If you have read this far, and are starting to realize that The Smith Manoeuvre is not the title of Robert Ludlum's latest novel, do not despair. Sometimes, real-life is more interesting than fiction.
Today you are going to learn how to re-engineer the way you deal with your house mortgage. When you implement the strategy you are about to discover, it will cause the taxman to send you tax refund cheques, big ones, each year until you die at age 130. The tax refund cheques come every year, they are free, there is no tax on them and it is all perfectly legal.
These are not small tax refunds. Your mortgage payments for a year total a huge number. As much as 70% or 80% of that huge number is the interest you are paying the bank. 80% of a huge number is also a huge number. Let's say it's $10,000 for our Mr. Average, Paul Martine. Paul likes tax deductions. Every year he buys a $10,000 RRSP. (He has to first earn an extra $20,000 for the year so he can give up half to all the governments who want all their taxes, leaving him $10,000 to buy his RRSP). So Paul buys his $10,000 RRSP and claims a $10,000 tax deduction when he submits his income tax return. A few weeks later, Paul gets a lovely cheque from the taxman for $4,000 being 40% of the tax deduction he claimed. That's a 40% return on his "investment" which is excellent performance.
What Paul doesn't know is that hidden in his annual mortgage payments is another $10,000 tax deduction, which is free for the arranging. And he doesn't have to go and earn another $20,000 to get it. If he reads this book, he will learn how easy and inexpensive it is to convert an expense he is already paying, his mortgage interest, into a tax deduction that will yield equivalent benefits to what he would receive if he bought an RRSP. Not only that, once the conversion has been effected, the tax deductions will be automatic and free every year for as many years into the future as he still has a mortgage.
If you have a mortgage you could have all the same advantages as Paul Martine. But that's not all. Simultaneously you will begin now to build an investment portfolio of your own choosing. You will decide whether you want to invest in stocks, bonds, mutual funds, investment real estate, your own business or somebody else's business. These investments will be free and clear.
It sounds too good to be true. But before you adopt that assumption, consider that The Smith Manoeuvre has been operating continuously since 1984, tax lawyers from several of Canada's top law firms have confirmed to several large financial institutions that this is a creative but legal financial strategy. Revenue Canada auditors have interviewed me and my Manoeuvre in my office and hundreds of people are enjoying the luxury of The Smith Manoeuvre with more being added every month.
You may well ask, "Why isn't every Canadian doing this?" The answer is that I haven't met them all yet. The next best thing was to write this book, explain how it works and how to arrange these free benefits for your family. It's my gift to Canadians. I take great pleasure in the knowledge that many who read this book will be empowered to substantially improve the financial life of their family utilizing these tools of the wealthy. A little knowledge is a magnificent thing in the hands of the motivated. So do order the software (see the last page of this book) so you can run various versions of your own numbers and circumstances. Then, go to a financial planner and ask him or her to confirm the validity of the assumptions and projections. You will be glad you did.