Comments on: The Smith Manoeuvre Resource http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm Building Wealth through Saving and Investing Fri, 12 Mar 2010 01:20:05 -0500 http://wordpress.org/?v=abc hourly 1 By: Paid Off Mortgage and the Smith Manoeuvre | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-72405 Paid Off Mortgage and the Smith Manoeuvre | Million Dollar Journey Tue, 03 Mar 2009 11:31:06 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-72405 [...] for income) producing assets.  Basically, you obtain a special kind of mortgage, called a readvanceable mortgage, which increases the credit line limit as the mortgage is paid down.  The credit line is then [...]

[...] for income) producing assets.  Basically, you obtain a special kind of mortgage, called a readvanceable mortgage, which increases the credit line limit as the mortgage is paid down.  The credit line is then [...]

]]> By: Tron http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-71970 Tron Fri, 27 Feb 2009 04:56:49 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-71970 Hello. I love your web site!. Brilliant!. I am planning to start the SM and was wondering how people set up Quicken to manage it. I am not sure how I would set it up at all. I was thinking of setting up a liability sub account for the LOC under my mortgage account. Then, I would transfer from the LOC account to my SM brokerage account and purchase from there. By doing the LOC as a sub account of the mortgage, as the mortgage is paid down and the LOC is increased, the total balance (debt) should stay the same. How are others doing it in Quicken (or KMyMoney)? If this not the correct place to post a question like this...Sorry!!! Hello.

I love your web site!. Brilliant!.

I am planning to start the SM and was wondering how people set up Quicken to manage it. I am not sure how I would set it up at all.

I was thinking of setting up a liability sub account for the LOC under my mortgage account. Then, I would transfer from the LOC account to my SM brokerage account and purchase from there. By doing the LOC as a sub account of the mortgage, as the mortgage is paid down and the LOC is increased, the total balance (debt) should stay the same.

How are others doing it in Quicken (or KMyMoney)?

If this not the correct place to post a question like this…Sorry!!!

]]> By: Jay Day http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-69076 Jay Day Wed, 04 Feb 2009 19:56:24 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-69076 Thanks Frugal, Thought it might be too good to be true. Unfortuneately, the only way to come up with the capital to invest in the TFSA is to borrow on the secured line of credit. I guess with the prime rate so low (3%) if you find some good dividend paying securities you could use the TFSA and the dividends from within it to pay the interest costs and still have some left over to increase your SM. Does that make any sense to you. Thanks Thanks Frugal,

Thought it might be too good to be true. Unfortuneately, the only way to come up with the capital to invest in the TFSA is to borrow on the secured line of credit. I guess with the prime rate so low (3%) if you find some good dividend paying securities you could use the TFSA and the dividends from within it to pay the interest costs and still have some left over to increase your SM. Does that make any sense to you.

Thanks

]]> By: FrugalTrader http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-68524 FrugalTrader Thu, 29 Jan 2009 14:53:35 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-68524 Jay Day, on the surface, the TFSA and SM accounts are completely separate. You lose the tax deduction if you use the investment loan within a TFSA. However, you can use the TFSA distributions (if you buy income securities) to pay down your mortgage which can then be reinvested within your SM portfolio without any tax penalty. Jay Day, on the surface, the TFSA and SM accounts are completely separate. You lose the tax deduction if you use the investment loan within a TFSA. However, you can use the TFSA distributions (if you buy income securities) to pay down your mortgage which can then be reinvested within your SM portfolio without any tax penalty.

]]> By: Jay Day http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-68521 Jay Day Thu, 29 Jan 2009 14:41:09 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-68521 Frugal, Just wondering if you know how the TFSA will affect the Smith Manouvre. Will you be able to start the SM and use the TFSA as well to maximize your investment/ paydown of your Mortgage by using the dividends and or capital gains to pay down your debt quicker? Thanks Frugal,

Just wondering if you know how the TFSA will affect the Smith Manouvre. Will you be able to start the SM and use the TFSA as well to maximize your investment/ paydown of your Mortgage by using the dividends and or capital gains to pay down your debt quicker?

Thanks

]]> By: The Cash Flow Dam (Cash Damming) Explained | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-61633 The Cash Flow Dam (Cash Damming) Explained | Million Dollar Journey Mon, 24 Nov 2008 11:30:44 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-61633 [...] example, say you had a small business with $1,000/month in expenses and a readvanceable mortgage.  The $1,000/month expense would be paid by the home equity line of credit (HELOC), and the extra [...]

[...] example, say you had a small business with $1,000/month in expenses and a readvanceable mortgage.  The $1,000/month expense would be paid by the home equity line of credit (HELOC), and the extra [...]

]]> By: Ray http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-61150 Ray Wed, 19 Nov 2008 17:55:55 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-61150 Can the Smith Manoeuvre be used in Quebec? Can the Smith Manoeuvre be used in Quebec?

]]> By: October 2008 Net Worth Update (-0.26%) | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-58865 October 2008 Net Worth Update (-0.26%) | Million Dollar Journey Thu, 30 Oct 2008 10:30:58 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-58865 [...] Residence Mortgage (readvanceable): $123,400 [...]

[...] Residence Mortgage (readvanceable): $123,400 [...]

]]> By: The Smith Maneouvre during a Market Crash | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-56027 The Smith Maneouvre during a Market Crash | Million Dollar Journey Thu, 09 Oct 2008 10:30:44 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-56027 [...] increase of variable rates due to the credit crunch. In addition to this, one of the more popular readvanceable mortgages, The Firstline Matrix Mortgage, has stopped offering the product altogether (source: Canadian [...]

[...] increase of variable rates due to the credit crunch. In addition to this, one of the more popular readvanceable mortgages, The Firstline Matrix Mortgage, has stopped offering the product altogether (source: Canadian [...]

]]> By: Ed Rempel http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-52628 Ed Rempel Fri, 19 Sep 2008 00:27:22 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-52628 Hi Phil, The tax ownership and the legal ownership can be different. You can borrow jointly but invest the money in an account in your name, your spouse's name, or a joint name. Then you can decide who has officially borrowed and that person(s) can claim the interest deduction and claim any taxable income on the investments. However, once you claim it once, you cannot really change it in the future without repaying the loan and reborrowing again - so think carefully about who you consider to be borrowing to invest. It should be the one that would benefit the most over the long term. Ed Hi Phil,

The tax ownership and the legal ownership can be different. You can borrow jointly but invest the money in an account in your name, your spouse’s name, or a joint name. Then you can decide who has officially borrowed and that person(s) can claim the interest deduction and claim any taxable income on the investments.

However, once you claim it once, you cannot really change it in the future without repaying the loan and reborrowing again – so think carefully about who you consider to be borrowing to invest. It should be the one that would benefit the most over the long term.

Ed

]]> By: PhilC http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-52610 PhilC Thu, 18 Sep 2008 19:36:59 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-52610 For a smith manoeuvre: If the house is jointly owned and the HELOC is joint. Does the investment account need to be joint also? Does this affect tax-deductibility? For a smith manoeuvre:
If the house is jointly owned and the HELOC is joint. Does the investment account need to be joint also? Does this affect tax-deductibility?

]]> By: The Difference Between Good Debt and Bad Debt | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-47879 The Difference Between Good Debt and Bad Debt | Million Dollar Journey Tue, 12 Aug 2008 09:30:50 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-47879 [...] is not tax deductible (unless you live in the United States). On another note, there are ways to convert your bad debt mortgage into good debt as I’ve written about many times [...]

[...] is not tax deductible (unless you live in the United States). On another note, there are ways to convert your bad debt mortgage into good debt as I’ve written about many times [...]

]]> By: The Smith Manoeuvre - A Wealth Strategy (Part 1) | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-40983 The Smith Manoeuvre - A Wealth Strategy (Part 1) | Million Dollar Journey Thu, 26 Jun 2008 17:09:08 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-40983 [...] Obtain a readvanceable mortgage. This is a mortgage that has 2 entities, the home equity line of credit (HELOC) and the regular [...]

[...] Obtain a readvanceable mortgage. This is a mortgage that has 2 entities, the home equity line of credit (HELOC) and the regular [...]

]]> By: Best of Million Dollar Journey: May 2008 | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-38279 Best of Million Dollar Journey: May 2008 | Million Dollar Journey Fri, 06 Jun 2008 11:52:55 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-38279 [...] have been numerous comments on the Smith Manoeuvre threads about how investments that distribute return of capital are not recommended with leveraged [...]

[...] have been numerous comments on the Smith Manoeuvre threads about how investments that distribute return of capital are not recommended with leveraged [...]

]]> By: The Financial Blogger | At What Age Do You Want To Become A Millionnaire? Part 2 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-36894 The Financial Blogger | At What Age Do You Want To Become A Millionnaire? Part 2 Mon, 26 May 2008 10:01:42 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-36894 [...] Residence Mortgage (readvanceable): [...]

[...] Residence Mortgage (readvanceable): [...]

]]> By: FrugalTrader http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-35666 FrugalTrader Wed, 14 May 2008 15:49:33 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-35666 ChinStrap, if you have your principle residence paid off, you can borrow up to 80% of it's value in the form of a HELOC without incurring any CMHC fees. If you have a higher risk tolerance, and a little more aggressive, you can use that money to invest in equities and claim a tax deduction on your interest paid. That's in essense what the SM ends up to be. When the non ded mortgage is paid off, the tax ded investment loan will remain. ChinStrap, if you have your principle residence paid off, you can borrow up to 80% of it’s value in the form of a HELOC without incurring any CMHC fees. If you have a higher risk tolerance, and a little more aggressive, you can use that money to invest in equities and claim a tax deduction on your interest paid.

That’s in essense what the SM ends up to be. When the non ded mortgage is paid off, the tax ded investment loan will remain.

]]> By: Chinstrap http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-35662 Chinstrap Wed, 14 May 2008 15:43:41 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-35662 First of all, great website! I have used a simple version of the SM in the past - credit lines on my principal residence, plus dipping into margin in my brokerage accounts. This has allowed substantial tax deductions in the past.. But Question.. now that our mortgage is paid off, what rules, guidelines do people follow to determine how much leverage to put on the house to then invest in equities, mutual funds, etc.? I managed to pay off my principal residence through stocks but mainly via buying and selling principal houses/condos.. Perhaps another discussion point First of all, great website!

I have used a simple version of the SM in the past – credit lines on my principal residence, plus dipping into margin in my brokerage accounts. This has allowed substantial tax deductions in the past..

But Question.. now that our mortgage is paid off, what rules, guidelines do people follow to determine how much leverage to put on the house to then invest in equities, mutual funds, etc.?

I managed to pay off my principal residence through stocks but mainly via buying and selling principal houses/condos.. Perhaps another discussion point

]]> By: How Exposed is the Smith Manoeuvre to the Lipson Case? | Million Dollar Journey http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-28577 How Exposed is the Smith Manoeuvre to the Lipson Case? | Million Dollar Journey Wed, 19 Mar 2008 09:31:44 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-28577 [...] readers have contacted me regarding the current Lipson case and it's potential affect on the Smith Manoeuvre.  When it comes to legal matters, I usually contact a lawyer for more information.  It [...]

[...] readers have contacted me regarding the current Lipson case and it's potential affect on the Smith Manoeuvre.  When it comes to legal matters, I usually contact a lawyer for more information.  It [...]

]]> By: Weekend Links - Things Aren’t Always What They Seem Edition http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-27525 Weekend Links - Things Aren’t Always What They Seem Edition Mon, 10 Mar 2008 01:08:53 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-27525 [...] Dollar Journey has a complete Smith Manoeurve resource that will be interesting to readers in [...]

[...] Dollar Journey has a complete Smith Manoeurve resource that will be interesting to readers in [...]

]]> By: Weekend Links - Things Aren’t Always What They Seem Edition http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm/comment-page-1#comment-27526 Weekend Links - Things Aren’t Always What They Seem Edition Mon, 10 Mar 2008 01:08:53 +0000 http://www.milliondollarjourney.com/the-smith-manoeuvre-resource.htm#comment-27526 [...] Dollar Journey has a complete Smith Manoeurve resource that will be interesting to readers in [...]

[...] Dollar Journey has a complete Smith Manoeurve resource that will be interesting to readers in [...]

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