1. Preet gives us a credit card payoff calculator. Hopefully this will inspire people to pay off their high-interest debt and not cause them to give up because it will take too long.
A colleague I’ll call Andy came up against a curious barrier to deducting mortgage interest on a rental property. Canada Revenue Agency (CRA) likes to see a straight line between the mortgage lump sum and the purchase of the property that will generate rental income. Unfortunately, it seems that Andy cannot easily draw a line that would satisfy CRA. Andy owns a small home free and clear. He plans to move to a new larger home soon. He had hoped to rent out his old home to make some rental income. His plan had been to take out a mortgage on the old home and use this money to reduce the size of the mortgage on his new home. A side benefit Andy hoped for was using the interest on the mortgage on the old house once it becomes a rental property as a deduction against the rental income. Unfortunately, CRA won’t allow this. From CRA’s point of view, the borrowed money wouldn’t be used to purchase an investment, but would be used to buy Andy’s new home. The following Q and A on page...
Many aspects of personal finance have changed in the 36 years since The Wealthy Barber classic book first appeared. To update it, author David Chilton had to not only do an extensive rewrite, but he had to come up with new advice. He did a great job of making The Wealthy Barber 2025 update fully relevant to Canadians today. Chilton takes important topics that are usually dry and hard to understand and brings them alive in an entertaining story format. But this book is much more than just a fun take on personal finances; the advice is excellent. Chilton gives insights you won’t find elsewhere. The book is like a course on personal finance requiring no previous knowledge, and even discussions of insurance and wills are funny and compelling enough to be page-turners. The bulk of the book is a set of financial lessons mainly aimed at Canadians between 20 and 45. The early chapters introduce the characters, make it clear that the lessons require no ...
Common advice about controlling spending is to track all your purchases and add them up each week or month. I believe that this is effective, but have been fuzzy on why it seems to work so well. Why can’t people just spend less without the constant reminder of how well they are doing? I got some insight on this question from, of all places, poker. For poker players there is a certain thrill to dragging in a pot of chips. The thrill is there whether it is a $1 pot or a $10 pot. The $10 pot gives a bigger thrill, but not 10 times bigger. Similarly, losing a $10 pot feels worse than losing a $1 pot, but not 10 times worse. This leads to some players playing in such a way that they maximize happiness by taking in many small pots, but losing some big ones. As long as they don’t count their dwindling chips, they can actually be happy playing this way. Counting your chips is a lot like adding up your spending at the end of the month to see what happened. You may feel good about ...
Thanks for the mention, have a superior fin de semaine.
ReplyDeleteCC: Thanks for including me in your list. I almost didn't recognize your picture -- you're almost always smiling in person :-)
ReplyDeleteThicken: Thanks for the vote. I count your blog among the more thoughtful and useful blogs as well.
Thanks for the link Michael and congrats on the G&M coverage!
ReplyDeleteCongrats on the Globe and Mail mention.
ReplyDeleteI'll be reading that book as well.
Thanks for the link Michael - you got my vote in the poll. Have a great weekend!
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