Debt Free In 30

Over the years I have had hundreds of clients who financed a house, or a car that ended up being more expensive than they could afford, and that one purchase caused other debt problems. When I ask them why they made that purchase, even though in hindsight it was obviously more than they could afford, they give me many rational reasons. They tell me the mortgage payments were cheaper than rent, or they financed a new car covered by a warranty to avoid car repair costs. Humans Can Be Irrational Those are rational reasons, but when I ask more questions it becomes apparent that they bought the house for emotional, not rational reasons. They were afraid house prices would keep going up, so they bought now, or all of their friends were buying, so they did too. On today's show I discuss how our emotions can cause us to make bad financial decisions, even when we don't realize we are being influenced by our emotions.

Student loan debt is a massive problem in Canada.  The average student loan debt resulting from a four year degree program is over $26,000, and a student could end up paying more than $10,000 in interest before the loan is repaid. A government guaranteed student loan is only discharged in a bankruptcy if you have ceased to be a student for over seven years at the time you file bankruptcy. So it is very sad that 15% of our clients still have student loans at the time they file with us, meaning they've been trying to pay that back for seven years already. Even worse, the burden of student loans are disproportionately felt by women. On today’s show we discuss the problem, and propose some solutions for both society and individual students.

Welcome to the first show of Debt Free in 30 Season #4. I know this isn't a TV show, and you're not supposed to have "seasons" on a podcast, but I think seasons are a good way to organize what we do here on Debt Free in 30. As I discuss on today's shorter-than-usual show, we will continue to have great guests discussing personal finance and debt issues. But this season I also plan to delve deeper into the debt issues that impact society. Next week we'll discuss whether or not student loan debt is sustainable, and I'll give my thoughts on possible solutions. We have many great shows planned, so welcome to Season #4.

The book is called Straight Talk on Your Money – The Biggest Financial Myths and Mistakes…and How to Avoid Them. I wrote the book because based on my 30 years as a professional accountant, and after personally meeting with over 10,000 people, I believe there is not enough straight talk about money.  There are lots of sales pitches, but that’s not what we need. On today’s show I explain why I wrote the book, how you can get a copy, and why I think all experts are biased, and how you can make better financial decisions. Full details at www.StraightTalkMoney.ca  

For our final rebroadcast of the summer, we are rebroadcasting our most downloaded show from the past year.  Sean Cooper returns to the podcast today to talk about his new book, Burn Your Mortgage, to be published on March 1, 2017.  Sean worked up to 80 hours a week for many years to save for a down payment, and then he managed to pay off his mortgage in less than four years.  He held a mortgage burning party that was covered by the CBC, and that's where the fun began.   Some people applauded his frugal lifestyle, but others said that it's not realistic to work that hard just to pay off a mortgage quicker, earning him a lot of online haters, which is where I got involved in the story when I was interviewed by the CBC in a follow up article. I believe that some of Sean's strategies will work for some people; the key is to listen to his ideas and apply what you are able to do, given your financial situation.  As Sean Cooper says, the starting point is: “Setting a goal, because for so many people what keeps them

This is a special rebroadcast of one of our most downloaded shows: it’s my father-in-law, telling me how he retired at age 48, and has now been retired for longer than he worked at his job!  If you are like most Canadians, you dream of a long and enjoyable retirement. Is it possible to retire early and achieve that by the age of 48?  While it is an anomaly, my guest today did just that. Bob Lassaline worked for 30 years and retired when he was 48 years old. He is 80 years old today, so he has been officially retired for longer than he was employed. How did he do it? Full details are in the podcast.

As we continue to rebroadcast our top downloaded shows this summer, today we replay our first ever Debt Free in 30 broadcast LIVE on video, over YouTube.  The response was fantastic. We asked our listeners to leave us questions through sound clips, email, twitter and Facebook in advance of the show and took questions during the show.  Doug Hoyes and Ted Michalos answered as many of those questions as we could during the webcast. We talked about debt, consumer proposals, car loans and mortgages.  We even had a “celebrity” question. The full video is also available on the Hoyes Michalos YouTube Channel.

When this show first aired back at the end of November, 2016, the real estate markets were booming, and mortgages were easy to get, but my guest, Ben Rabidoux, had some very specific predictions. First, he predicted that Ontario would implement a foreign buyers tax, just like happened in Vancouver.  Bingo.  In April of this year, five months after we aired this interview, the Ontario government announced a 15% tax on foreign real estate buyers. Second, he also predicted that mortgages would be more difficult to get in 2017.  Right again, as the problems at Home Capital, one of the biggest alternative mortgage lenders in Canada made it a lot more difficult for some buyers to get a mortgage. So Ben was correct on these predictions, and a few others, so I’m not surprised with that track record that this was one of our most downloaded episodes.

Today’s show is a rebroadcast of a show that first aired in October, 2016. My guest is David Bond, who has a PhD in Economics from Yale University, and he makes a number of interesting points.  We discuss the high level of Canadian household debt, and we talk about the most popular topic here on the podcast in the last year, and that’s the Canadian real estate market.  Mr. Bond has some very definitive views on income inequality and taxation, and he has some thoughts on Basic Income. Mr. Bond  points out that we must face the fact that we live in an economy that has cycles. A high household debt to income ratio (167.8% at the time of our podcast) puts both the individual, and our economy as a whole, at risk. If you lose your job, you may not be able to pay your debts. If too many people default on their debts, our financial institutions might go bankrupt. Tune in for Mr. Bond’s David's advice if you have debt and risk a job loss or income reduction.

We just celebrated Canada's 150th birthday and this is Debt Free in 30 episode number 150 so to celebrate both of these milestones I'm bringing back a guest from one of our most popular shows ever. Back in season number one, show number 33, originally broadcast in April of 2015, my guest was Leigh Taylor and the topic of that show was smart ways to pay off debt. Even though that show aired more than two years ago it is still downloaded many times each month and as of today it is one of the top three downloaded shows in the history of this podcast. That tells me that Leigh was a great guest because that show has been shared many times by our listeners. So today, two years later, I'm bringing Leigh back for round number two. Today I want to ask Leigh about debt and bankruptcy myths. We get a lot of information from the internet and that information is not always accurate so today we're going to dispel the top debt myths that Leigh and I encounter as we help people with their debts. On today’s show Leigh Taylor

This is a special rebroadcast of show #111, originally aired on October 15, 2016. We all want to help when someone is in trouble. But helping someone out of financial trouble can come with unexpected costs and consequences. It is for that reason that I strongly advise against ever loaning money to family and friends. On today's show we hear three stories: Mabel is a widow who chose to help her adult son who was struggling financially after a divorce. In the end, Mabel ended up maxing out her own line of credit and was having trouble keeping up with her own rent and debt payments. Larry loaned his son money for a down payment on a new home. Unfortunately, Larry's son separated from his wife who received the house as part of the separation agreement.  Larry's down payment went to his son's ex-spouse. Amanda's parents gave her the 5% down payment she needed to enter the housing market. Unfortunately Amanda quickly found out she couldn't keep up with the bills associated with her new house. Maintenance, a job lo

There's a growing number of people owing money on their tax debts. This is in part because more people are self-employed, or have more than one job, and partly due to a growing seniors population. Getting into tax debt can be relatively easy, and dangerous to your financial health if you don't deal with it quickly. Today's podcast discusses ten tips on dealing with the Canada Revenue Agency and tax debts from our in-house tax expert and Licensed Insolvency Trustee Ian Martin. Your income tax is based on your total income for the year. If you're working for a company, that process is automated for you and the appropriate amount is taken off. But what if you have more than one job and one doesn't know about the other? What if you have pensions coming from different locations? These tips deal with how to avoid complications with the CRA, as well as what you can do to deal with those tax debts.

Debt doesn't start out as an obvious problem. For many people, lack of personal finance knowledge leads them to make poor decisions with their money. Once you figure out how easy it is to get credit, you start spending more and more because, hey, it's there. Today's guest is a former Hoyes Michalos client, and like many of our clients, he struggled with severe debt. Beau started gambling at a young age through seemingly harmless games like scratch tickets. From there, it evolved to online card games throughout university and he eventually dabbled in "pretty much everything else you can think of". Beau had a full-time job so for him, gambling wasn't a means to earn income, it was his source for exhilaration.  The main problem that Beau had was that credit was the only way he knew how to have that instant access to cash to gamble. I'm just kind of at my wit's end and I'm thinking, you know, I'm never going to be able to afford these credit card payments that I have if I keep going. After working with a counsell

As Licensed Insolvency Trustees, our clients tell us how difficult it is to live on minimum wage.  That’s why they often have no choice but to use debt to survive.  The average person we help file a consumer proposal or bankruptcy has an income that is almost 40% less than the median income in Ontario; in many cases our clients are working minimum wage jobs. Our clients don’t have a debt problem; they have an income problem. If minimum wage isn’t enough to survive, the solution would appear to be quite simple: raise the minimum wage.  That’s exactly what the Ontario government is proposing to do, raising the general minimum wage from $11.40 per hour to $15 per hour on January 1, 2019. So won’t that big increase in the minimum wage solve all of our problems? No, because, unfortunately, a minimum wage is not a living wage. On today’s show we explore the reasons why a government-mandated minimum wage is likely to do more harm than good, and we propose a more effective solution to our income problem.

We know from our Joe Debtor study that the average person in Ontario who files a consumer proposal or bankruptcy has an income that is almost 40% lower than the median income in Ontario. Low or sporadic incomes make it difficult to keep up with the cost of living. The Ontario government has recognized this fact and has started a pilot project for basic income in three cities across the province. Hamilton is one of those cities, and with me today is Tom Cooper, Director of the Hamilton Roundtable for Poverty Reduction, to discuss how this pilot project may help alleviate poverty in Hamilton. This basic income pilot project is an initiative to reduce poverty in our province and provide people with a basic standard of living. Many existing benefits are not enough for people to pay rent, food, and transportation costs. As a result, more people turn to debt to make ends meet as noted in our 2017 Joe Debtor study. On today’s show we discuss basic income and a living wage as a way to increase incomes in Ontario.

The number of seniors filing insolvency is growing. Many seniors have the honest intention of paying back whatever debt they accumulate. That would be great, except they're using new debt to pay for it. We've recently written about seniors increasingly turning to payday loans, which is one of the most expensive forms of lending. High interest rates paired with a fixed income aren't a good combination for anyone. The challenge that seniors are seeing is not that they are incapable of living off of their savings and pension payments.  Why are insolvency rates for seniors increasing? What can seniors do to avoid insolvency? Those questions and more answered on today’s edition of Debt Free in 30.

For the first time ever, the federal government just issued a BOMBSHELL report, saying that it appears that two very large debt consulting firms in Canada are taking advantage of vulnerable consumers.  They charge large upfront fees, and often they only service they provide is to refer you to a Licensed Insolvency Trustee. On today’s show we discuss what the government reports says about unlicensed debt consultants, and we provide practical advice for consumers on how to avoid paying for a service that you don’t need.

As you may remember, we published our Joe Debtor study at the end of March 2017. This study takes place every two years and analyzes data from insolvent debtors from across Ontario. When it comes to homeowners, we're seeing a steady decline in the rate they're filing insolvency. That doesn't mean they're without debt, it just means they're getting creative with how they hold off insolvency. Although only 17% of all insolvent debtors in our 2017 study were homeowners, roughly 30% of people who call into our offices are homeowners looking for help dealing with their debt. Because home values are so high right now, it may make more sense for the caller to pull from their home equity to help pay off their existing debt, or even sell their home to pay off their debts in full. Full details on how to avoid excessive mortgage debt on today’s show.

There are two major purchases we make in our life that we typically use debt to purchase. The first (no surprise here) is our home, and the second is our car. But can car loans lead to insolvency? Believe it or not, yes car loans can lead to insolvency. As cars are getting more sophisticated and fitted with new gadgets and features, which means they're also getting more expensive. You're no longer buying just a car, you're buying a driving computer. Instead of the days where we could just pay cash up front for our vehicle, we're presented with loans and leases as a way to stretch the total amount over a number of years. In some cases, car loans extend up to eight years. This makes cars more affordable for the every day consumer, which is great for car companies as they're able to continue with the technological evolution of their cars. But, they can get expensive, so on today’s show Doug Hoyes explains why we get into debt with cars, and he gives practical advice for dealing with car loan debt.

Welcome to the third round table edition of Debt Free in 30, recorded in person at the Hoyes Michalos offices in downtown Toronto, so you can listen to the audio, or watch the video on YouTube. My guests today are all personal finance experts based in Ontario. Kerry K. Taylor writes the very popular Squawkfox blog; Robert Brown wrote the best selling personal finance book Wealthing Like Rabbits; and Barry Choi writes on the Money We Have blog about personal finance and travel. Today we cover three stories in the news: Banks behaving badly – starts at 4:01 Social Media Influencers – who can you trust? – starts at 15:52 The Toronto Real Estate Market – starts at 30:43 (where I predict that prices peaked on Wednesday April 26, 2017)