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 protect us against advertising. We humans are driven by emotions in a lot of what we do. We have seen cases where people turn to debt as a way of coping with loss. It could be grief for the loss of a loved one, or maybe loss of income that launches you towards a new opportunity. Trump's biggest trick is that he appeals to people on an emotional level. He ignores facts and some would say that he just makes stuff up.

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, Licensed Insolvency Trustee Rebecca Martyn.

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 podcast.

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 (less than 20% down) but also to those with a regular mortgage as long as they had mortgage insurance. More rules come into play at the end of November 2016. The next set of changes will set limits on what types of mortgages can qualify for mortgage portfolio insurance, and these rules will apply even if the borrower has more than a 20% down payment.

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 of a basic income for all Canadians, and explore other solutions to poverty.

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 simple: go to the app, get your credit score for free, and in three minutes you may get pre-approved for a loan of up to $35,000 with rates starting at 5.9%. But are the rates really that good? What's the catch? And what do condoms have to do with it. That's what we discuss on today's show.

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 including some additional credit she incurred trying to keep up. What's common about all these stories we heard on today's podcast is that in each case, loaning money to someone to 'help out' ended up with very bad consequences for everyone involved. There are plenty of reasons not to loan money to a friend or family member: If they don't pay you back, you could jeopardize your relationship. Other family members may expect the same treatment or become resentful if you are seen to be favouring one child with money over another. If you have to borrow money yourself, this can lead to your own financial struggles, even your own bankruptcy if you are not repaid. You may be enabling bad spending behaviour by bailing your friend or child out, rather than forcing them to deal with their money problems on their own. Sometimes the best help you can give is no help at all. However if you do want to do something, ask yourself these questions first: Can you afford it? I recommend gifting money over loaning them money. That way you only gift money you can afford. Also, if there is no obligation to pay it back, there is less of a chance that the gift will create friction between you. If they pay it back, you will appreciate the gesture and the friendship will last. Are you really helping? Again, this goes back to enabling bad financial choices. If your child can't afford to maintain their new home, you are doing more harm than good. If they know they can turn to you for a loan, they will never learn to save or live within their means.

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 pensions, so the old fashioned view of retirement at age 65 with a full pension is no longer reality for most workers. Full details on the podcast.

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 would remove the exemption from the criminal code that allows payday loan companies to operate as they do and make payday loans as they are today illegal. Alternatively, Jonathon suggests that provinces could lower the maximum interest rate payday loans can charge incrementally over a period of a few years to allow the payday loan industry to adjust to these new rules.

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, Gail Vaz-Oxlade who is an advocate for having a system in place that will help you to pay off debt, save money and spend wisely. Gail is well known for her magic jar concept; the idea that you should allocate a specific amount of money to a number of goals (i.e. bill payments, savings, entertainment, groceries etc.) to keep yourself on track each month. Today we discuss her approach to budgeting, and the alternatives to budgeting.

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 an issue, it is not the real problem with payday loans. The real issue is total existing consumer debt. More specifically, it is the other debt that payday loan users are carrying before they take out a payday loan.

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.

Are you planning for retirement? Have you started to save? Do you know how much you need? If not, then today's podcast is for you. My guest, David Trahair, stops by to discuss his new book, The Procrastinator's Guide to Retirement: How You Can Retire in 10 Years or Less, and provides tips for Canadians who've delayed saving for retirement.

Is Canadian real estate due for a crash? On today's show, I speak with Hilliard MacBeth, a portfolio manager and author of When the Bubble Bursts: Surviving the Canadian Real Estate Crash, who thinks the Canadian housing bubble is about to burst. Hilliard notes that there are four symptoms of a bubble: A period of rapidly rising prices People telling each other stories about why the price increase makes sense People experiencing regret that they didn't get into the market earlier, or the fear of missing out – i.e. if they don't get into the market now, they never will The media starts to talk about the bubble He mentions that there is a prevailing myth that only Vancouver and Toronto are in a real estate bubble, when in fact the bubble exists across Canada. While incomes have only risen by 15% in the last 15 years and inflation has been under 2% for a long time, house prices have tripled. Considering that houses are paid for with income, the ratio of house-price-to-income has become so stretched that the bubble is no longer sustainable.

On today’s show we discuss a common question: if I have some extra money, should I pay off my debt, or use it to invest? In some cases the answer is easy. If you owe money on a credit card with a 29% interest rate, and your investment will earn 1%, you should obviously pay off your credit card. But what if your debt is a low interest mortgage, and you think you can earn a greater rate of return on an investment. Than what? That’s the question we asked Sean Cooper (famous for paying off his mortgage in just over 3 years), and Ted Michalos, all on today’s Debt Free in 30.

Today I ask a question that generates a lot of debate on our Facebook page: what happens if you stop paying your debts? More specifically, what happens if you stop paying your debts and you are not in a consumer proposal or bankruptcy? To help me delve deeper into this topic, Ted Michalos, my partner and co-founder of Hoyes, Michalos & Associates, joins me to discuss the various outcomes of not paying your debts.

Often, I share advice about how to get out of debt and live debt free. But, what if you've already eliminated your debt and you're ready to get back on track? What's next? Today, I am going to share tips on how to rebuild credit after a consumer proposal or bankruptcy. First, I don’t advise that anyone, after completing a consumer proposal or bankruptcy, jump right in and start borrowing again. If you can live without debt, that’s great! However, in today’s modern economy, you might need or want access to credit. And if you want to borrow and keep your interest costs low you need a good credit score. On today’s show we discuss tangible steps you can take to improve your credit score after a consumer proposal or bankruptcy. On today’s show we discuss five simple steps to rebuild credit.

It’s no secret that payday loans charge an outrageously high interest rate. In Ontario, they can charge $21 for $100. If you take out a new $100 loan every two weeks, you would pay $546 a year, that's an interest rate is 546% on an annual basis. And therein lies the problem with these types of loans. But what is the solution? On today’s podcast, Doug Hoyes speak with Jonathan Bishop, a Research and Parliamentary Analyst at the Public Interest Advocacy Centre (PIAC) about Bill 156 and pay day loan regulation. The PIAC is a non-profit organization that conducts research into public service issues that affect consumers. The payday loan industry is something they have been investigating for well over a decade.

It can be hard to know who to turn to when you are dealing with Canada Revenue Agency and you need tax debt help. Some situations are relatively simple and can be resolved on your own, while other situations may require more expertise. Choosing the wrong professional for your situation, may end up costing more than it should. On today’s show, Doug Hoyes speaks with Janette Martin, a Certified Credit Counsellor, and Ian Martin (no relation), a Licensed Insolvency Trustee with extensive experience with the CRA, about how to get the right tax debt help.

The payday loan industry in Canada loans an estimated $2.5 billion each year to over 2 million borrowers. Like it or not, payday loans often meet the need for urgent cash for individuals who can't, or won't, borrow from more traditional sources. If your hydro is about to be disconnected, the cost of a payday loan may be less than the hydro re-connection fee, so it may be a prudent financial decision in some cases. As a “one time” source of cash a payday loan may not be an issue. The real problem is payday loans are structured to keep customers dependent on their services. Like opening a box of chocolates, you can’t get just one. Since a payday loan is due in full on payday, unless your situation has improved, you may have no choice but to get another loan from another payday lender to pay off the first loan, and a vicious debt cycle begins. So what’s the solution? That’s the question I asked my two guests, Brian Dijkema and Rhys McKendry, authors of a new study, Banking on the Margins – Finding Ways to Build an Enabling Small-Dollar Credit Market.

On today's podcast we talk with Ted Michalos about the Office of the Superintendent of Bankruptcy and how they regulate the bankruptcy process, and trustees, in Canada and why they changed the name from bankruptcy trustee to Licensed Insolvency Trustee (LIT).

A conventional mortgage today has a 25 year amortization, because the typical borrower wants, or needs, 25 years to pay off their mortgage. So is it possible to pay off your mortgage faster? Sean Cooper became a media sensation after paying off his $255,000 mortgage in just three years. We talked with Sean about how he paid off his mortgage so quickly, what sacrifices he made, what he might have done differently in hindsight and what tips he has for anyone wanting to pay down their mortgage sooner.

There are a number of personal finance personalities, especially on American radio and TV, who say that if you have too much debt it’s because you spent too much and you're the cause. After all, if you're actions aren't to blame, then they can't sell you their solutions and books. But is that opinion valid? Are all of our financial problems entirely our fault, or are there other factors that lead to debt problems? On today's show we talk about how circumstances can overtake anyone. Kelley Keehn and Robert Brown discuss why sometimes “stuff happens”, and we discuss five reasons why debt problems may not be your fault.

There are many reasons people find themselves in debt. For our guest today, the underlying cause of his financial difficulties was drug addiction. James inspires us with his story - both how he battled his addition and why bankruptcy was a part of his recovery. James actually contacted us with a moving letter about his recovery which is what inspired us to ask him to be on our podcast. On today’s show James tells the story of how he started using drugs at age 14, and was an addict until age 27. He got into debt, but he turned his life around, as he explains on today’s show.

At the end of 2015, updates and clarifications were made to existing Ontario bankruptcy laws that directly affect indebted consumers. On November 13, 2015 the Supreme Court of Canada put forth a ruling about the 407 ETR (a toll route in the Toronto area) concerning the treatment of 407 debts in a bankruptcy or consumer proposal. Another big change came on December 1, 2015, as the Execution Act in Ontario was updated. On today’s show Doug Hoyes and Ted Michalos, co-founders of Hoyes, Michalos & Associates, Licensed Insolvency Trustees, discuss how the changes, as well as the Supreme Court's ruling, will affect Ontarians looking to deal with their debts. Disclaimer: Our discussion about updates to the Execution Act are the interpretation of ourselves and the lawyers we've spoken with about the new rules. This is new legislation that has not yet been tested in court, and as such, a judge could rule differently than we've interpreted the information on today's show.