Canadian Personal Finance Blog

Archive for January 26th, 2007

Well our amigo over at the Canadian Capitalist mentioned in his Friday update that the Star has an article about the “infamous” Smith Manoeuvre which talks about Frasier Smith’s method for getting the interest on your Mortgage tax deductible. If you remember I talked about this “risky” trick a while back here.

This is a risky game to play, since it assumes you can invest intelligently enough to not lose your stake, so be careful, and I am NOT recommending this strategy either.

A good quote from the Star Article articulates some valid concerns.

David Trahair, a Toronto chartered accountant, wrote a book urging Canadians not to invest in RRSPs before paying off mortgages and other non-deductible debt. He disapproves of swapping one loan for another.

“I recommend the total opposite, paying off your principal residence and not borrowing against it,” he says.

“It’s a high-risk strategy because you’re betting the farm that some investment adviser can do better than you can. You have a guaranteed return from getting rid of the mortgage.”

That is the code phrase a friend of ours has for when she goes to the Salvation Army thrift store to buy clothes, “I’ve been shopping at the boutique”. Why do folks like me shop at the thrift stores that seem to be opening all over the place? Because we are cheap? I can’t afford to shop at the Gap every time? I think the answer is YES to all and a few other reasons too.

If you have four kids (and three of them daughters) keeping them in new clothing could easily bankrupt us (if our kids were insane clothes horses like the ones on MTV, luckily they aren’t). They are growing and active kids and a lot of times clothes are grown out of or ripped so quickly, I’d go insane if I’d bought them brand new.

My wife has made shopping at thrift stores almost a science, and her only comment to me was that you need to be very patient and know when new “deliveries” come in. My kids have not made too many complaints about wearing “used” clothes, in fact they are starting to go there themselves, which is a good thing. They also buy new clothes but mostly with gift money from their relatives.

Most of these thrift stores have a charity component to it, so that is a good thing as well. We typically dispose of our “lightly used” clothing in the Salvation Army red boxes or whoever is collecting at the time.

Somehow I got mentioned in the Festival of Under 30 Finance (given I am well over 30, I am impressed that they listen to an old codger” like me). It was my posting about using Quicktax and asking what financial tools you use.

Finally if you ever see me complaining about it isn’t cold enough in Ottawa, please feel free to leave a very rude comment. I can only say I thank my mechanic every morning this week for convincing me to put a block heater in my Honda! –C8j