Comments on: Is the Smith Manoeuvre a Secure Way to Create Wealth? Part 3 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/ This is where your finance takes place Thu, 09 Feb 2012 14:46:06 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: The Financial Blogger | What is the Tax Deductible Mortgage Plan (TDMP)? http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-2592 The Financial Blogger | What is the Tax Deductible Mortgage Plan (TDMP)? Fri, 20 Jun 2008 10:01:02 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-2592 [...] in my province), I was really curious about their plan. This is basically a firm offering to setup The Smith Manoeuvre for your financial [...] [...] in my province), I was really curious about their plan. This is basically a firm offering to setup The Smith Manoeuvre for your financial [...]

]]> By: Brian Poncelet http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-276 Brian Poncelet Sun, 29 Jul 2007 16:27:26 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-276 Hi FB, One risk you did not talk about is disability. Getting sick or disabled is much bigger ...if you only get say 60% of your paycheque. Your readers should review their disability insuarance coverage at work or consider critical illness insurance. regards, Brian Poncelet, CFP Hi FB,

One risk you did not talk about is disability. Getting sick or disabled is much bigger …if you only get say 60% of your paycheque. Your readers should review their disability insuarance coverage at work or consider critical illness insurance.

regards,

Brian Poncelet, CFP

]]> By: The Financial Blogger http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-230 The Financial Blogger Sun, 15 Jul 2007 15:24:24 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-230 Hi Thomas, CRA does not allow individuals to deduct interest paid on RRSP loans. When you borrow money in order to earn income (which is not the case with RRSP) you are allowed to deduct the interest. Please visit this address for more information : http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/221/menu-e.html Cheers, FB. Hi Thomas,
CRA does not allow individuals to deduct interest paid on RRSP loans. When you borrow money in order to earn income (which is not the case with RRSP) you are allowed to deduct the interest. Please visit this address for more information :
http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/return/completing/deductions/lines206-236/221/menu-e.html
Cheers,
FB.

]]> By: Thomas http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-228 Thomas Sat, 14 Jul 2007 04:53:02 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-228 I'm not familiar with the "SM". Can you explain how the loan becomes tax deductible? CRA is pretty specific that loans used for RRSP contributions are not tax deductible. Thanks. I’m not familiar with the “SM”. Can you explain how the loan becomes tax deductible? CRA is pretty specific that loans used for RRSP contributions are not tax deductible. Thanks.

]]> By: The Financial Blogger http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-223 The Financial Blogger Fri, 13 Jul 2007 00:01:44 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-223 FP, I agree with you regarding a drop of 90%. I guess that working on the 22nd floor, could save me a lot of worries (If I jump over the window, I will not have to worry anymore :wink:). Seriously, it could be quite painful. You point on the amount to leverage with the SM is interesting also. Technically, you should do it gradually over your mortgage payment. However, you are right as the amount borrowed will become significant at one point! FB. FP, I agree with you regarding a drop of 90%. I guess that working on the 22nd floor, could save me a lot of worries (If I jump over the window, I will not have to worry anymore :wink: ).
Seriously, it could be quite painful.

You point on the amount to leverage with the SM is interesting also. Technically, you should do it gradually over your mortgage payment. However, you are right as the amount borrowed will become significant at one point!
FB.

]]> By: FourPillars http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/comment-page-1/#comment-221 FourPillars Thu, 12 Jul 2007 12:46:26 +0000 http://www.thefinancialblogger.com/is-the-smith-manoeuvre-a-secure-way-to-create-wealth-part-3/#comment-221 I think your comment about mental health is pretty appropriate. Investors have to ask themselves the question of whether they are willing to handle a lot more stress if they are leveraging through a bear market. As for corrections - in 1929 US stocks lost 90% of their value. As Bernstein points out, if someone who retired at the peak of the market was 75% invested in equities, they would have been fine as long as they stayed invested in equities. Although I feel reasonably well equipped to handle a bear market, I honestly don't know if I could handle a 90% loss all that well. Another stress inducing situation is a long term bear market - what if the market loses 10% for three years in a row - that type of market can be very damaging from a psychological point of view. I use leveraging in my portfolio but one issue that never seems to get addressed about the SM is controlling the amount of leverage. It appears that the SM leverage amount is whatever you can borrow against your house regardless of your ability to pay the costs if things don't work out. Mike I think your comment about mental health is pretty appropriate. Investors have to ask themselves the question of whether they are willing to handle a lot more stress if they are leveraging through a bear market.

As for corrections – in 1929 US stocks lost 90% of their value. As Bernstein points out, if someone who retired at the peak of the market was 75% invested in equities, they would have been fine as long as they stayed invested in equities. Although I feel reasonably well equipped to handle a bear market, I honestly don’t know if I could handle a 90% loss all that well.

Another stress inducing situation is a long term bear market – what if the market loses 10% for three years in a row – that type of market can be very damaging from a psychological point of view.

I use leveraging in my portfolio but one issue that never seems to get addressed about the SM is controlling the amount of leverage. It appears that the SM leverage amount is whatever you can borrow against your house regardless of your ability to pay the costs if things don’t work out.

Mike

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