How to Successfully Implement the Smith Manoeuvre (Podcast with Ed Rempel)

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You know the basics about the Smith Manoeuvre. It’s a big decision. Here is a discussion of the big issues.

Listen to my new podcast with Sean Cooper from BurnYourMortgage.ca .

Here is the link:

How to Successfully Implement the Smith Manoeuvre with Ed Rempel

We discuss:

• Why should you consider the Smith Manoeuvre?
• How to know if the Smith Manoeuvre is right for you.
• Managing the risks. Avoiding the common errors.
• Tax tracking & Capitalizing.
• Dealing with CRA.
• How the Smith Manoeuvre can fit into your retirement plan.
• What happens if you move?
• What happens once your mortgage is paid off?
• What happens after you retire?
• Options – The 7 Smith Manoeuvre strategies.
• Effective investing with the Smith Manoeuvre.
• Implementing the Smith Manoeuvre.
How I can help.

Do you have more questions? I have what I believe is the most in-depth discussion of the Smith Manoeuvre anywhere on my blog. Read it and ask your questions here: The Smith Manoeuvre – Is your mortgage tax deductible?

You can listen to my new podcast with Sean Cooper here:

How to Successfully Implement the Smith Manoeuvre with Ed Rempel

 

Ed

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Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax  accountant, expert in many tax & investment strategies, and a popular and passionate blogger.

Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.

The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.

Get your plan! Become financially secure and free to live the life you want.

2 Comments

  1. Aleks Mitrovic on November 17, 2019 at 8:25 PM

    Hello Ed.
    My mortgage is almost payed off.
    I only heard of the smith maneuver a few years ago.
    I want to buy a investment property with the downpayment using my home equity. Will I still be able to use the smith maneuver to help me pay down the mortgage on the investment property in this scenario?



  2. Ed Rempel on January 26, 2020 at 8:46 PM

    Hi Aleks,

    Sorry it’s taken me a while to get to responding to your question.

    There are positive and negative effects of using your equity for a rental property, instead of for the Smith Manoeuvre.

    You can use the Smith Manoeuvre on both your principal residence and a rental property, which can magnify the strategy. With rental properties, it is usually best to pay your mortgage down as slowly as possible, since it is tax-deductible, so the Smith Manoeuvre on a rental property tends to be quite small. Often $0 to start and only $2-300/month investment.

    Your question is about using the Smith Manoeuvre to pay down your rental mortgage more quickly. The Smith Manoeuvre can help pay down mortgages more quickly because you can pay your tax refunds onto your mortgage. I would suggest that there are better uses of your tax refund than paying down your tax-deductible mortgage on a rental property.

    If you use some of your home equity to invest in a rental, you have that much less to invest in something else, such as equities.

    Equities have far higher long-term returns than real estate. For example, over the last 40 years, the Toronto Stock Exchange has had 6 times the growth of Toronto real estate. This was the best 40 years in history for Toronto real estate and a somewhat below average time for Canadian stocks. US and global stocks had much higher returns than Canadian stocks.

    However, if you leverage real estate much higher than you would leverage stocks, then real estate can be more effective.

    Comparing stocks to real estate as an investment is an involved topic and only partly what you were asking.

    I hope this is helpful, Aleks.

    Ed



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