Are you tired of your mortgage being "dead" debt that doesn't help build your wealth? Based on numerous questions I have received from @onlygrowthincome and other Blossomers on my previous post, I decided to make this video on my day off today. I explain in simple terms the Smith Manoeuvre—a powerful Canadian wealth-building strategy that allows homeowners to convert non-tax-deductible mortgage debt into tax-deductible investment debt. 🇨🇦 I'll walk you through exactly how the strategy works, its benefits and associated risks. I also share my personal journey after implementing the strategy for the past 4.5 years, growing my investment portfolio to over $230,000, consisting of nearly 5,200 shares of XEQT. In This Video You'll Learn: ✅ What the Smith Manoeuvre is and how it works ✅ How a readvanceable mortgage lets you invest as you pay down your mortgage ✅ Why long-term compound growth is the real engine behind the strategy ✅ How capitalizing interest can improve monthly cash flow ✅ Why this is a long-term (20+ year) investing strategy ✅ How I manage risk and stay invested during market downturns ✅ Important CRA tax rules, record keeping, and tracing requirements ✅ Why the strategy can help Canadians build retirement wealth sooner instead of waiting until their mortgage is paid off My Smith Manoeuvre Portfolio: 📊 Updated Portfolio Value: $232,000 📈 Holdings: ~5,200 shares of XEQT 🗓️ Time Using the Strategy: 4.5 Years 🔵 Amount borrowed: $146,000 (Including $69,000 Equity borrowed via Prime the Pump plus $77,000 HELOC) 🟣 Unrealized Gains: ~ $85,500 🟢 Interest Paid: ~ $22,600 🟠 Tax Refunds: ~ $8,100 💬 Let Me Know: Have you considered using the Smith Manoeuvre? If you're already using it, I'd love to hear about your experience in the comments! 🙂 Have a wonderful weekend ahead everyone! 🌸🥂 https://youtu.be/Bm7J8zz3tVA
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25 Comments
Kyle Garrett@kgcottawa · 17d
@onlygrowthincome - hey, I run a SmithManouvre portfolio as well, if you’re ever looking for less intelligent and less frequent content from a random dude ! 😆😊
Robert Guay@stuckincalgary · 17d
Works great till the value of the house drops and they shrink your credit line. Also when interest rates go up markets do not go up as fast. Best not to gamble with the house you need to live in.
Fraser McGuire@frasermcguire · 16dEdited
I think for folks with modest incomes and room in TFSA/RRSP there are other less complicated ways to use leverage with your home. Minimum down payment (5% on a $500,000 home) is one way to increase leverage. You take the other 15% of the down payment you would have put towards the mortgage and invest it immediately in RRSP/TFSA. You have to pay the mortgage insurance but an insured mortgage also comes with a ~ 30 bps discount on your mortgage rate, so the expense is partly offset. You’re essentially starting with zero equity since selling your house roughly costs 5% of its value in fees, but it provides a more balanced portfolio for the investor. A house + a decent sized equity portfolio from day one.
Tim Johnson@tigertim · 16d
Gotta watch this
Sam @blomming · 16d
@moementumfinance apart from Smith manoeuvre, is there any other Avenue to invest in the market and save on taxes?
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