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What if I lose my job?
The Smith Manoeuvre provides a financial
security blanket. It builds a free and clear investment portfolio
that you can call upon if financial need arises. It gives you the
freedom of liquidating free and clear investments to reverse the program
if necessary.
How does the stock market turmoil factor into
this?
The beauty of The Smith Manoeuvre is that you can use your tax deductible
investment loan to buy all sort of investments - not only stocks.
You can invest in investment real estate, mutual funds, your business,
your spouse's business or someone else's business. The book outlines
all the choices. No matter what you do, use a good financial planner
and sound investment practices to build a balanced portfolio, and
reduce exposure to stock market downturns. Diversification is the
golden rule of reducing risk. To have all of your assets tied up in
high risk stocks - or even in your home - puts you at risk.
Is this too good to be true?
Is The Smith Manoeuvre is indeed very good, and very true.
It is completely legal. For over two decades, hundreds of families
have used or are using The Smith Manoeuvre. It has been reviewed by
the CRA and endorsed by reputable clients, and experts.
Can’t I just get a home equity line of Credit (HELOC)
Usually a HELOC is a second mortgage to secure a loan or a credit
line. If money borrowed in this fashion is used for investment, the
interest expense will generally be deductible. So the ability to do
the borrowing part of The Smith Manoeuvre seems to be in place. Unfortunately,
the other half of The Smith Manoeuvre, the ability to recover monthly
reductions of the first mortgage in order to increase the investment
portfolio, is impaired. Do not let a banker convince you to use a
simple HELOC to implement The Smith Manoeuvre - there is a much smarter
way to set up your financing that costs no more to establish than
a HELOC, but avoids subsequent operational difficulties. It is called
a re-advanceable mortgage.
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