Debt Free In 30

My guest today is Michael Chong, the Member of Parliament for the federal riding of Wellington-Halton Hills, and an advocate for the privatization of the Canada Mortgage and Housing Corporation.  First, some background: As we have discussed on we've previous shows, the big banks are required to have mortgage insurance on all mortgages where the borrower has less than a 20% down payment, and the biggest mortgage insurer in Canada is CMHC. According to Michael Chong, while there are two private mortgage insurers in Canada (Genworth and Canada Guaranty), CMHC insures 80% of all insured mortgages in Canada, and they currently insure over $500 billion in mortgages.  That’s huge. Mr. Chong’s position is easy to understand: with mortgage insurance, it is almost impossible for a bank to lose money on a mortgage, so they have a strong incentive to lend as much money as possible to maximize their profits. 

It is understandable that when you are experiencing financial problems you don't want that information broadcast to your friends, family and co-workers. This is a concern raised by many potential clients which brings us to this week's technical podcast question: Who will find out if you filed a bankruptcy or consumer proposal in Canada?  We answer that question on today’s show. The real question however is will bankruptcy help you deal with your financial problems and should you feel embarrassed because you filed insolvency? As many as 15% of Canadians will file insolvency at some point in their life. Tune in for more on this week’s edition of Debt Free in 30.

There is a lot of chatter surrounding Canadian real estate, housing prices and mortgage rates.   Vancouver sales have started to drop but not in Ontario. Is there a housing bubble in Ontario? When will it burst?  Part of the answer might be in the next round of changes to Canada's mortgage rules. In today's podcast we talk about how this will affect your ability to obtain a new mortgage or refinance your existing mortgage. This week's guest is Ben Rabidoux, the founder of North Cove Advisors. They're a private research firm that advises big investors like pensions and mutual funds. Ben is predicting big changes in the mortgage and real estate markets in Ontario in 2017. What's changing? As you remember, show #110 focused on the new mortgage rules that came into play on October 17, 2016. These new rules put in place a stress test that would reduce the amount of mortgage a homeowner could qualify for if they were applying for an insured mortgage. This applied mainly to borrowers with a high-ratio mortgage (l

Does financial literacy belong in high schools? This question is surfacing more and more as Canadians dig themselves further into debt. Today's guest is Prakash Amarasooriya, a member of the Toronto Youth Cabinet who recently launched a petition urging the Ontario Ministry of Education to beef up their Grade 10 career studies course to include basic financial skills like budgeting. Within less than a month the petition was signed by nearly 900 supporters. What should be taught?  Will it have an impact? That’s today’s topic on Debt Free in 30.

Air Miles has been in the news a lot lately about their new points expiry policy. Maybe it's because of the media attention, but we have had a lot of potential clients ask what would happen to their Air Miles and other loyalty points if they file bankruptcy? Here is a short summary of what would happen under bankruptcy law: Section 67 of the Bankruptcy & Insolvency Act says that a bankrupt’s assets include “all property wherever situated at the date of the bankruptcy”. What that means is if you own it, it's property. While there are bankruptcy exemptions for things like an inexpensive car, household goods and a portion of your RRSP, there is no exemption for Air Miles or any loyalty programs. Confused?  We explain more in today’s podcast.

Everyone wants to end poverty.  The controversy begins when you start talking about how to solve the problem. One solution which has received a lot of media attention lately is the concept of basic income or guaranteed annual income. In Ontario, former senator Hugh Segal is due to release a report which will guide the Ontario government in developing a pilot project around basic income. To help us better understand the costs and consequences of a guaranteed income program, I talked with David McDonald, senior economist with the Canadian Centre for Policy Alternatives. The CCPA has released a detailed study on basic income called A Policymaker's Guide to Basic Income. We asked David to describe the concept of basic income: The idea is that cash transfers are a way that we can alleviate poverty and have other beneficial effects. And the idea of basic income is that you get a cash transfer that you didn’t have to apply for or the application for it is fairly minimal. On today’s show we explore the pros and cons

My guest today is Kerry Taylor.  Her website, Squawkfox,  was voted Canada’s best money blog by the Globe & Mail in 2010, and in 2014 Chatelaine said she was the "gold standard for personal finance blogging”. I’ve followed Kerry’s work for many years, so I was very interested to read her Globe & Mail article where she described her visit to Mogo Lounge, operated by Mogo, a new “sexy, fintech” lender. What Kelly discovered was today's new form of payday and alternative lender. No more ugly yellow stores, these new loan shops have a much more attractive approach. Nice looking locations that look more like lounges than payday loan outlets, they offer free water, an online app - and best of all a 3 minute signup process. In addition, they give you a free credit report, with your credit score. As we discuss on the show, Mogo markets themselves to people who feel like they are “getting screwed by the banks” (and those are the words on the packages of free condoms they hand out).  Their marketing pitch is si

We're living in very different times in terms of our economy. To help us explore this topic further I talked with economist David Bond about how the Canadian economy as a whole is impacted by household debt and the root causes of debt, including income inequality and our tax system. David is a PHD in economics from Yale University, but more than that he brings a broad perspective of someone who has worked as an academic, civil servant and in industry. 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 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 loss and a flooded basement resulted in her selling the home for less than she owed

On October 3, 2016 Finance Minister Bill Morneau announced big changes to Canada’s mortgage lending rules, designed to make it more difficult for high ratio borrowers to qualify for mortgages. It appears that both the government and industry professionals believe that the sky is falling. On today’s show Ted Michalos and Doug Hoyes discuss how the new rules will impact borrowers, lenders and more.  We also ask the important questions: Is it really necessary for the government to protect the big banks who earn huge profits from loan losses? Doesn’t this guarantee simply cause the big banks to lend more money on high ratio mortgages to heavily indebted consumers? Finally, we give our predictions on how these new rules will impact the real estate market (and it’s not pretty).

This is a common question, and changes to the law have changed the answer from what we would have advised a few years ago. The answer depends on: How much debt you have; and What type of debt you have. We explore the answer on today’s podcast.

Today’s podcast is the first ever podcast interview with Jonathan Chevreau and Mike Drak together, talking about their new book Victory Lap Retirement.  This is so exclusive an interview that the book won’t even be officially released until October 10, 2016 but it is available for pre-order at amazon.ca, and the Kindle version is available now. Jonathan was a guest back on Show #5 where we discussed his previous book, Findependence Day. Mike Drak created the concept of a Victory Lap as an alternative to retirement, and teamed up with Jonathan to write their new book. So what is a Victory Lap? You will have to read the book for a full description, but as Jonathan and Mike and I discussed the concept of retirement has changed significantly.  Our grandparents and parents had a good chance of working at the same company until aged 65, and then retiring with a full pension before dying at age 70. Today almost no-one works at the same company for their entire working life, and most employers no longer offer full p

For the first time 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.

In June 2016 Walmart Canada announced that they believe interchange fees charged by Visa are too high, so, starting with their three stores in Thunder Bay Ontario, they would no longer accept Visa cards at their stores in Canada.  As of September, 2016 Walmart has not implemented this policy outside of Thunder Bay, presumably so they can continue to negotiate with Visa for lower fees. On this edition of Debt Free in 30 we answer the question: what's the real reason that Walmart doesn't want to accept Visa credit cards at their stores? The answer is not as simple as "Visa's fees are too high".  Walmart is the largest retailer in the world, so with their bargaining power they are probably paying the lowest Visa fees of any retailer. They already have a cost advantage over every other retailer, so are high fees the true explanation for Walmart's "anti-Visa" stance? Tune in for the answer.

SPECIAL ANNOUNCEMENT: It's the start of Season #3 of Debt Free in 30, and I am excited to share that with our new season we have a new and improved format. For two seasons Debt Free in 30 was both a radio show and a podcast. To meet the time constraints of radio it had be an exact number of minutes. Not anymore!  Much to the disappoint of our radio station affiliates I’ve taken the show off the radio, and now it will be a podcast-only broadcast. That means that this season I can do shorter shows to answer one specific question, or longer shows where I’ve got a great guest and we can’t cover everything in 30 minutes.  Please subscribe, and stay tuned for a great season!

This is our final "best of" show of the summer, and it's a doozy: my interview with Hilliard Macbeth (you can find the original show notes on our is the Canadian real estate bubble about to burst page) is the most downloaded show of 2016. Why is a show on debt and real estate our most downloaded show?  I think it's because there are two opposite opinions: one group believes that real estate is the greatest investment ever, and another group believes it is over-valued.  Obviously Mr. Macbeth is of the view that it's over-valued, and the bubble will eventually burst.

As I said on this show, Robert Brown's book Wealthing Like Rabbits contains the best first chapter in any personal finance book I have ever read.  (If you haven't read the book, you should).  This show is a rebroadcast from earlier this year.  You can read the full show notes on our Change Your Debt Perspective page. Robert advises us to "visualize" our debt.  See it. Make it real.  By visualizing our debt we can make a plan to start paying it off.  

David Trahair is a CPA and prolific writer.  Today's show is a rebroadcast of his first appearance on Debt Free in 30, back in early 2015, where we talked about his book Crushing Debt: Why Canadians Should Drop Everything and Pay Off Debt. You can read the full show notes on our show notes page for Crushing Debt.  (David appeared again in 2016 on Show #90 where we discussed his latest book, A Procrastinator's Guide to Retirement). David's advice is very practical.  One of his most important bits of advice is to identify the big cash drains in your current budget, and work to eliminate those expenses. That should free up cash to help you pay off debt.

Today's show is a rebroadcast from Season #1.  It's one of our most down-loaded shows, because it answers a common question: Should I pay down my debt, or contribute to my RRSP?  The answer is not always obvious. We all know that investing in an RRSP generates a tax refund.  If you are in the 40% tax bracket, a $1,000 contribution to your RRSP generates a $400 tax refund.  (Of course I'm over-simplifying this example; your actual tax refund will depend on your marginal tax rate, and many other factors).  $400 sounds great, so why would I ever use that $1,000 to pay down debt?  Isn't the RRSP contribution always the best answer? No. As we discuss on the show, this is largely a math question.

Debt Free in 30 has broadcast 100 episodes over 2 seasons to thousands of listeners. In addition, I have interviewed many personal finance experts for their opinions on the debt issues that matter most to Canadians. To celebrate this milestone, I broke away from my usual format. No guests, no specific topics. Instead, I shared my top 30 tips to help you avoid unwanted debt. Many of these tips are based on the topics I've covered over the last 99 episodes, and tips that have helped my clients.