Debt Free In 30

We have a crisis and it's called payday loans. At Hoyes Michalos we believe payday loans are a real problem because all too often they create a vicious cycle of debt. We also don't believe that recent efforts by the Ontario Government have been enough to deal with the hidden truth behind payday loans:  already indebted Ontarians are borrowing multiple payday loans, from multiple payday lenders at the same time, and this is contributing to a record rate of payday loan induced insolvencies. How we know this is because every two years we analyze data from actual insolvencies to find out why someone files insolvency.  We call this our Joe Debtor study.  Part of our study includes a detailed dig into payday loan use by Joe Debtor so that we can isolate the behaviour and profile of the average insolvent payday loan user. Our data points to four startling findings: 1 in 4 insolvent debtors had at least one payday loan at the time they filed a bankruptcy or consumer proposal. The average insolvent payday loan borrow

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 from being homeowners is they're not able to come up with that down payment." On today's show Sean Cooper t

Is it true that if you just ignore an old debt it will go away? Not exactly. There are a few misconceptions about the Ontario Limitations Act. This week's Technical Tidbits edition of Debt Free in 30 will help separate the fact from fiction. Let's start with what we know We all know that if you don't pay a debt, you will get collection calls and, perhaps, have your wages garnisheed. So yes you can ignore a debt, but it may lead to collection actions. Doing nothing isn't generally a good option. If you don't have a job, you don't need to worry about wage garnishments. But that doesn't mean that you can simply ignore a debt and have it go away. Full details on today's Technical Tidbits edition of Debt Free in 30.

Losing a job is very difficult. Whether you're a single adult or have a family that relies on your pay cheque, job loss can be devastating. The most important thing you can do for yourself, and for your finances, is to move past it. Today's guest provides practical steps to move ahead financially and put yourself in the best possible position. David Trahair is a Chartered Professional Accountant and author of several books. You may remember David from shows #25 and #90 where he discussed some of his previous books. His newest book Survive and Thrive, Move Ahead Financially After Losing Your Job, discusses job loss from all levels. Emotional, psychological, financial, and educational challenges that recently unemployed people face. CPA Canada sees a need for this book and has decided to finance it and give it away free. No cost to it, you just download a free PDF version of the book. Share it with whoever you think may need it.

Welcome to a special edition of Debt Free in 30. This week, instead of featuring one industry expert we're giving you four (including myself, of course). In today's show our panel of experts will answer questions on four recent issues within the personal finance realm. Each expert brings something different to the table, which gives us a well rounded view at these issues from all angles. Today's guests are Barton Goth, a Licensed Insolvency Trustee. Barton is joining us today from Edmonton, Alberta where he owns and operates his firm Goth & Company. We have personal finance expert Robert Brown, author of Wealthing Like Rabbits joining us from Ajax, Ontario. Lastly, we have my Hoyes Michalos co-founder Ted Michalos joining me here at our head office in Kitchener, Ontario. Today we discuss four stories in the news: Walmart vs. Visa CIBC Survey: Will Canadians Pay Down Their Debt in 2017? Bank of Canada Issues Warning to Consumers Paid Promotion and Financial Advice

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.

This is our last show before Donald Trump officially becomes the President of the United States of America. That’s a scary thought for many people. I have no opinion on whether he will be a great President or a great disaster – I’m a Canadian, so that’s not my worry. I am interested in how President Trump’s policies will impact Canada. Even the experts don’t know what will happen; how could they? None of them predicted that Trump would win the election, so the future is uncertain. We made some predictions on last week's podcast. My guess is that interest rates will increase, trade with the U.S. may become more difficult, and that may impact Canada. The prudent course of action is to reduce your debt now, so that you are protected from higher interest rates. Of greater interest to me, as an observer from Canada, is how Donald Trump used various tricks to convince Americans to vote for him. These tricks are the same tricks that advertisers use to get us to buy their products, so learning these tricks can help

Canadians have always had a strong relationship with our southern neighbours. We escape the winter, they explore new places, and we support each other's economy. We also partake in cross-border shopping. Americans hop the border with their strong dollar and purchase goods from Canada. Canadians cross over and grab great sales at major U.S. retailers, but depending on how we pay, we're racking up U.S. debts. Some of these purchases are made on our own Canadian credit cards, but some are made using U.S. store credit cards. Those who live closer to the border have an even stronger relationship with the U.S. Depending on their industry, some Canadians work in the U.S., but live in Canada. When the U.S. has a strong dollar, it makes sense for Canadians as their take home pay is higher than what they would make in Canada. This is great if the U.S. economy stays strong, but when it waivers, it's not so good. Today we discuss what happens with U.S. debts when you have financial problems in Canada, with my guest, Lice

2016 was a year we won't soon forget, and early indications are that 2017 will also be very eventful, so it's time to review the events of 2016 and make our predictions for 2017. Consumer debt reached record levels in 2016, and so did the Toronto real estate market.  As Ted Michalos says on today's show: There is no capacity to save, there's no capacity for anything to go wrong. It's just a dangerous scenario waiting to unfold. We discussed the trends that we see with our own clients. A lot of the people we meet are working multiple jobs, just trying to make ends meet. Jobs in Canada have increased in 2016, but the growth was in part-time positions. From November 2015 to November 2016 Canada added 214,000 part-time positions, but full-time jobs declined by 30,500. They're incurring more debt to make up the difference in the fact that their expenses have gone up but their income hasn’t kept pace. So, what can the average Canadian do to help keep themselves in the black? That’s what we discuss on today’s podcas

It’s the holiday season, so today we have no industry experts, and we won’t talk about numbers.  Instead, our focus is on real people with real financial problems. Money problems are nothing new.  In fact, back during the Great Depression, financial problems were rampant, and that’s when a song written in 1930 became very popular. Brother, Can You Spare a Dime tells the story of man who was building a dream, but the dream ended.  What happened?  That’s our story today on Debt Free in 30.

Our guest today is Georgia Graham, Programs Manager of WEST (Women's Enterprise Skills Training). Their mission is to improve the employability of women in Windsor-Essex County. WEST completed their own study which focused on identifying their community's financial needs, and whose results paralleled our own. The study Women's Financial Preparedness: Bridging the Divide in Windsor-Essex found that women were less knowledgeable than men when it came to financial products and financial indicators. WEST's Needs Assessment Study concluded that there were three main vulnerable groups within Windsor-Essex. These vulnerable groups of women struggle to not only become, but to maintain a moderate level of financial preparedness.

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