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Debt

The Mental Side of Debt

Tom Bradley recently responded to some questions from young homeowners about debt and it got me thinking about the mortgage paydown versus investing debate, again.  For us there will be an enormous amount of emotional well-being when we’re debt-free.  While we invest every month by contributing to our Registered Retirement Savings Plans (RRSPs) and maxing out our Tax Free Savings Accounts (TFSAs) throughout the year, we also work on killing our mortgage debt rather aggressively.  Here are some reasons why: Killing our mortgage is one of the ...
Debt

I write about investing but I have over $200,000 in debt

Yes, you read the title of this post correctly. I’m in debt, lots of it. I run this personal finance and investing site, and enjoy doing it even though I have over $200,000 in debt.  Debt sucks. Maybe I’m not much different than you.  We have a house but we don’t own it yet.   The bank owns almost half of it, we own the rest.  My wife and I hope our debts will be gone for good in another 7.5 years.   There are no guarantees in life but we are working on it. Most Canadians need to borrow money for a house or a car.  Most young adults ...
Debt

A 50 year bond is bad news for investors

I haven’t been alive for 50 years.  I can’t imagine locking myself into an investment product for that long.  Apparently some Canadians, namely institutional investors don’t feel the same. According to one recent report, our government has successfully sold $1.5 billion in 50-year Government of Canada bonds to take advantage of historic, dirt-low interest rates to get some money.  According to the same report I read, the debt will mature on December 1, 2064 at an interest rate just shy of 3%.  Previously, our longest government bond was ...
Debt

Paying down debt, should I change my tune?

Friends of My Own Advisor know I don’t like debt.  Since moving to our current home and taking on a fat mortgage, I struggle now and then with our debt load.  My wife and I are fortunate to have good jobs but you never know when that might change.  On that note, I can only control a few things when it comes to my job, namely my performance and behaviours on the job: do what is asked of me and more; complete my work effectively and efficiently; be professional; continue to mature my subject matter expertise and acquire new skills when and where ...

Should I implement the Smith Manoeuvre?

I’ve got a bunch of debt – mostly from my mortgage.  I wish there was a way to convert this mortgage debt into a tax-deduction, you know, like the Americans can, to kill off my mortgage faster.  Sounds like fiction in Canada right?  Well, this can happen to you and me if we follow The Smith Manoeuvre. While The Smith Manoeuvre is tricky to set up and takes some significant financial discipline to keep it going, it is perfectly legal and complies with our Canadian tax code.  I’ve been considering this approach for my portfolio for some ...

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