041: Your Smith Manoeuvre Mortgage Questions Answered!

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Money Mechanic
Hello, listeners. Welcome to Explore FI Canada, where we sit at the roundtable with Canadians, and share their thoughts, ideas and personal journeys to financial independence.

Chrissy
Thanks to Matt McKeever for sponsoring Explore FI Canada. Matt is a Canadian investor, CPA, entrepreneur, and real estate expert who achieved FIRE at age 31. Do us a favour and check out his YouTube channel by searching Matt McKeever or using the link in our show notes.

Money Mechanic
Hello, again, listeners. TGIF Chrissy!

Chrissy Kay
Yes, it’s finally Friday, and it’s a sunny Friday here.

Money Mechanic
Well, it’s a little smoky actually over here on the island. But you know what? we can say TGIF, because we always release on a Friday too. So they’re gonna be listened to this Friday.

Chrissy Kay
Exactly. Works in our favor.

Money Mechanic
It does. All recordings now are on Fridays, just so I don’t have to get confused. Alright, well, today, we have the roundtable again, we’ve got a couple seats open, and we invited a couple of guests on. First of all, we reached out to our listeners, Chrissy. And what did we ask them?

Chrissy Kay
We asked them: “do you have any mortgage-specific Smith Manoeuvre questions?” because we are having two special guests—not just one, but two—to answer the questions today.

Money Mechanic
Yeah, I think it was important to reach out because we see lots of posts. And there are lots of questions out there. And there’s maybe a little bit of misunderstanding too on the plain Jane Smith Manoeuvre and what some of the accelerators are. So it is our pleasure to welcome Robinson Smith back on the show the charming spokesperson himself: the man the myth, the author of “Master Your Mortgage for Financial Freedom“. Robinson, welcome back to the show.

Robinson
Okay, well, you’ve given me a lot to live up to. <<laughter>> It’s a pleasure to be here guys. Happy to see you guys again.

Money Mechanic
Yeah, thanks. And you brought along another expert with you, which is going to help with a lot of these questions too. You have a mortgage broker expert, Keaton. Welcome to the show. Thanks for joining us and helping us out and helping our listeners learn some more today.

Keaton
Thanks for having me.

Money Mechanic
All right. Well, I think maybe what we’ll do is just start off with Robertson giving us a quick rundown of the basics here before we get into those listener questions. What do you think?

Robinson
Yeah, happy to do that. I recall last time I was on this podcast, we we kind of skipped over the the basics of the Smith Manoeuvre strategy, because Mr. Money Mechanic you and I had done a more in depth podcast on FI Garage. And so you directed listeners to go over there. And for any of those who didn’t, I thought it would be nice just to give some basics on on this podcast Not take too long. So basically, the Smith Manoeuvre is a financial strategy to convert the non deductible mortgage interest of a principal residence into deductible interest. And a number of key things happen. While we’re doing this. The basic process of mortgage conversion requires that firstly, we borrow with a reasonable expectation of generating income. So we’re borrowing to invest. That means we’re buying appreciating assets, we’re increasing our wealth as we move through this conversion process of a mortgage. And because we’re borrowing to invest, we’re generating tax refunds, or generating tax relief, which on the very least an annual basis, we can take these tax refunds that otherwise we would not have received and apply them as a prepayment against the mortgage. So this is new money from the government, originally ours, but they send us some back. So we get to be rid of this nondeductible—this relatively expensive, nondeductible mortgage debt—much sooner than otherwise possible. So a number of good things happen simultaneously: we’re investing for our future; we’re reducing our tax bill; and we’re eliminating this expensive non deductible debt much sooner. And that’s the fundamental process of the Smith Manoeuvre. Now it requires a specific type of mortgage and Keaton will get a bit more into that. But effectively, the strategy was developed by my father back in the mid 80s. And he put his private clients into it for about 15 years before he published his book in 2002. I subsequently wrote my own version in 2019. It came out last November. But really what I’m trying to do now is get out to Canadian homeowners and speak to them about you know, the difficulties we all face. We’ve got high taxes. the average Canadian pays around half of their total income in taxes. So more than clothing and food and shelter combined: the basic necessities of survival. You know: we’ve got inadequate pensions; we’ve got mortgage expense; we got braces for the kids; inflation; you know? So a lot of difficult times out there for Canadians. But there is help. You know, you do your research, you you read up, you find these different strategies—including the Smith Manoeuvre—and there is help out there. And my goal right now is to make sure that Canadian homeowners are aware of this strategy. That’s where I’m at these days. That’s what I’m doing. I’m developing a Smith Manoeuvre Certified Professional network across Canada of various financial professionals. And the reason we’ve got Keaton here today is—not only is he a very handsome man—but he also is one of our Smith Manoeuvre Certified Professionals. So he knows a lot about the strategy and mortgages, and he’s doing a lot of good helping a lot of people get into the right type of product. So basically, what we aim to do is have Canadian homeowners start saving now. So they can take advantage of compound growth rather than all of their dollars going simply to the mortgage and not being able to be utilized for investment purposes. We can do both: we can pay down our mortgage; and we can invest; we can reduce our tax bill; and live life happily ever after.

Chrissy Kay
That’s fantastic. And I think now is also a good time for Keaton to introduce himself and tell us a little bit more about how he got involved with Smith Manoeuvre mortgages specifically, and what his expertise is to allow him to help guide people in the Smith Manoeuvre.

Keaton
Well, thanks again for having me, guys. So I’m a mortgage broker. And I’ve been in the industry for about six years. I started out as an unlicensed assistant on a team, and when I left I was the number two for the team handling the sales side of my business partner, Scott Brennan was handling all the backend underwriting. We were actually ranked 18th in Canada for all brokers and about 70% of our clients are real estate investors. So this is the team that we left from. Since then we’ve branched off and we focused working with self employed and investment clients, as well as owner occupied people trying to build towards their retirement and long term goals. I actually came across a Smith Manoeuvre, believe it or not a few years ago, when Rob Smith showed up with another mortgage broker at an event with a developer that we worked with when I was on the old team. And it wasn’t very impressed that there was this mortgage broker speaking on stage, and then this tall man with this dry sense of humor got up there. And my life changed, in a sense. Like, I’d heard of the Smith Manoeuvre, I was familiar with clients doing leveraged investing to buy investment properties, but the power of being able to do it incrementally, instead of pay down your mortgage or $100,000, $200,000, potentially buy a property, rinse and repeat. The growth from doing it in little bite sized pieces, and the consistency of it was really what caught me off guard and I started to dig into it. And eventually Rob and I connected, and I think we’re basically married now. So…

Money Mechanic
Congratulations!

Robinson
Yeah, I’ve regretted that meeting.

Keaton
I’m still waiting for my ring.

Robinson
You’re gonna be waiting for a while.

Money Mechanic
Well, Keaton, at least you’re lucky you don’t live in Victoria. You know, I haven’t had Robinson knocking on my door for Saturday afternoon beers and barbecue yet, so you’re probably safer.

Keaton
That’s worse. I’m in Delta. So I keep getting these calls like: “hey! I’m in your neighborhood…”

Money Mechanic
Right on. Well, that’s a good introduction. Thanks for doing that. Now we do have these listener questions that we are going to put you guys to the test. The FI community is a lot of very smart people, and they do their research and they dig into these and they throw, you know, curveballs. We’re not lobbing softballs at you today. So, thanks to all our listeners for throwing them in there. Chrissy, would you like to start off with the first one?

Chrissy Kay
Sure, I will. So the first one is from Harrison, and he commented on our Facebook page. And so I’ll start off by introducing it, (he gives a bit of background), so let’s let’s read what he says.

I want to see if I can even pursue the Smith Manoeuvre at this point. When we got our house six years ago, we only put 5% down. I understand you need 20% down for a mortgage that you can use the Smith Manoeuvre with. At what point can you change your mortgage to start implementing the Smith Manoeuvre? Is it when I have paid 20% of my principal on the mortgage?

Robinson
Yeah, I’ll take the initial crack at this really briefly. There are a lot of different situations out there with a lot of different mortgages. And this is why it’s so important to enlist the services of someone like Keaton, who’s a Smith Manoeuvre Certified Professional on the mortgage broker side, because they know what products are valid for the strategy, which products are most suitable for the client’s individual situation. If you just go into your bank and say: “hey, I want a readvaceable mortgage” they’re going to tell you what they have. It’s going to be their readvancable mortgage. It’s either gonna work or not, but it may not be the best one for you specifically. But at any point, the requirement is yes, generally 20% down in order to have a mortgage, which we’ll start to readvance. I’ll hand it over to Keaton here, though.

Keaton
So there’s two real answers to this question. There’s: “when can I have a mortgage or convert to a mortgage that will allow me to implement the Smith Manoeuvre?” And then there’s the other side, which is, “at what point can I start the process to be set up for the Smith Manoeuvre?” In order to implement the Smith Manoeuvre, you need 20% equity. And you need a product that readvances. So you can’t get that when you put 5% down and buy. But there are lenders that allow us to set everything up correctly, day one. You buy a property 5% down, we set up the right charge on title, we get the right type of title insurance, we go to the right lender, and we get the right product, it just doesn’t start working yet. So in Harrison’s case, you would need to make sure you’ve paid them 20% before it makes sense to switch because I’m going to venture a guess that Harrison didn’t stumble into all these things that have to be set up correctly by chance. But if you’re in a position where you do it right, you can be ready the moment you have 80% equity. If you didn’t do it correctly, then the best bet is to, you know, just do a little bit of a guesstimate to see when you’re getting close to 80%.

Robinson
Sorry, Keaton, you said 80% equity: I think you meant 20%?

Keaton
Oh sorry—80% loan to value. On the lender side we always refer to loan to value. But when you have 20% equity in your property, a little bit before, that’s probably when you want to start looking at these things, so you don’t end up wasting five, six months.

Chrissy Kay
Okay, so if you had set it up properly at the beginning for it to transition into allowing the Smith Manoeuvre to happen, then what would happen at that point once you reach the 20% equity?

Keaton
So you would still need to go to your branch or call into your banking and essentially trigger it. But it gives you the ability to do it without redoing your mortgage, re registering with a new charge on title. And it’s as simple as basically asking for it, they’re probably going to do some sort of verification, but then it begins.

Chrissy Kay
Okay. And then if you hadn’t set it up, can you change your mortgage midway through your term? Or do you have to wait until your term is complete before you can transition it into a Smith Manoeuvre friendly mortgage?

Keaton
Sadly, nothing’s simple in our industry. If you were online and shopping rates and talking to multiple brokers, and you ended up in what’s called the “limited product”, there’s a chance that you cannot break your mortgage until your term is up. The only way you can pay off your mortgage is if you sell your property. So if you fit into that category, you would have to wait until your term is up. If you didn’t have a limited product, then there’s at least a conversation to have with a mortgage broker about does it make sense because you can break your mortgage and pay the penalty and get the right product. And that’s where we do a cost benefit analysis to see “does it make sense?” And quite often it doesn’t. And we just we put the plan together, we get ready and we wait. And that’s okay. But almost as often as it doesn’t make sense, it does. And there’s situations where maybe someone has a mortgage of 2.8%. And they can break it and get a 2% mortgage and that interest savings will cover the penalty, and they get the right product to begin the Smith Manoeuvre right away. So it depends on your situation. The best thing to do is just reach out to someone who does this a lot and ask.

Chrissy Kay
And so that leads into his final question. He does ask: “how do I know if I paid enough principal to qualify for the proper mortgage?” But that’s basically what you’re saying once you reach 20% equity. Correct?

Keaton
Yes, the thing to remember though it’s not 20% of what you paid: if the property’s gone up in value, you can do this sooner. So if you bought a property for 800,000 has gone up to 900,000 then you don’t need to wait to have paid down 20%. It could be the combination of the paid down 10% and it went up 10% You’re still at 80% loan to value at that point and you’re now eligible for the right product.

Money Mechanic
That’s a really good point.

Robinson
Yeah, that’s why you know, as soon as there’s an interest in implementing the strategy, it does pay to seek out an SMCP and ask the questions because not being a mortgage broker oneself, there’s a lot you don’t know that a broker will and you may be in a position to get going sooner than you think.

Chrissy Kay
Mm hmm. So that answers this question: “who should I talk to?” Is it an SMCP which is “Smith Manoeuvre Certified Professional” is that correct?

Robinson
Yes.

Chrissy Kay
Okay. And that could include a mortgage broker, a financial planner, accountant?

Robinson
We’ve got six different professions that we’re training up: realtors, mortgage brokers, investment advisors, mortgage conveyancers, insurance agents and accountants. But basically people would write into info@smithman.net and say: “I’m Darren from Delta or Suzy from Surrey, and I’m looking for an SMCP to help me look at my mortgage.” And so we’ve put them in touch with an SMCP mortgage broker.

Chrissy Kay
Would you help them decide which professional is the most suitable for their circumstances?

Robinson
Yes, I mean, typically, if they’re starting out—”I want to do the Smith Manoeuvre, but I don’t know who to talk to first”—well, you know, generally mortgage brokers are at the pointy end of the spear here, because if you don’t have the right mortgage product, the train doesn’t leave the station. So it’s generally a mortgage broker who’s going to be the first point of contact.

Money Mechanic
I just want to add in there, Robinson, you’ve mentioned it before, but this is across Canada, too, because all of our audiences spread out across this great country of ours. So just so everyone knows out there that this isn’t just west coast focused.

Robinson
Yes, that’s right. It’s a nationwide network we’re putting together.

Money Mechanic
Yeah, fantastic. All right. question #2: you guys did great on that. That was some good answers that. Even I learned something very valuable. So that’s awesome. Okay, so a friend of the show Megan, also from a Facebook post, here we—Robinson is familiar with who Megan is we’ve met her at meetups before—her question is a little more complicated here. She asks: “Would it be possible to use a HELOC from an investment property to put a downpayment onto a new property that the investor intends to live in, assuming the house had a suite, the investor intended to rent out.” So maybe I’ll leave that… well… maybe I should ask the second part first? Now let’s leave the first one and go with that. What do you guys think?

Robinson
Yeah, sure. I’ll tackle that. Is this the Megan I think it is?

Money Mechanic
It is the Megan you think it is.

Robinson
Hi, Megan.

Chrissy Kay
The one and only.

Money Mechanic
Yeah.

Robinson
Yeah. Well, nice to hear from you, Megan. So, would it be possible to use a HELOC from an investment property to put a down payment on to a new property that the investor intends to live in? Assuming that the house had a suite, the investor intended to rent out. The thing to remember here everybody is that when I borrow money, the key point which determines deductibility is: “what did I do with that borrowed money?” If I borrow to consume, so buy a car, buy fancy dinners, go on vacation, or buy my principal residence, I cannot deduct the interest. Right? The reason is, you can deduct if there is a reasonable expectation of generating income. So when we are buying our principal residence, CRA says: “that’s that’s a home where you’re going to live: you’re not going to be generating income from that—you’re going to be living there.” That’s the whole point of the Smith Manoeuvre, we can’t deduct this interest. Well the Smith Manoeuvre fixes that. In this case, we’re looking at borrowing from a HELOC, that’s secured to an investment property. And some people may think: “well, it’s an investment property. In order to buy that property I did borrow to invest because there is a reasonable expectation of generating income: I’m going to put renters in there, they’re going to send me money each month.” And yes, that’s absolutely the case. Now you can deduct the interest on that mortgage on that rental property. But just because you have space to borrow from that rental property, doesn’t mean you can do whatever you want with that borrowing and think that you’re going to still be able to deduct the interest on that, because it is the use of the borrowed money, which determines deductibility, not what is the security for that loan. So now, let’s say I’ve got $100,000 balance on my rental property, and it’s fully deductible. It’s the mortgage on my rental property, but I access through a HELOC, another 100K, and I go buy a principal residence in which my family is going to live. In this basic scenario here, the interest on that second $100,000 borrowing is not going to be deductible, because you borrow to consume—buy your own house. So we’ve got to be careful what we’re using the borrowed money for. Now, that being said, if we expand this more towards what the question asks, we now have a suite in this home: families living in this house, but we’ve got someone else who’s living in the basement and they are sending us money each month, we’re generating income. This is when you’ve got to go to your accountant and say: “OK, here’s the situation. I borrowed 100K from my rental property.” And really, the accountants not going to be hugely concerned that it came from a HELOC secured by rental property because he knows that is the use of the funds that determines deductibility. So he’s gonna say: “OK, it’s your principal residence, you’ve also got a suite in there, what square footage of your suite that you have the renter in?” So he’s going to have to do a calculation of how much interest on that borrowing from the HELOC secured by the rental property plus the mortgage that you get to buy your principal residence. There will be—again talk to an accountant, I’m not an accountant—but I expect you’ll find that there will be a proportion of that debt, both the 100K that came from the HELOC and maybe the 400K that came from another lender to buy the house. There is a portion of that interest which will be deductible, but the majority of it won’t be

Money Mechanic
OK. Yeah, that pretty much sums it up there. Sort of reading through part two of the question where she talked about income earning assets. But you covered that quite well. And the short answer I got from that is: “talk to your accountant.” Don’t mess around with tax. But it sounds like “yes, a percentage of—if there’s a suite—that some sort of percentage is going to work out that will be tax deductible.” It’s just a matter of doing it properly. By the sounds of it.

Robinson
Yeah, and you do have to do it properly. You know, the CRA doesn’t always come knocking. But if they do you want you want to be able to know what you’ve done and report it correctly. And I will say that the second part of this question, and Megan says: “I know the HELOC can only be used towards income earning assets, and obviously the suite would be earning income, etc, etc.” And I just want to clarify here that that a common misunderstanding is—and I see this all the time is—people are offering advice on the Smith Manoeuvre the general public and they’re saying: “hey, don’t forget, when you borrow to invest in order to be able to claim deductions, it has to generate income, it has to generate dividends.” It doesn’t have to generate income. It doesn’t have to generate dividends: it has to have the reasonable expectation of generating income. So I can buy an investment asset, which hasn’t traditionally sent out dividends or distributions or interest. But if there’s a reasonable expectation that it may, then I can still claim the interest. Because some like for example, mutual funds, some equity funds, they don’t they won’t have a policy of paying out dividends. But that’s not to say that they may not in the future.

Money Mechanic
Right. Yeah, that’s a good point to make there. So many people assume they got to go and buy dividend stocks do the Smith Manoeuvre and it’s just it’s not true.

Robinson
No, the universe of qualified investments is vast. It’s not just dividend producing stocks or mutual funds.

Money Mechanic
For sure. All right, Chrissy, you’re up next.

Chrissy Kay
OK. This is from Andrea, also from Facebook. She says: “my husband and I have a bit of a complicated story because we’re Canadian expats living abroad and have a home in Canada and are moving back to Ontario next year.” So she asked, I guess this is probably good for Keaton: “which banks actually offer readvancable mortgages?”

Keaton
Most of the big banks will offer a readvancable product, but that’s not really the right question.

Chrissy Kay
OK.

Keaton
The right question is: “which banks offer readvancable product that will work for what my needs are?” And a perfect example is one of the big banks with three letters in it, they have a product that allows you to…: it’s readvancable, it allows multiple components, the prepayment is where we get caught up. They only allow you to make prepayment once a year on the anniversary date. So if you plan on using like, if you own investment properties as an example or you want to accelerate the use of the Smith Maneouvre, it will not work for you. It will not work in an efficient way, it will be difficult to do it correctly. So it’s not all just about: “do I get the right product?” in the sense sense of: “is it re advancable?” but has someone actually looked at what I’m going to do with it? What complexity or use of the funds and the borrowing am I going to have? Does this product actually work for me outside of: “it’s just got the right name.”

Robinson
That’s a very excellent point.

Chrissy Kay
Yeah, I wouldn’t have thought of that.

Money Mechanic
It’s making me second guess the readvancable mortgage I have now. Going into property investment, and go “Hmm…”

Robinson
Does it start with three letters?

Money Mechanic
No, it doesn’t actually. Four is all. Alright, well, this this question gets better, Chrissy, so keep going.

Chrissy Kay
Yes. OK. So she says: “what do we need to have in order to qualify for the readvanceable mortgage?” So she’s asking this in terms of jobs and income.

Keaton
So that depends, once again. There are programs out there that if you are very fortunate, you can fit under “net worth programs.” An example is: I have one lender that you can buy either a residence or an investment property, you can put 20% down, you can get the readvaceble product on either the rental or the residence, and you require a certain pool of funds on top of your down payment that is greater than the mortgage. So they have a calculation where they say they want to see downpayment, additional net worth you’ve had for over a year equal to the mortgage amount. So it’s a “maybe” answer. But if you didn’t fit into that net worth program, then yes, you would need some sort of income and it can’t be solely from real estate. Because if a bank labels you a professional real estate investor or professional landlord, it is the kiss of death. And it’s something we do a lot to skirt with our clients and make sure they’re in a position where their income is usable.

Money Mechanic
I have a quick sort of follow up side question to that, just about the net worth qualification. Would that include registered assets like RSP and TFSA, as that pool of funds? Or would it be just margin?

Keaton
TFSA is 100% of assets. RSP is 70% of the worth of the asset. But since you mentioned margin, if it’s in a margin account, they will not use it at all.

Money Mechanic
Okay, interesting.

Keaton
So these are some of the things to look out for. And this is a lot of what we do, is going over this and seeing where does it fit? And there are other network programs as well. They just have different uses.

Money Mechanic
It’s interesting. I’m just going to keep going with this a little bit Chrissy, because I think it’s interesting—we’ve talked a little bit about this before—for the financial independence community, people may find themselves down the road in a position where they have a lot of net worth, but they don’t have a good T4 income. So there’s going to be some interest there in it. And I was, it’s interesting to hear what Keaton said about that. I think that’s an important thing for people to understand.

Keaton
And the cool caveat is: one of the lenders that has a net worth program will use real estate assets as part of your net worth.

Money Mechanic
Okay.

Keaton
But there’s all different policies and products. And it’s just a question of which one do you fit with? And the odds of you walking into that lender usually pretty slim.

Chrissy Kay
I wanted to get more specific with Andrea’s question. she actually gave us a little bit more info about her situation. I’m just wondering if you could give your feedback on it. So basically, like she said, she’s overseas right now, and when they come back to Canada, she’s saying that her husband will likely find a job right away, but she wants to take a bit of time off to spend more time with their kids. So she’s just wondering if neither of them can find a job right away, or doesn’t want to, what kind of mortgage should they be looking for so that they are ready and can hit the ground running when they’re ready to start implementing it?

Keaton
The challenge is that if you don’t fit into a net worth program, and you don’t have the income to qualify, it doesn’t matter if you’re trying to get a 15% loan to value, try to get $150,000 on a million dollar property. It’s theoretically possible but extremely difficult. So it would really depend on the overall circumstances, but if no ones working and you don’t fit into the net worth route, it is a very uphill battle.

Chrissy Kay
And if they were to get jobs sooner, that would definitely help them.

Keaton
Yes. And the other thing to be aware of is if you’re in a situation like this: the type of job you get—and not what you do, but how you get paid—is very, very significant. If you’re paid a salary or guaranteed hours, they will use your income right away, potentially before you’re even off probation. But if it’s a commission base, or it’s not guaranteed hours, it’s part time, you will have to wait two full years before they’ll use your income. There’s lots of little things that are sometimes worth having that extra conversation to figure out.

Chrissy Kay
Definitely something to ask an SMCP. So she has a third question. She says: “we’re fortunate enough to have the money to pay off the rest of our mortgage once we’re home, and are hoping that will qualify for a readvancable mortgage so that we can pay off the mortgage, borrow the loan, and invest the principal. What are the tax implications of doing this?”

Robinson
I believe what she’s saying… like in my book, I mentioned this one case where a relatively wealthy Canadian goes and buys a house. And then they say: “Oh, I have some investment assets that are valued at enough to pay off my mortgage entirely.” So what can be done here: this is the debt swap accelerator, but on a grand scale: it’s immediately eliminating all that non deductible mortgage debt. You redeem the investment assets—you’re of course going to want to look at taxation—but you redeem the investment assets for cash. In this case, I think the listener said their mortgage balance was $140,000. So in this case, if she’s got that in investment assets, she can redeem $140,000 of assets, and pay out the rest of that mortgage entirely. I mean, there’s going to be a penalty to do so. So you’d want someone to look at that. And again, it depends on the mortgage product, as Keaton was talking earlier, but in 99 of 100 cases, you’re gonna be able to pay out that 140K non deductible debt immediately, and then get a line of credit, for example, secured against the house, and borrow that back. Right. So you borrow back this 140,000 that you just paid down, and you go and buy the investments again. And this, this can happen in about a week or so. You know, we’ve got to wait for the trades to settle and all that sort of fun stuff. But sell the asset, pay out the mortgage, as long as there’s that line of credit that’s available and slapped on the side of the house, pull out that 140K and then buy the investments again. So you’re still invested. But now you have instead of $140,000 of non deductible debt, you’ve got $140,000 of tax deductible debt. Okay. So that does great things to your tax bill. Plus, you know, instead of having a whole bunch of years remaining paying non deductible mortgage payments, that’s gone.

Chrissy Kay
And so the tax implications really are on the end where you are selling off assets in order to pay off the mortgage. Is that correct?

Robinson
Well, yeah, there are a couple spots here. One is you may incur tax when you redeem the investments. And the second is you’re borrowing to invest. So you’re reducing your income. You’re generating tax deductions. So there’s somewhat offsetting—not necessarily fully offsetting—but those are the things you want to want to have a look at. I did a calculation here: if I’m assuming she’s got $140,000 mortgage, and she were able to get a HELOC at prime plus a half that would cost her about $350 a month to service that HELOC—the deductible debt. And just pulling a number out of the air: if her mortgage payment, while she maintains that $140,000 mortgage balance, and let’s say it’s $1500, and it has been for a long time, and it will continue to be so—well that $1500 dollars no longer comes out of her pocket. She only needs $350 out of her pocket. The difference of 1150 bucks can go to invest directly each month, after she services the interest. And there’s no change in out of pocket compared to when she did have the mortgage.

Chrissy Kay
It’s magical.

Money Mechanic
So, just walk that back a little bit for me here. Are you suggesting that instead of the lump sum, pay off, she say, invest that and then start the Smith Manoeuvre with the remaining 140K that’s owed?

Robinson
No, there’s there’s $140,000 mortgage balance, currently.

Money Mechanic
Yes.

Robinson
And if she’s got the capacity, she can redeem investments and pay that out entirely. The she reborrows it…

Money Mechanic
Yes.

Robinson
… to buy the investments back again. But what she’s gonna want to do is say: “look, I’ve been paying 1500 bucks a month against that 140K while I had that as a principal-plus-interest-amortizing loan, so I’m gonna continue to come out of pocket by 1500 bucks, because I was planning on it anyways, but now it only cost me 350 on that interest-only line of credit, so because I’m going to commit to coming out with 1500, I have the difference of 1150 to invest.” Which is much better than simply continuing to make a $1500 mortgage payment and watching that 140K take years and years and years to go down.

Money Mechanic
Sounds like I almost needed to dial up the accountant and get them over here for this show. We’re getting into some tax and accounting questions.

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Money Mechanic
All right, next question is from Kevin also submitted to us via Facebook. And I’m gonna do a little bit of intro to this question just in case people aren’t familiar with what “coast FI” means because that’s part of his question here. And just briefly, coast FI is when you have accumulated enough assets that you no longer contribute to your savings and investments and those assets themselves will grow to your financial independence number, typically by traditional retirement age of 65. So the number is gonna be different for everybody, but that’s sort of the basic principle of what coast FI means.

Chrissy Kay
And until you get there, you just have to support yourself.

Money Mechanic
That’s right. Yes. Thanks Chrissy. That’s an important topic. It might be part time work or whatever it is, yeah, OK. Got that out of the way. Kevin asks: “can I use the Smith Manoeuvre to get me to financial independence in combination with coast FI / semi-retirement?” So his situation is: “we are long-term renters with a good head start on our financial independence number. We are risk tolerant and have no problem leaving the readvancable mortgage open long term. We would like to soon buy our first forever home, (and he says) if we were to then slow down on our FI path, but instead use our mortgage payments and the Smith Manoeuvre to get us the rest of the way there. Could that work?” So I’m taking that he’s saying, as these investments grow as he’s converting that mortgage. Does itwork? What do you guys think?

Robinson
There’s a lot of variables in here. There’s a lot of information that I don’t have. How old is he? What’s his mortgage balance? All that sort of fun stuff. And in fact I had Chrissy send over some clarification points as well. But the end result of a question like this is: “what does the Smith Manoeuvre add?” I have no control over what his current investment portfolio is at, or what it’s going to grow to over however many number of years, so I kind of had to make my own assumptions here. And I think he asks, firstly, on what if I have a $500,000 house? If he buys a $500,000 house, and he implements just the plain Jane Smith Manoeuvre—so no accelerators on it—then one of the assumptions here, is the fact apparently he has $500,000 invested already, and that will grow over time. So hopefully to reach his goal plus throwing in what the Smith Manoeuvre is going to add in here. What’s the difference? Well, I used the amortization period of 25 years. That’s the timeline I used here. So if he’s got $500,000 invested, and if it does 6% growth, over 25 years, well, he’s hit his mark, that’ll be $2.23 million. Now, I realize he may not actually have 25 years remaining until his retirement point. But but that’s a value, I just simply don’t have at this point. But in any event, simply leaving that money invested over that period of time at that growth rate will be $2.23 million. If on top of that, we do the plain Jane Smith Manoeuvre with his mortgage, because we have to remember that if he buys a house and doesn’t implement the Smith Manoeuvre , that’s going to add zero value to his portfolio. But if he does implement the Smith Manoeuvre with his house, then he’ll add $226,000 to that previous total, I told you. So $2.23 million will increase to 2.5-2.6 million.

Money Mechanic
Perfect.

Robinson
If you follow here, but again, not knowing his full situation, there’s another option here. If he does have this $500,000 invested, he’s got the opportunity to do what we were discussing before, is redeem some assets, buy the house outright with no mortgage and then slap a HELOC on it, pull that out, and get invested again.

Money Mechanic
Yeah, that makes sense to just go through a refinance and make it work. So the second last part of this question here, he says: “what percentage of our financial independence number could be tied up in the Smith Manoeuvre and still make our plan feasible?” And I think you made a good point there without knowing more details about his specific situation, we don’t know what percentage that’s going to look like at all. So, yeah.

Robinson
Basically, I think what he’d want to do is say: “OK, how old am I? How much do I have invested now? How many years left till I want to retire? And what’s a reasonable growth rate?” And so take what he’s got invested now, apply that growth rate over that number of years. And he’ll get a total value of that portfolio at that point. And then he can go into the Smithman calculator and plug in the numbers for the mortgage side of things, and see what value that ends up being at the same growth rate, same period of time, and just add that to what he would have with his existing portfolio.

Money Mechanic
Right. So his Smith Manoeuvre investments are going to be leveraged, but the rest of his investments are not. So he’s asking how do you account for that when planning for financial independence?

Robinson
Account for that in terms of actually accounting?

Money Mechanic
Yeah, no, I don’t think that’s what he means. So that I think he’s kind of looking at it as, you know…

Robinson
…a net worth?

Money Mechanic
…I think it’s kind of like a net worth thing, right? Because if you’ve got the investment portion of it, you have to offset it with the leverage that you’re still carrying, right? Or the borrowing in the HELOC you’re still carrying. So…

Robinson
Yeah, and that’s what the Smithman calculator does. It’ll punch out a total estimated portfolio value after the amortization period that you input. But the fact is, we have to subtract the amount of the deductible investment loan because we’re converting your existing mortgage from non deductible to deductible. So we’re essentially maintaining your total debt, we’re just converting the nature of it. So what punches out, OK, let’s say your portfolio will be worth $1.5 million. But when we subtract the $500,000 investment loan, your total net is $1 million. Right. And so that leaves you a net benefit of $1 million, plus a clear title house, because if we have 1.5 in assets, we sell 500K of them to pay out that investment loan, we now have a million dollars in portfolio value plus a clear title house.

Money Mechanic
So what I got from that is, he should go to Smithman.net and have a look and maybe sign up for that your Smithman calculator, because I’ve used the calculator, and it’s pretty fantastic what you guys did with that, and for people that want to really examine their individual situations, it’s a good sort of DIY starting point.

Chrissy Kay
Yeah, it’s very easy to use.

Robinson
Yeah, absolutely. It’s pretty powerful. And then you get to throw in various accelerators and see what the results are. A lot of sensitivity you can run.

Money Mechanic
Alright, Chrissy let’s keep on moving here.

Chrissy Kay
OK, so this one is from Twitter from someone named “Another Loonie“. And they asked: “how do interest rates work for readvancable mortgages? Does it have two rates, or just one rate? If one, typically how much higher is it then a regular mortgage?

Robinson
Keaton: go.

Money Mechanic
You have to wake him up. <<laughter>>

Keaton
So there are two components to a readvanceable mortgage. Well, at the minimum. There’s your main mortgage component that is amortized being paid down. And that is going to… every month you’re going to make a payment, and then the principal you pay down is then going to become available on a line of credit. So comparing the mortgage component to the line of credit component, typically the mortgage component will be cheaper. As an example, right now, you may be looking at about 1.9% on a variable rate for that. The line of credit component is going to typically be currently 2.45% to 2.95%. So there is a difference. But the one thing they asked was how much higher is it than a regular mortgage? So I wasn’t sure if they’re asking: “are readvancable products more expensive than non-readvanceable products?” And the answer for that is typically: “no, about the same price interest rate wise.”

Money Mechanic
Because I thought… I mean, my own misunderstanding is that they were a little higher rate: you couldn’t get as good a rate as if you just want to sort of straight variable without the readvanceable portion, but I stand corrected.

Keaton
You can get a cheaper product that non-readvanceable if you go, like, the “no-frills” or “limited” route, but that’s not so much that you’re then comparing a limited product to a normal mortgage or readvanceable. But yes, if you are looking for the absolute bottom cost, the a non-readvanceable mortgage will be cheaper. But it’s because you’re selling your soul essentially: you can’t break the mortgage, repayments restricted and penalties are often larger. So you want to read the fine print on those.

Robinson
And to that point, you know, a lot of people are naturally very, very rate sensitive. And, you know, when they look at implementing the Smith Manoeuvre , they’re so rate focused that they say: “well, why would I take this readvancable mortgage at 2.1%, when I can just go to my bank and get a mortgage at 1.99%?” Well, you have to remember that, firstly, either you’re getting the right mortgage, which will enable you to generate $400K, $600K, $800K, $1.1 million of net benefit in the future, or you’re not getting the right mortgage. So you got to suck up that rate differential. And it’s not that much in the grand scheme of things if you’re going to be increasing your net worth by, you know, six or seven figures. And secondly, even if you’re your bank, the one you’ve been dealing with forever, even if they have their own—I mean we touched on this—but even if they have their own readvancable, and even if it has a slightly lower rate than the one that an SMCP broker is recommending, there’s a reason for that. Right? There’s going to be a lack of functionality. In many, many cases. prepayment allows a lot of different things that Keaton touched on. And you’re not necessarily going to be made aware of all these restrictions, when you’re sitting down with with the bank mortgage specialist whose job it is to sell that bank’s mortgage.

Chrissy Kay
So if you have someone who’s Smith Manoeuvre experienced, you really get those nuanced details, and you get the right answers to all your questions.

Robinson
That’s right. And I know there have been many instances where Keaton has lost business because he said: “you know what? What you can get right now—what you’re looking at—that’s the one to go with.” So we look out for the best interests of the clients, and it’s not like we’re just trying to slam mortgages through the door. It’s about servicing Canadian homeowners so that they have this opportunity to increase their financial security, the most effective way possible. And if that means losing out on a mortgage, you know, a broker like Keaton is happy to do it if it’s in the best interest of the client.

Chrissy Kay
That’s great. Just to go back into the question, there was one in the middle: “does it have two rates or just one rate as far a readvancable mortgage?” I’m assuming “Another Loonie” is wondering: “does the HELOC have one rate and then the mortgage portion have one rate?”

Keaton
Yes. So the the amortized mortgage rate is typically lower. The HELOC rate is typically prime-plus-0.5 type rate. So it’d be based on prime, whereas a mortgage rate will be potentially a fixed product or variable product. But yes, there are two different rates and to different payments.

Chrissy Kay
Okay. And then the next question that “Another Loonie” asked is: “what happens at the end of your mortgage term if you have a readvancable mortgage? Is it possible to switch to a different lender? Would you need to sell your investments to switch?”

Keaton
At the end of your term, you can move to another lender. But this is where it’s important to make sure that you work with the right people. If I have a client who’s in the middle of the Smith Manoeuvre and they’re changing lenders, and they have deductible debt, I always always always want to make sure they work with a lawyer who is knowledgeable about the Smith Manoeuvre. Ideally an SMCP, because there’s a certain order of operations to do this in a correct way—and I’m sure Rob can touch on this a little bit as well—but you can do it wrong.

Robinson
Yeah, sorry, you just woke me up there… It is important to do it right. Now, there’s a difference between, you know, if you’re just switching lenders, and you’re still living in the same house, and all you’re doing is having the line of credit component on the new mortgage, the new readvancable with a different lender pay out a line of credit balance on the old mortgage, still, it has to be done right, you have to know what you’re doing. But it gets a little more complicated if you’re selling your home and moving into a different one. And this again, is where you need people who know what they’re doing. And particularly notaries or real estate lawyers, because there is, like Keaton said, an order of events. But it is possible to transfer the deductible debt you’ve generated on the house that you’re currently selling, on to the house that you’re now going to be buying. It just needs to be done properly.

Chrissy Kay
And you don’t have to sell your investments even if you switch lenders.

Robinson
No.

Chrissy Kay
All right. Another question from “Another Loonie” is: “what are your thoughts on using your HELOC to invest, like once every few years, you pull out some amount of money to put it in the markets? What are the advantages and disadvantages of this when compared to the Smith Manoeuvre?”

Robinson
You know, there’s a lot of discussion on dollar cost averaging. Most of it is for DCA and some of it against for various reasons. But we’ve got to consider the fact that if I start the Smith Manoeuvre process, and it turns out, I have $1,000 to invest on a monthly basis from January to December, I’m investing 1000 bucks a month. If I’m waiting a year, before I pull that money out, then there’s 11.9 months that I’m not invested. So I’m missing out on that compound growth. So in December, now I have 12,000 that I’m going to pull out one lump sum and I’m going to invest it. So you’re investing one large chunk of money at one period of time, and the markets are either going to be up or down at that point. So with the Smith Manoeuvre, you’re putting a smaller amount aside sooner, 1000 bucks a month, you’re dollar cost averaging in, and you’re also generating tax deductions starting month #1, rather than waiting to generate tax deductions at the end of the year. Or five years. Or however long you decide to wait. So it eliminates trying to time the market. And it takes more advantage of compound growth by doing it little chunks at a time on a monthly basis.

Chrissy Kay
And from what I see, when you just pull out of your HELOC to invest, that’s just leveraged investing. Whereas if you pay down your mortgage and it readvances into your HELOC, and then you pull it to invest, then that is the Smith Manoeuvre .

Robinson
Yeah, there’s a big distinction here. The Smith Manoeuvre makes equity available as fast as you’re paying it down. Right? So as fast as you’re paying down your bad debt, you can borrow back to invest. So your debt isn’t changing. If I’ve got a clear title house and I go slap a HELOC on it and pull money out to invest, that is just simply leveraged investing: I’m increasing my debt. With the Smith Manoeuvre, we’re not increasing our debt: we already leveraged when we bought the house. That’s when we leveraged. Now we’re just converting the debt. But the way that I read the question was, you know: “do I build up available credit for a year, or every few years, and then pull that big chunk out and put it in the market via the Smith Manoeuvre? Like, just instead of pulling it out like I could, once a month, I wait and let that available credit grow? Or do I do it once a month, as the program is designed?”

Chrissy Kay
Alright. we’ll move on to the next question. Another one from “Another Loonie”: “what’s your opinion on using your home equity to purchase rental properties, instead of investing in the stock market?”

Robinson
My opinion doesn’t really matter much. You know, in the end, it doesn’t. I used to be an investment advisor, I used to be licensed, I gave that all up when I sold my business in order to write the book and get out to the masses here. I stay away from providing investment advice, whether it be in securities, mutual funds, stocks, ETFs, anything like that, or even investment properties. That is the arena of you know, the Smith Manoeuvre Certified Professional Investment Advisors, right? And other types of professionals who take a look at who you are. What do you understand? what do you feel comfortable with? Where are you in terms of your life? Are you married? Are you single? How old are you? there’s tons to go through when we talk about knowing your client, the KYC rule in the investment world. So me providing any advice to someone who all I know is their Twitter handle? You know, I stay away from that. And even from my own personal point of view, you know, I can say: “you know what, I personally, I’m not talking about you now, but personally, I’m going to invest in real estate all day long, rather than the stock market.” Well, I don’t know if, even though I’m protecting myself, I don’t know if you’re up the street from me living in the same market environment, or if you’re in Newfoundland, living in a completely different environment. Right? So it’s all about investing what you know about, investing in what you’re comfortable investing, once you have a conversation, who can help guide you and make sure you’re on the right path for the goals you want to achieve. And Keaton may have a different answer. I mean, of course, he’s gonna say invest in real estate, I’ll sign you up another mortgage, right?

Keaton
Not necessarily. Rental deals get trickier and trickier. They can be the bane of our existence. But I think it’s an option worth considering. That’s my answer: is this an option?

Robinson
Yeah, it is an option. And we have to remember as well, like, we all know about diversification and someone who’s brand new to investing. So maybe they don’t have anything invested in the markets at all, but they own their own home. Well, they’re already invested in real estate. Right? So now maybe it’s time to diversify. And once they build up a significant portfolio of securities, some smart, maybe, at that point, go into rental properties. There’s a whole bunch of different answers to this question.

Chrissy Kay
That’s a tricky one. Very personal.

Robinson
Yeah.

Chrissy Kay
OK. So the final question from “Another Loonie” is: “is there any size of mortgage that makes the Smith Manoeuvre not worth it? For example, if you had a million dollar mortgage.”

Keaton
If you go upwards? Generally not: the bigger the mortgage, the more the potential of the Smith Manoeuvre. I personally, at least as a broker—maybe it’s just me being lazy—but if you’ve got a $25,000 mortgage, is it worth going through the effort of setting all this up? Yeah, maybe—maybe not. Rob probably has a different opinion. But from my end, is it worth the eight hours of your life to set it all up? Maybe not. But generally speaking, no, there’s the size doesn’t really matter.

Robinson
I guess it would depend, Keaton, on if there’s any dollar value, where lenders would no longer extend a readvanceable: $30 million mortgage?

Keaton
I’m sure if you had a monster of a house.

Robinson
Yeah.

Keaton
But for regular Canadians.

Chrissy Kay
OK, that’s a good answer.

Robinson
All right. Point taken.

Money Mechanic
Moving right along. I’ve read this question over a couple times. I’m just curious what your response is going to be. It’s from “FI Squirrel“, and that’s the Twitter handle (thanks for sending that in). And they asked: “what is the best way to optimize fixed portion versus line of credit portion of mortgage in order to take advantage of today’s low fixed rates?”

Keaton
This is a really, really loaded question, believe it or not.

Money Mechanic
OK.

Keaton
Now, there’s a trick called the “Fraser Finagle”, which is in the book, and it talks about locking in line of credit portions into amortized mortgages to get a lower rate.

Money Mechanic
Yes.

Keaton
Now, you can do that with variable products. And as long as you’ve had the discussion with your accountant, and you’ve gone through all the steps, it’s a pretty simple open and closed decision about… your cash flow monthly is going to change, the interest you pay is gonna change, and you’re gonna start paying off the debt. But this question reads: “today’s low fixed rates”, and people need to realize that as mortgage rates go down, penalties to break mortgages go up significantly. So there’s much more to this question with whoever the asking in a sense of: “is there any—and I mean any—chance that you would pay off this mortgage, or break it during the term?” Because hypothetically, if you did this, say on $200,000, and you go great, you know, I’ve got a 1.9 fixed rate. But all of a sudden, you pay off this mortgage, you’ve triggered a $28,000 penalty. It was the worst decision you’re ever going to make, compared to the interest savings of just not having done it. So when people do this, I typically lean towards going the variable route, because then it’s a three months interest penalty. And if you have to exit the strategy for whatever reason, or pay that mortgage off, the cost of doing so is very minimal. Whereas if you go with a fixed product, you can really, really do some damage.

Money Mechanic
Great answer.

Robinson
Yeah. So again, it’s personal situation, you know, you got to speak to someone say, this is where I’m at in life. These are the potentialities, you know: what’s best for me?

Money Mechanic
As with everything in personal finance, it’s personal, and the best answer is: “it depends.” Alright, one last one here, Chrissy?

Chrissy Kay
Yep, this is from “Family Money Saver” on Twitter. And they asked: “What is the worst case scenario with the Smith Manoeuvre? That is what can go wrong?”

Money Mechanic
COVID. <<laughter>>

Robinson
Well, we’re getting invested. You know, if I have a mortgage, and I’m not converting it, I’m not getting invested, then I have zero market risk. But with a Smith Manoeuvre, we’re getting invested, whatever that market may be. Again: securities, real estate, etc. Markets go up, markets go down, we know that very well. And if we accept that upon implementing the Smith Manoeuvre, the fact that this is a very, very, very long term strategy really flattens out that market risk curve: we’re going to see highs, we’re going to see lows and back again. But someone needs to be ready to invest in the market, or, you know, maybe hopefully, they have been invested for a while. And they understand that. But markets will go up, markets will go down. And it’s the same with rates. You know, Keaton will be able to speak to that—to rate risk— a little better than I, but if I’m not doing the Smith Manoeuvre, I just have this amortizing loan that I’m paying off over time, I’ve got rate risk in the fact that there’s a rate on it. And, you know, that can be mitigated—fixed versus variable—again, that’s for Keaton to talk about. But now when we’re implementing the Smith Manoeuvre, we’ve got a rate on that nondeductible amortizing side. We also have a rate on that line of credit side. And that’s traditionally a variable. And so that’s going to float with whatever happens in the economy. So we’ve got rate risk with the Smith Manoeuvre, but again, because this is such a long strategy, long term strategy, that risk curve gets flattened out. We have to remember too that my father developed a strategy back in the mid 80s, when interest rates were in double digits, right? 12%, 13%, 14%. And if the strategy didn’t work with those rates, it wouldn’t be around today, but it trundled on and push right through, and it was beneficial for clients. There’s a number of reasons for that, why it can still be positive net benefit with high rates. I won’t go into that. But anyways, yes: rate rate risk. Poor investment decisions: this is what I’ve seen a lot. People decide that they can handle the investment component themselves, and they end up blowing themselves up. It happens. And no matter how much, how many, times you tell someone, you’re not a dentist, don’t pull your teeth. Well, they understand that. You’re not a doctor, don’t pull out your own appendix. Well, they understand that. You’re not an investment advisor, don’t invest by yourself, I can do it. I can do it. Right? That’s a big one. That’s what goes wrong a lot of time. And another big one is lack of diligence. The Smith Manoeuvre requires on a monthly basis—just like you go online to pay your credit card, just like you go online to pay your phone bill—go online to do your mortgage transactions for the Smith Manoeuvre. But sometimes, you know, people fall off because the Smith Manoeuvre is not exciting. It’s boring, right? It’s long term wealth accumulation. But you got to make those transactions on a monthly basis. So you got to stick to it on a monthly basis. And also over the long term. This requires stick-to-it-iveness. It’s not making millions of bucks at the drop of a hat with a spin of the roulette table in Vegas or something like this. This is a long term program. So commit to it and stick to it. And that’s when we see the results.

Chrissy Kay
Just like any investing.

Robinson
Yeah.

Chrissy Kay
It’s long term.

Keaton
Slow is steady, steady is fast.

Chrissy Kay
So can I throw a scenario in there? Because we’re in COVID times? What happens if someone loses their job and can no longer make the payments on their mortgage? Whether it’s a Smith Manoeuvre mortgage. What happens then? That sounds to me like one of the worst case scenarios that you could imagine?

Robinson
Firstly, I’ll let Keaton answer this, but we have to remember that whether you’re doing the Smith Manoeuvre or not, you’re not coming out of pocket with any additional cash. Because it’s the regular mortgage payment, the increasing efficiency of the regular mortgage payment, which is servicing the increasing interest expense on that line of credit that you start borrowing from. So it also doesn’t need investment income to service the interest. So it might be a little more complicated than for today, but But in any event, if you’re doing the Smith Manoeuvre or not, if you don’t make your mortgage payment, you know, Keaton will be able to tell us what happens there, but with the Smith Manoeuvre, don’t forget that it’s not like you’re having to come out of pocket with more money each month than if you weren’t.

Chrissy Kay
Yes, you’re right.

Robinson
So Keaton, over to you.

Keaton
So, it would depend on: “is it a short term issue, or a long term issue?” As I think everyone knows, now, mortgage deferrals are a thing. Interesting thing is the deferral program is not new. COVID did not lead to the creation of this, this has been around for quite a while as part of CMHC’s program to minimize defaults. But the biggest thing to remember is that if you reach out to your bank and say: “I am in trouble, I need help.” They will help you. If you miss two or three payments, and then you say: “I am in trouble, I need help.” They will not help you. So it’s a big part of it is if you do find yourself in financial duress, you can drag things out of a long time. Interest only is an option on your amortized portion. The banks can reamortize your mortgage. There are lots of solutions available if you’re proactive and you realize: “I might be starting to get into trouble financially because maybe I’ve lost my job.” And the sooner you reach out and start asking for help, the more help people get.

Chrissy Kay
That’s great to know. I didn’t realize that this was not a new thing, to be able to ask for help from the banks and get some support that way.

Money Mechanic
Well, luckily Chrissy all our listeners have an emergency fund and they wouldn’t be in a situation, right? Yeah. What an awesome show. Thank you, gentlemen, both for coming on. Please, as we close up here, Robinson, why don’t you start us off and let our listeners know where they can get ahold of you and where they can learn more.

Robinson
www.smithman.net is the website we decided to not call it SmithManoeuvre.net

Money Mechanic
Nobody can spell “Manoeuvre”…

Robinson
Nobody including me. So it’s www.smithman.net. The email to reach me at is info@smithman.net. Go peruse the site. We’re not just selling a book, a calculator or a home or of course there. We’ve also got FAQs, a whole bunch of media interviews, including the past Explore FI interview that I did with you folks. So there’s a media page, listen up, there’s more information, and decide if it’s something that you want to pursue. And you don’t have to buy the book and go to the library and check it out. If you want to save yourself 25 bucks, but get the information, acquire the knowledge. Reach out. There’s people to guide and assist no matter where you are in the country. And we’ll take it from there.

Money Mechanic
Fantastic. Keaton, how can our listeners find you if they’re interested?

Keaton
The best route would be to go to Rob’s website and reach out to Rob and then he will direct you out my way. But if you do want to learn more about my business partner now you can find us at www.kbmortgages.ca.

Robinson
Yeah, and if you do reach out to info@smithman.net because you’re looking for Keaton, please say that you are looking for Keaton, that you heard about him on this podcast.

Money Mechanic
Perfect. Well, Chrissy, did you learn something?

Chrissy Kay
I learned a lot. There’s a lot to learn.

Money Mechanic
I did too. I thought we knew some stuff about the Smith Manoeuvre. But it turns out there’s more.

Robinson
You know what, I’m learning new stuff every day too. Especially talking to bright guys like Keaton. I’ll tell you what.

Money Mechanic
Fantastic.

Keaton
The interesting thing about our industry is it just keeps changing.

Chrissy Kay
Keeps you on your toes.

Money Mechanic
Excellent. Well, we’ll catch you listeners next time on another episode of Explore FI Canada. Thanks for joining us today. Thanks a lot, Keaton and Robinson.

Chrissy Kay
Thank you.

Robinson
It’s been a pleasure.

Keaton
Cheers, guys.

Show outro

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