Some people might think I’m talking about the Devil when I write about the Smith Manoeuvre. In other cases, they might think I am promoting just another way that financial consultants found to sell more funds. In fact, I believe that the Smith Manoeuvre is a strong financial tool creating wealth over time while turning your mortgage into a tax deductible debt. Is it a safe way to make money off your property? I think so.
First things first, have you ever consider that you are sitting on thousands or maybe hundred of thousands of dollars and you are not making this money work for you? Do your really prefer to wake up at in the morning and working all year long than having your property working for you. Some people might say that you rather be sleeping until than suffering from insomnia due to your portfolio fluctuations. I don’t think it is a good reason. But what if?
See, “what if” is the real risk. What if you lose your job tomorrow and you can’t afford to pay your mortgage? What if the market crashes and you are left with nothing at the end of the day? What if interest goes up and you can’t keep up with the mortgage payment? What if you sell you house? What if?
How many people do you come across that will simply try to break your projects and dreams? In fact, they will do it for two reasons. The first one is because they are jealous of what you have or might accomplish. If they don’t succeed, they will surely do not want you to be a winner. They prefer complaint about their bad luck and drag down everybody they know with them. This is why they are asking you what if?
For the others, they just don’t understand fully what you are trying to do or they want to learn more about it. Although it is a negative approach to understand something, asking what would happen if the worst case scenario happens is not necessarily a bad way of seeing things. At least, they are trying to see the full picture. Those people will challenge your choice and they are very useful to test your mind and theories.
Nonetheless, I don’t think the Smith Manoeuvre is a safe way to make money just because some people don’t think so. There are several risks that you will encounter during a Smith Manoeuvre. However, I think that risk is only a perception of human beings of the unknown. There is no such risk until consequences really happen. We will discuss such risk further on another day. Since then, please send me your comments and thoughts about the Smith Manoeuvre. I just love to be challenged!
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