was by dividend stocks why you could do that but it's all factual so the most tax-efficient way to do it is we go to self made dividend basically you just automatically sell some of your investment each month so you got five Thousand Oaks
 so where's the name of the 4% rule which if you have which makes sense if you're almost all inequities but not if you have a balanced portfolio but I have five thousand so 4% of that is 20000 year to divide that by 12 and an automatic you send myself that amount of money okay or I can buy a T8 fund that pays out or I don't know but half the money in the th friends and paying 4% of my investments out by the way that somebody that are coming to me every month so that's funny my retirement but then do you lose some tax deductibility on it and that's kind of depends how the numbers workout yeah and so this would be one that you would generally do or welda Smith cider with the th fun we rarely do that does the auto drains were make sense but very rare so you see we do this off my difference where we just automatic eat dinner with the mutual fund you can automatically just do it so the systematic withdrawal paying you to celebrate each month so or you can get your portfolio manager
 TTFN Tata Matthew sell something each month and then you get your regular income back way and then you got to track of the end of the month at the end of the year was my mortgage still 100% deductible or she got a little bit of that most people when they were tired this is the process that is kind of what you do it's not really very useful before you retire that's what I was just thinking it sounds like it's more when you're needed to start drawing from some of this one you want to take that your lifestyle out of there yes are you some money okay I got all this with manure it's funny cuz people think about one of the reasons people sometimes I'm scared to just move through cuz what if I lose my job. Do you know what if you lose your job your she better off because now you've Investments that you can draw yeah. That makes sense actually better off cuz you got something you can fall back on then if the music I can mess up the plan and mess up your tournament a bit but you know you have some money there
 which is probably why you always recommend people hat leave a little bit of room or have like an emergency savings fund what's your stance on that are you more of the user HELOC for emergency type situation or do you like it when people have actual savings set aside alone losing you don't really need an emergency fund you need an emergency plan what do you have unexpected expense come up that you don't have time to save up for eating a source of money so in general cuz I've model I guess I might guy who models everything when you look at the strategy having money sitting around in a checking account or savings account is the least effective method cuz you have that all invested a the truth is most people have very few cash flow emergencies so the whole thing is just leave the money invested but then have access to money in a credit line somewhere so you don't want to use your Smith maneuver
 you lock yourself out of line for that cuz you don't want to mix non-deductible deductible then you just created to solve a problem so you would have a separate ones you had to split off a section separate section that's going to be for emergencies or what we most commonly do is just arrange a non-secure credit line of the bank and get a $50,000 credit line unsecured be traceable higher but if you really use it it doesn't matter that much and you see it's you might never ever use it but it's still kind of a nice piece of Mind thing and all you're putting a drawer and sometimes he hasn't actually make sure you do a transaction what's a year or two or the bank will just go dormant will take out the clothes it should probably still there so they don't close it so that's your Source when you have a disease and see if you are part of your HELOC let's money that you could have otherwise asbestos
 it better off to invest all of that use an unsecured cuz being Republican not going to bring him any cash flow a disease that's usually the most effective way to do it so the last the best like to be Save The Best For Last the ruffle maximum rep or maximum as you can guess I need it myself it's just a coincidence you got my dick has famous rental
 yeah so busy because I'm a math guy I just looked at okay so we get these clients are coming over just like a number of clients that every time we meet with them and using these guys are these people to call us up regularly right so it was like so what are we doing what else can we do to grow well faster what else goes with everything you can think of right three months later he's back what else could you do like I just used up all my ideas three months ago I want me to come up with another one I did all the things I could think of right so the rebel Maxima was so if I'm doing the Smith maneuver what's the maximum benefit that I can get without strategy without using more of my cash flow so any idea there is instead of investing monthly like you're as you're paying your mortgage down to him credit you're investing every month so what we're going to do is we're going to take that month were investing every month we're going to go out and get an investment
 where that's the payment so let's say if you're paying five hundred bucks a month on your mortgage so I can get 500 bucks credit line so I could just plain Jane is I'm investing 500 bucks every month but you say five hundred bucks a month but see so that would cover the interest unless a 150,000 investment law so I get a 150,000 investment loan interest only I use this $5 bucks to pay attacked I could win some banks will actually let you use a void check from the credit line and you give it to the one that be nice so that you don't even see it then if you want to do that when does a couple banks that will do that example what you do that run that an investment directly or give a boy checking equivalent to an automatic withdrawal from there from the big five banks we asked all five of them and all five of them were wrong so two of them will do it
 and they both said they wouldn't and three of them won't do it and they all said it would work and the only way to find out is is we tried it and it pauses so it doesn't work but you know it works at TD so good to know that's all we need to know or be most of its user those and then it will happen if I put in 500 bucks a month or I start with 150,000 like it doesn't you know obviously in 25 years you're going to be quite a bit farther ahead by doing that. I say yeah you got to think through what if interest rates go up a little bit and how do I make sure that I can make this payment and stuff that's the best wealth growing strategy out of the Smith maneuver
 yeah you touched on this the very beginning but it's worth talking about again and that's just how hard it is in our daily lives to take that extra $500 out of our already diminished cash flow because of inflation and cost of cauliflower and God knows what else it's tough out there and it's just nice to know that there are possibilities for you you don't have to be kind of stuck doing your the bare minimum and like starting earlier is always going to be better than waiting until you're ready or until this or so you get the raisins all this other things because yeah we you put this off and every year you put it off it's costing you get off there's 60 they say I think I need to start saving for retirement What can you do well in 5 years you can't do a lot what do you do in that situation
 what slope will know if you're 65 years you got to do something big otherwise you're going to retire with almost nothing right so that's kind of how I feel about it to like not that I'm a spring chicken but young enough that if something bad happens we have time to recover from it so it's better I would rather be riskier now because I won't have the opportunity to be as risky in my late fifties or sixties for example if you start when you're younger like you start with you by your first house you know they were right and useful are you doing it for 30 years before you retire and then another 30 or 40 years after you retire and an average first-time home buyers 3434 Gees and probably you know how old I was when I bought my first house
 these windows rates were 20% and so because houses were so much cheaper then it was more affordable with super high rates them than it is today but how I feel for young people today supposed to hear intraoral it all people get but I think they get out of University they got their first job to make it a decent paycheck right and they look tomorrow I want to buy a condo here and walk a condo is at 800000 so you should come up with 160,000 down and then you have to qualify for a $650,000 mortgage and this is why can't I can't see you no chance to do this right I feel for them to do it and it's it is expensive but you know once you get your mortgage think a lot of them to buy a place and now groceries are so high right and there's a massive mortgage payment because house pool right at my house but I got to know no other money but at least I can do the Smith with right that's the thing I'm saving something for my retirement
 I'm like and I don't know when a lot of people to they think about I know you have I love your thoughts on this but people with work pensions and these types of things government pensions and things that think that they don't have to do anything extra for their retirement a lot of them think that I've done the phone number of plans for people in the government I did a presentation to talk for a group of people of working for the government to give an employee but you know what the rule of fun if you're in a 30-year government pension rule of thumb is the pension plus CPP together are half of what you're making at the end that's the rule from now if you are a couple and you're getting half of what your salary was and your spouse is getting nothing that's probably not enough for you now you're both 30 years in a government it's half of what you were making at the end now that might be enough or I might not it depends on the lifestyle you've gotten used to and yeah
 what happened recently where there's been a bunch of issues with some of the weight of the pensions were being managed they were losing a lot of money because the teachers one in Ontario Alberta Government has the company that they had was messed up the Investments and actually was they were actually being too conservative anymore to keep being too aggressive pension the money is invested rights of the Investments blow up then your pension is as good as the company of your employer right now the employer's the government it's probably going to be good but if your employer is a private company like he robbed and Ontario we had lots of people that that used to work for Nortel and had a Nortel pension while you know what that was Nortel went bankrupt no pension, no no includes Theory assumes that you and the company you're paying into you retire if you stop putting money in then the pain
 is a lot smaller people that have a pension one thing about it was you that they use to get hardly any artist. Like maybe twenty-five hundred or $3,000 of ours Peru to get hard again ersp so I allowed him saying I'm I make a good income I miss big pension if I can do tax deductions like what can I do for a tax deduction well Smith maneuver the other things that we didn't touch him but maybe we could just a little bit is how people can do this when they own multiple rental properties use the points so some people say it makes your mortgage tax deductible it's not actually true it converts it to a tax-deductible credit line but only because you use it to buy the place right now if you use the money for everything else but you can still this miserable you pay it down and you've got to do it so our record for one client is 7 Smith maneuvers
 we had a house five rental properties and a cottage and we did seven Smith movers it was kind of cool now that you mention I think it probably was yes or some banks will actually the limit how much they will lend to one client right so that sounds like all day long but seven you've got it and more than one bank they have seven amazing they must be so well.
 get out of town are they like adopting people or anyting when I get the rent payment instead of just paying the mortgage you take the rent payment what do you do with it you put it that's cold but it's actually so it Will Smith movie this risk which is mainly investment risk so cashed them is just purely attack strategy so no rest so I can get the rent I have to use it to pay my rent expenses but actually it specifically says in the sea are any of this they don't like a walk all over the damn that cash I can borrow all the money for my rent expenses and I could take the red I can do whatever I want with it yes just so to be clear let's say that your rental property is vacant for the whole year and you just keep borrowing to pay all the expenses while all the interest
 you borrowed State Tax Board today in rental expenses right for all the expenses so what you do is you take the gross rent that you make you increase your mortgage payment by that amount of your purse your home mortgage another number b e l property when I get to the home so you take your gross rent you increase your home mortgage payment by that amount and use your rent to make it higher mortgage payment now you borrow back from the credit line cuz you paid your mortgage over that much and you bore back from a credit line to pay all the rental expenses so now you using this to pay your mortgage more quickly sounds awesome right in implementing it it's a little tricky and here's what I'm paid on the mortgage I picked out a bunch of credit problem is part of that is for the cash damn to pay rental expenses and part of it is for Smith maneuver right and so which one do I want a thing is you think while they're all directed by can keep him soon
 well not really because they're ductable on different lines on your tax return so you need a separate credit line to do it right it's a little tricky so for example this is what we sometimes do we help clients do or say OK Google in somewhere else or will split off that's a 50,000 and now we're going to use that 50000 to pay all your expenses for the next year or two and Meanwhile we're going to pay your gross rent on the mortgage Andrew Smith drove her over here when you use the investment loans to pay the interest on wait what was it to pay the let's say for 1 tomorrow to pay all the rent expenses increased my mortgage payment but I'm going to do the Smith River as if I hadn't increased it okay the end of the year my sweater was exactly like it would be a
 but I paid my mortgage down by fifty thousand more cuz that was what the rent was on say and then it would have to do is have to replenish this 50,000 Predator life right after increase it by another 50 so because I built up to 50,000 available credit in the Smith Monroe, but I haven't used it so now I got to lower that limit increases other limits I got another girl another for sure the little tricky and see the problem with it is if you weren't doing it you can invest that extra amount right so I found is to make it worthwhile you really need this like you want to do the Smith number to the max cuz if doing the cash that means I do a smaller Smith maneuver then actually worse off if there's no risk and I state facts but you don't have any Investments so it's less beneficial than the Smiths maneuver over time okay all right so but if you do it say to a separate unsecured credit line and then you use that to pay
 rental expenses generally try to do it a year or two years and then you do Smith whatever like normal and then what I'll do is I'll take extra credit from here and to pay off I think I could have 50000 credits on my credit line am I supposed to do I split it off at that point use that to pay office other credit line and then do it so what happened to see I've done the Smith movers to the Max and I've used a credit line for everything else I'm not doing less Smith movie that I was otherwise it's a little tricky and you can easily mess this up and it's a problem with this mr. it's not that hard to mess it up we've had a few clients at Star Dewey Smith maneuver and then ran into financial trouble and then you know what we come back and put $50,000 worth of other costs on their Smith River credit line is like I can't really claim it on your tax return
 it seemed just really messed this up we got to sort it all out again rights got to clean it up yet so you can't at all if you've mixed it like what you have to do the keymaster a calculator and then split it or refinance summer adderal up and borrow somewhere else to pay it all off or something you do is you know what let's just start over will sell all the Investments pay it all down if there's anything left put it into the mortgage you know take my credit investing just start over again so like what do you like it you can look at different ways to clean it up but best thing is just don't mess it up just always make sure you never use the deductible credit line for a non-deductible purpose I kind of be fine and thank you so much are there any other things that we should cover on this
 I think that's not going to find out how can we learn more that you expect good long-term growth from ideally tax-efficient we know that you're treating me a little taxed as possible over the years and letting it grow so some people think that to buy investment it has to be something that pays income and if you read the text it says if you're bored too aggressive tax deductible if your investment to get on pays income but so they think while I have to buy a different stock because if you have to pay income but it's actually not true it doesn't have to so I have to be is an investment that could pay income like for example a lot of stocks you buying those smaller companies they're growing so they're reinvesting all their props not paying a dividend companies that pay dividends are using the mature very slow going companies X they got extra profit and they pay out dividends right so a lot of companies don't pay a dividend yield on Amazon doesn't pay a dividend even warned
 the company doesn't pay a dividend cuz he says why you know what I can reinvest this money more effectively than you can so I'm not going to have a lot of growth mutual funds or ETFs with all star fund managers pay little or nothing in the way of dividends and it all stays tax-deductible because they could pay dividends that's all that matters it's something that has to be able to pay income so for example you can't buy a real land or gold bullion bars or something that cannot pay a dividend stocks futures or options Futures and options can't pay a dividend okay okay but they can't but any stock could pay them whether it does or not doesn't matter it but it could pay one so basically that's good to know it on the side with options you can do with Raul and he had to do it with gold bullion bars what about have you heard about that
 neither can pay me interest but have you heard of the new I don't know how it is but you can invest so you invest in a piece of art with a bunch of other people and the company will sell it like later I have a rear end up on the believe what's happening is it's not just aren't you kind of have shares of some of the art of something and you can get some payments from there okay so that would be fine then if if you can get some income payment at some point that could work doing its I find it's called send you the link to it like you don't personally have to do anything cuz the people that run the company or are at Sheila's so we don't pick the art you like if you put it right art art has actually made a good investment over the years
 nothing so I have much more conference in the stock market profits so I Define risk not as how much my vestments go down up and down I-25 and risk is how confident is a my that is going to give me enough for their tournament that I want so at what time I want if if I need in my financial planner at 8% per year return so how confident I am I that 25 years from now I'm going to have made 8% per year or more and if I ever sent 95% that's how I Define risk and so we would have the bigger risk that way because I'm not so sure of how much it's going to grow the stock market will always done 8% a year or more over the long-term if you have enough then that's going to get all of the growth of the stock market write a lot of the stock market Investments are trying to get reasonable return with less risk and therefore they're not actually trying to be
 the market or even match the market there trying to get less risk while you're probably getting it lowered turn that is best for the full growth as I'm trying to beat the market over time right so all of our partner doesn't have long-term track record is beating the index after fees so we're trying to beat the market so that's all part of how to make the Smith River work well for you about this and find out whether or not the Smith Maneuvers right for that might work if we point our selves or clients in the right direction do you think we could talk to experts like you or or I'll get a couple of times if you go under strategies or must read this article on the host with Louver and I think that's the best article on it anywhere just read up and personal just under 4 so I'll just understand what it is we could you been just look at the risks think about how it fits in and and often as it's good to do this in a with a professional and you end up with a long-term Outlook so it's good to do it as part of your
 financial plan so you don't know how to get started doing some Uber taxi interesting story writing Financial plans and I found it for so many people it was just really hard to save enough money so I do a factory plans you figure out in detail what's the hourly want to retire and then I'll look at it so walk it to do this you have to put away a 2500 bucks a month and they said I can I can't do that cuz that's how much you have to do is so I said where you living at this level you can you can retire at a lower level and this was always this debate about why baby you should live on less now so that you can maintain the same lifestyle after you retire but there's always a trade-off between your lifestyle today and lifestyle later and then I was over twenty years ago I was at a seminar with Fraser Smith what I was talking about talking about the Smith buber and there were about a hundred Furniture Planters it is it at a conference right and you know he'd finish his talk they all got up at shuffled off and I was just sitting in my chair thinking
 that's really that's absolutely brilliant so then I started looking at it so I found it when I when we have a back-up plan if people can't make it if we add Smith Brewery in very often that's the difference so now they can keep their lifestyle today and they can still maintain it after they retire and they're saving some and then add the Smith move to it now it's enough to make the retirement plan where you don't like this is this is great so now let's just be careful where we who use it for that we don't but I just found this is a really brilliant strategy and I've and it's for once people understand and understand the risk and have the right attitude you know it really works well and you could learn to have the Advil like Risk tolerance is a right understanding the long-terms you know these are all things you can learn think a lot of people think no risk tolerances you are innately a non-risk young conservative person know you can learn to have a virus
 Bridget point because I wasn't always of this frame of mind either it took listening to podcast reading books talking to experts in the field like you it took work like I had to put in work and learn about it and now that I'm educated on it it feels like it's not even a risk it all to me anymore I've been doing it for years with bigger numbers and it doesn't feel like a risk because I'm doing it forever write a decade or so and I'm sure the investment will be at Becky's from the house so I don't see it as risky as we have a lot of clients that cause if they were just waiting for the housing market to you know people need to understand history like let's look back at the stock market crashing financial crash is it even real estate crash into One banks crack understand what the risks and what happened in most cases
 if you study the stock market long-term you see it goes up and down a lot but once you're in for 25 years it's really reliable part of learning to have a higher risk tolerance is just getting educated on the stock market and you know what it does and how it works I love it I think that's awesome do you feel good about it I spoke out about that great awesome well obviously if you want to learn more about it we've decided a few sources ads website is a great one for that there's books out I think we mentioned that before 2 thank you so much and I'm so happy to have you on here I hope you come back someday and so many other things I'd love to talk to you but I think I email you constantly say when to talk about some other Financial issue do it actually enjoy these I'm just coming out Beyond podcast as well so I actually really enjoy doing this
 yes it's going to be called the unconventional wisdom podcast with a treble are you found a couple of fire podcast as well and yeah I just got on that all right well thanks a lot for your time is awesome baby was fun thank you for listening to how to be a mortgage broker if you love the show follow us and please leave us a review if you have questions or suggestions for the show or relaxed be featured guests just email me at Jamie at mortgages by Jamie. Call Jamie j a m i e s mortgages by Jamie