Debt Free In 30

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.

This past season, I have talked extensively with industry experts about payday loan solutions and alternatives. When I asked my guests from show 83, Brian Dijkema and Rhys McKendry, and my guest from show 85, Jonathon Bishop about what they think would improve the payday loan industry, they had so much to say that I wasn't able to air everything in the original podcasts. Today, I am sharing their previously un-aired thoughts. Brian Dijkema and Rhy McKendry, experts from the Cardus think-tank, authored a study titled: "Banking on the Margins: Finding Ways to Build an Enabling Small Dollar Credit Market." They suggest that the solution to payday loans is for communities to pool their resources to provide financial products with the assistance of someone with financial expertise that can help them evaluate risk. Jonathon Bishop, a Research and Parliamentary Affairs Analyst with the Public Interest Advocacy Centre, suggests that the federal government repeal the usury law back to what it was before 2007. This

Today's show is a repeat broadcast of one of our most downloaded shows, with our guest Nicole Olsen, the Financial Literacy Program Director for Financial Fitness in Windsor and Sarnia, Ontario. Nicole shares 4 steps to save money at the grocery store (but it's her bonus tip on "unit pricing" that is a must listen).  Enjoy!  

Over the summer we will be airing rebroadcasts of our most downloaded shows.  Today's show features our most popular guest, and a mis-understood topic: Budgeting. It's a word that people either love or hate. We may get mixed reviews about the advice that I share on today's episode, but for many, budgeting is a waste of time. Budgeting takes discipline, it takes time and it takes some skill to use a budgeting spreadsheet or app. Because it's difficult, for some people it can actually have a negative impact on their finances. They lose motivation or interest, and eventually discouraged, stop paying attention to their finances all together. We are not advocating that people shouldn't manage their money, but we are suggesting that you need to find a solution that will work for you and your finances. It's very important to know where you're spending your money because if you don't know where it goes, you can't make adjustments to pay down debt and build your savings. Doug Hoyes is joined once again by money expert

Given today’s real estate market, it’s not surprising that the most popular podcast episodes of this year featured Hilliard MacBeth discussing his book, When The Bubble Bursts, Surviving the Canadian Real Estate Crash, and Ben Rabidoux sharing his thoughts on the Canadian real estate market. Clearly, listeners want to know if they should rent or if they should buy? While I am not a real estate expert, I want to help those who are trying to decide by comparing the different possible outcomes of renting vs buying. From our own Joe Debtor study, we know that home owners in high ratio mortgages are at an increased risk of becoming insolvent. The average insolvent home owner had a mortgage ratio of 90% and owed over $68,000 in unsecured debt. Why? Because most people focus on the mortgage payments and forget to pay attention to all the other costs associated with owning a home.

Generally, money problems and financial problems go hand in hand. In fact, 28% of our clients were separated or divorce when they filed for insolvency. And 19% cited marital or relationship breakdown as the main cause of their financial difficulties. To delve deeper into the relationship between divorce and bankruptcy law, Ted Michalos joins us today on Debt Free in 30. When a relationship starts to fail, the last thing anyone focuses on is taking care of money. In fact, spending often increases as a way to make things 'better' and both partners forget to pay attention to their debt. When the relationship falls apart, the debt that was incurred during the marriage will have to be dealt with.

Our guest on today’s podcast, Ben Rabidoux is the President of North Cove Advisors, a macro research firm that works with institutional investors like mutual fund companies, hedge funds, and pensions, providing a broad view of the economy at any time. Today he visits Debt Free in 30 to share his insights on the current status and future of the Canadian housing market (and it’s not pretty).

As our economy in Canada has evolved so has the nature of most people’s employment. Downsizing and outsourcing has become more prevalent, stable jobs have become more scarce, and more people are becoming self employed. While the freedom and potential for success are great, being self-employed brings it's own challenges when it comes to managing business debts. On this week's podcast I talk with Ian Martin, Scott Schaefer and Ted Michalos about the potential debt problems that entrepreneurs and self-employed persons might face and provide tips that can help you avoid these common small business mistakes when it comes to managing your finances. I also talk with our experts about how to deal with one of the most common business debts: tax debts owing to Canada Revenue Agency.

Payday loans are expensive. Lenders charge a ridiculously high interest rate and demand repayment in one balloon payment. Inevitably, this traps some payday loan borrowers into a debt cycle. As a result, the Ontario government is reviewing current payday loan legislation and it's considering changes. In today's show, Ted Michalos, my partner and co-founder, joins me to discuss some of the suggested changes, our own recommendations for the government, and which payday loan alternatives to consider before taking out one of these high interest loans. Conventional wisdom says the following about payday loans: the interest rate is too high, well above the maximum rate of 60% set out in the criminal code of Canada, and this causes a financial problem for payday loan users; people turn to payday loans because they have a low income, can't access traditional credit and need a payday loan to cover necessities like rent, utilities and groceries. I beg to differ with this wisdom. While the interest rate is certainly a

If you are struggling with debt, how do you know which debt relief option is right for you? Both consumer proposals and bankruptcies have similar benefits, but the length and cost are different. On today’s podcast Ted Michalos, compares various aspects of filing a consumer proposal vs bankruptcy.