Ed Rempel, a certified financial planner (CFP) and accountant, is a regular comment contributor to the “Smith Manoeuvre” articles on this blog. He has come up with a twist to the Smith Manoeuvre strategy that maximizes the tax and investment return on your leveraged portfolio.

He calls this strategy “The Rempel Maximum“. If this is the first time you are hearing about the Smith Manoeuvre, it is basically a financial strategy that converts your non-deductible mortgage into a tax deductible investment loan. You can read more about it my article “The Smith Manoeuvre: A Wealth Strategy“.

How exactly does “The Rempel Maximum” work?

  • The “Rempel Maximum (RM)” is a variation of the Smith Manoeuvre (SM) that maximizes both your tax and potential portfolio return while using $0 of your own cash flow. When you use the SM, you will get a small increase in your HELOC balance as you pay down your mortgage which is then used to invest. With the RM, instead of using the small increase to invest, you use the increase to fund your investment loan/HELOC.  This may result in obtaining an additional investment loan depending on the size of your principle payment.  More on this below.
  • This way, you get the tax deduction from the HELOC along with the tax deduction from the investment loan. Canadian tax rules state that you can deduct the interest from a loan that supports an investment loan.
  • On top of that, you’ll have a large balance to work with initially to take advantage of compounding returns and time.

How is it implemented?

  • You’re probably wondering how large of an investment loan can you obtain? According to Ed Rempel:

For example, if your mortgage payment pays $500/month of principal ($6,000/year), you divide the $6,000 by the interest rate (say 6%), which gives you $100,000. You increase the credit line limit on your readvanceable mortgage to 80% of your home value, which is often done for free at the major banks. Then you borrow and invest up to the credit line limit. If there is less than $100,000 available, then you finance the rest from an investment loan.

  • Based on the above example, the banks will give you [principle payment/interest] as your maximum investment loan including your HELOC. Depending on how much equity you have in your home, you could end up with a fairly large investment loan.

What are the risks involved?

  • This strategy uses the maximum leverage available to you based on your principle payments or how much your credit line is readvanced with every payment. Needless to say, the investor must be aggressive, comfortable with risk, and experienced with investing.
  • As you probably already know, leverage amplifies your returns, good or bad.

What are the potential returns? How does it compare to the regular Smith Manoeuvre?

  • Using the maximum available loan amount potentially means higher returns or bigger losses. If you are investing for the long term 25+ years, then your overall losses will most likely be minimized.
  • Below is an example from Ed Rempel:

They have a home worth $400,000 and a mortgage of $200,000 at 5% and are paying $1,169/month (25-year amortization). They can reborrow at prime of 6%, the investments average 10% long term and they are in a 40% tax bracket. Each mortgage payment pays down $336 of principal x 12 months / 6% = $67,200. Since they have more than the $67,200 in available credit in their SM credit line, they can borrow this $67,200 to invest. The interest payment is $336/month which can be paid entirely from the SM credit line each month. Additional benefit of the Rempel Maximum over the SM: After 25 years: $410,000* Total benefit of the Rempel Maximum: After 25 years: $718,000

Who should use this?

There are 3 criteria that a person should consider before implementing this strategy:

  1. The investor must be experienced and comfortable with risk.
  2. The RM works best if your initial HELOC balance is small. ie. Someone who is just starting the Smith Manoeuvre with a little over 25% in equity.
  3. The investor must be in this for the long term, 20+ years.


The Rempel Maximum is a way to maximize the potential returns from implementing the Smith Manoeuvre through the additional tax deduction and increased leverage. This can be an extremely powerful and lucrative strategy if used properly over the long term.

If you are considering using this strategy twist to the Smith Manoeuvre, make sure that you are comfortable with the maximum leverage applied to your portfolio. Feel free to ask your questions in the comments section, Ed Rempel has agreed to help explain the details if requested.

If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).


  1. Cannon_fodder on April 16, 2007 at 10:29 am


    Do you recommend to any clients to borrow up to the full limit of equity available, not just what can be carried without additional cash flow?
    Secondly, are you proposing that you keep the HELOC constant (i.e. Step II only of the SM) and your comparison is to a Step I and Step II of the SM without initially borrowing from the equity built up?

  2. Brad 'Spazmogen" Ormsby on April 16, 2007 at 8:22 pm

    I’m somewhat confused by the example above.

    I have 2 credit lines set up for the SM. $5K & $14.5K I have yet to write a cheque to my advisor to buy the investments. For the RM am I to use the $14.5K available to secure an additional investment loan as well ?

  3. Brad 'Spazmogen" Ormsby on April 16, 2007 at 10:59 pm


    Ignore my previous post. I found the answer in the mighty SM thread at Red Flag Deals.

  4. Cannon_fodder on April 17, 2007 at 12:56 pm

    Another question to Ed:

    Whether you call it the Rempel Maximum or Turbo SM, would you still advise your clients to take that initial lump sum of equity built up (in your example above $67,200) and invest it in tax efficient mutual funds as you have stated before, or would you only put the periodic payments into those mutual funds (to minimize drag based on trading commissions)?
    It seems to me that such a large sum of money could be invested directly into stocks.

  5. djg on April 18, 2007 at 11:29 am

    Just wondering, if you already have a $20000 leverage loan, can you use this as an initial amount for the rempel maximum and add then add another leverage loan based on the initial principal payment you can afford? I guess my question is can you set up the Rempel maximum using a previous investment loan despite the fact that the investment loan was in place before you did the SM/Rempel strategy?

  6. Ed Rempel on April 24, 2007 at 12:09 am

    Hi Cannon,

    Most of the time we do recommend our clients use the available equity in their credit lines. This is a “top-up”. Leveraging more usually helps them reach their goals more quickly and is usually appriate for the client. Sometimes this will require some of the client’s cash flow to carry.

    The Rempel Maximum may be more or less than this ammount, depending on how much principal is paid down with each mortgage payment.

    The HELOC itself continually rises in every scenario, but the total debt stays constant. This is true whether or not it makes sense to use extra leverage.

    I have not heard the Rempel Maximum called the Turbo SM, although I’ve heard the Smith/Snyder called that. They are very different strategies.

    Yes, we use mutual funds managed by “all-star fund managers” for all of the investing. This is because we believe the most important issue with stocks is the skill of the investor.

    There are “all-star fund managers” that have beaten the indexes by wide margins over long periods of time. They all study the markets and know specifically what systematic market inefficiency they take advantage of. None are employees of anyone, since they own their own investment firm. These fund managers are easily worth more than their cost.

    Investing directly in stocks may save some MER, but the quality of the stock selection and the strategyof when to buy and sell is far more important.

    The Dalbar study showed that the average individual investor in mutual funds averaged only 3.5% over 20 years, while the average mutual fund they invested in averaged 11%. This is because of the consistent bad market timing humans are genetically programmed to do.

    While I have not seen similar comprehensive studies of individual investors investing directly in stocks, from people I meet, I’m sure it is much worse than the average return of individual investors in mutual funds. This is because the same bad market timing will have a much bigger effect.

    I did hear of one study of thousands of on-line brokerage accounts that tracked stocks sold vs. stocks bought. It showed that when investors sold a stock to buy another, the stocks investors sold out-performed the stocks they bought. In other words, the net benefit of all trades done by all individual investors is a negative number!

    Investing with all-stars easily beats the average mutual fund. I’ve been studying them and get to meet them – and they are much smarter than me.

    Remember, financial advisors and stock brokers are almost all amateur investors – not professionals. We don’t have a CFA or money management degree. We don’t have our own research team. We don’t have an established track record or beating the indexes.

    Individual stocks are far more volatile than mutual funds. Even the bluest of blue chip stocks, such as Royal Bank are far more volatile than the average mutual fund. Individual stock portfolios are usually far more risky than the investor thinks.

    Bottom line – why be an amateur stock picker or hire an average stock picker when you can hire the world’s greatest investors?

  7. Ed Rempel on April 24, 2007 at 12:15 am

    Hi Djg,

    Sure. Using an existing leverage loan within the Rempel Maximum is as good as a new one.

    In fact, if you are used to making the payments yourself on your existing loan, then you could add the amount of that payment to your mortgage payment and then readvance from the credit line to pay your leverage loan. This way, your cash flow is not changed, but you convert your mortgage to tax deductible more quickly.


  8. Sam on April 24, 2007 at 1:35 pm

    hi ed,
    would you know any means wherein loan/leverage is provided to invest in mutual funds..i know AIC funds allow you to borrow through tie ups with financial institutions..but their MER scares me off…..

  9. KK on April 25, 2007 at 2:53 pm

    Hi Ed,

    I have a credit line of about 180k and a mortgage of 90k. When it’s time to implement the leverage, I’m thinking about leveraging with 100k only. Now, having seen that the market has been good for a few years, and no one knows when the peak will come, leveraging 100k at one time appears to be a bit risky (to me). So, I am thinking about cost-averaging the 100k, e.g., 5k every week for 20weeks. The composition of the funds stays
    the same. My questions are:
    (1) Will you do dollar cost averaging for the initial leverage? Frequency and amount?
    (2) As I am not utilizing my full equity for SM, I assume the risks/benefits will be lower relative to utilizing the full equity. Any other drawbacks that I should be aware off?
    (3) I don’t know whether the HELOC that I am getting is re-advanceable or not ( I was told it is, but it may involve a re-application and therefore inconvenience), but since I won’t be using the full credit available (80k available), I can still “capitalize the interest” by manually drawing funds from the LOC to pay the interests every month. Have I understood how it works correctly?

    Thanks in advance for your help!

  10. Cannon_fodder on April 27, 2007 at 12:10 am

    I’m thinking of an additional enhancement to my Smith Manouevre SS. If one decides to tap into available equity built up (to a maximum of now 80%), and then buy appropriate securities, you could use those as part of a further leverage by using them in a margin account. The enhancement would be to calculate how much it would cost one outside of the normal cash flow of a ‘typical’ SM.
    For example, if tapped into $120k of equity that could potentially be leveraged into another $280k. The $400k would probably cost about $24k in interest costs annually, or about $13k after the interest writeoffs. If those equities provided a dividend yield of about 4.3% then, after taxes, that would cover the interest costs. (I’ve used Ontario’s highest marginal tax rates.)
    This assumes that the dividends are not used to pay down the mortgage faster, redrawn and reinvested. When you supercharge the LOC this way it would be good to know how much additional cash flow you need to provide to support this.

  11. Ed Rempel on May 2, 2007 at 1:35 am

    Hi Sam,

    Yes, there are a variety of places you can borrow against mutual funds. We are all comfortable leveraging real estate, but leveraging mutual funds is relatively easy as well.

    Most banks & insurance companies will offer leverage loans, but often they want you to buy only their funds. There are several trust companies that work through financial advisors only – B2B Trust and M.R.S. Trust – that do a lot of leverage and allow almost any mutual fund. They also manage them and allow transactions, issue consolidated statements, etc. In fact, the AIC program you mentioned is actually B2B Trust, since they do while label leverage for about 20 different fund companies.

    Leveraging mutual funds is generally a sound strategy, since you are hiring professional investment management. It is critical with any leverage program that you have a sound investment strategy, buy high quality investments, and most importantly, that whoever is managing the investments knows what they are doing.

    You mentioned the MER’s at AIC. Their MER’s are a little higher than most similar fund companies. The key issue with MER’s is not to get the cheapest fund, but to get value for your money. Much of the MER is what is paying the fund manager. Would you be proud if your fund manager was the lowest paid fund manager in Canada?

    We study the fund managers and try to identify the smartest of the smart – and we call the ones we think are the world’s best fund managers “All-star fund managers” (since I like hockey). When we find them, most of them are not in low MER funds. But why would you expect them to be? Wayne Gretzky and Mario Lemieux, and now Jaromir Jagr and Joe Sakic, all are not among the low-paid hockey players. They are worth the high pay.

    Similarly, the average mutual fund manager is not worth their cost, but the top fund managers are easily worth their MER and more. If your fund manager beats the index by 4-5% compounded for 15 years after his MER of 2.7%, is he worth it?

    In fact, one fund manager we use has beaten the index by 4%/year for every rolling 5-year period over the last 25 years – after a 2.7% MER. Compared to an index fund, we sometimes look at it as a “negative 4% MER”.

    The point is to look for value for your money, instead of trying to hire the cheapest money manager.


  12. Ed Rempel on May 2, 2007 at 1:38 am

    We just finished our tax season! We do tax returns for clients, which has kept me quite busy the last few weeks. That is why I have not written much lately. As soon as I catch up on a bit of paperwork, I’ll have more replies here.


  13. Ed Rempel on May 2, 2007 at 1:39 am

    I should add that our clients had a net combined refund of $350,000! And I think they will use that money more wisely than the government…


  14. sam on May 2, 2007 at 8:24 pm

    hi ed,
    thanks again for your detailed reply…
    you mention fund managers beating the index by a margin consistently…atleast from the various books i read…almost all of them say fund managers even fail to live upto to the indexes..
    of course you would have read lots more of those books then me…is’nt your view against the popular view/thoughts of today…

    i know you would’nt want to disclose the funds you use for your clients( ah that might be your trade secret)…but do those funds outscore the index(after taking the huge MER into account)..

    thanks again for your valuable time….

  15. Ed Rempel on May 6, 2007 at 12:58 am

    Hi Sam,

    Good question. This will be the subject of several future posts. The short answer though is that there is a big difference between the average fund manager and the top fund managers.

    In the NHL, the average hockey player scores 8.8 goals each season. But that doesn’t stop Cheechoo, Jagr, & Ovechkin from scoring more than 50 goals.

    You’re right that the average fund manager makes less than the index. The results vary depending on which index and which year, but generally only 30-40% of fund managers beat the index in any year and only about 20% beat it long term.

    For some of these, it is luck and for some it is skill. Believers in the Efficient Market Theory would have us believe that it is always luck.

    The average fund manager is just a salaried employee trying to keep their job. To keep their jobs, they don’t want to be much different than the market and they want to have less downside than the market. They follow traditional investing methods.

    However, there are fund managers that have beaten the indexes by wide margins over many years after all costs, often quite consistently. Nearly all can tell you exactly why and what systematic market inefficiency they take advantage of. They have their own firm and no bosses, they have a specific strategy they consistently follow, and they intentionally invest quite differently than the markets.

    For a variety of reasons, they usually manage different funds over their careers, so you can rarely see their exceptional records all in one fund.

    One of the most important things we do is analyze fund managers and try to figure out which are the best and brightest vs. those that are lucky for a while.

    The point is that “All-star fund managers” with exceptional track records that beat the indexes by wide margins after all costs do exist and are worth the effort to find.


  16. Peter on June 15, 2007 at 12:19 pm

    I am having a little difficulty understanding the Smith Maneuver and subsequent Rempel Maximum. Where can I get a step by step of how it all works.


  17. David on June 16, 2007 at 3:45 pm

    With the Smith Manoeuvre, you use the increasing equity in your mortgage to buy a variety of investment instruments over a period of time.

    If I understand the Rempel Maximum, you use the increasing equity in your mortgage to pay the interest costs on a loan to buy investments. The RM allows one to leverage a far larger portfolio.

    If the SM would grow your investments at $500/mo due to reductions in your principal, the RM would allow you to immediately purchase a $100,000 portfolio, and use the $500/mo to service the interest cost. You could possibly increase the $100,000 by managing the tax credits you would obtain on the interest, and thus increasing the interest payment.

  18. Ed Rempel on June 16, 2007 at 8:10 pm

    Good summary, David.

    Peter, is there a specific part of this you are not clear on? FT has written articles on both Smith Manoeuvre 1 and the Rempel Maximum. They are generally accurate, except for investing in income producing investments (which is FT’s addition).

    Before we go through step by step on everything, which part of it is unclear to you?


  19. Jay Day on June 26, 2007 at 9:00 pm


    Thanks for the running commentary it is very intersting. A few questions you can hopefully help me with. 350k assessment, 230k mortgage, 1280 payment, 340 to principle, 4.6% blended, 23 years left. My calculations have me at roughly 88k and change for the RM. How does the bank qualify you for the loan over the 80% of your assessed value approx 39k (350×80%-230K for SM value then the remainder for the RM)

    Also with capitalizing the loan for ei., if the 50000 dollar SM set up costs 4200 in interest a year, and you simply withdraw and deposit from the HELOC, is your HELOC now approx. $54200 at year end. That is my understanding. Finally if it is, does that entire amount now qualify as good debt, which equals bigger tax break.

    Lastly I am in Nova Scotia does your company do any work here. If not do you know any company the handles this type of thing.

    Does Warren Buffet investments count as an all star?


  20. Ed Rempel on July 8, 2007 at 12:25 am

    Hi Jay,

    Are you a fan of Toronto baseball? We had a Jay Day last year…

    You have the concept right, Jay.

    You can get the additional $39K you need for the Rempel Maximum from a number of trust companies that use the investments as collateral. They charge only a bit over prime and you can get them as a no margin call loan.

    You are right about the capitalized interest being tax deductible. The tax rule is that if the interest on a loan is tax deductible, then the interest on the interest is also tax deductible. So, if the interest is $4,200 and you borrow on your credit line to pay it, all the interest is still decutible (as long as the tracing is clear).

    I don’t quite get your figures. A $230K mortgage at 4.6% paying $1,280/mo. would give you $400/mo. of principal. At 6% prime, this would finance $80,000 of investments. Since you would have $39K at a bit over prime, the total may be slightly less – say about $77K of investments.

    Yes, Warren Buffett is definitely an all star. What do you mean by “Warren Buffett investments”?

    We are in the Toronto area, but we can take a serious client in Nova Scotia. Face to face meetings are better, but phone meetings and fax work fine for some of our long distance clients.

    Other than that, the only one I know in your area is Lloyd Snyder, who invented the Smith/Snyder. He is in PEI, but uses a very different strategy than we do. The Smith/Snyder is more about living off of you equity, while the Rempel Maximum is more suited to people building wealth.


  21. […] Smith Manoeuvre Strategy:  The Rempel Maximum […]

  22. Felix on August 14, 2007 at 12:58 pm


    What serves as a collateral for the larger RM investment loan?


  23. Ed Rempel on August 19, 2007 at 11:19 pm

    Hi Felix,

    You can use equity in your home or use the investments as collateral. With the Rempel Maximum, we use equity while it is available, and then get a separate investment loan for the additional amount until the total payment equals the total mortgage readvance each month.

    We have several trust companies that provide investment loans for 100% of the amount we want to borrow (subject to qualifying) and on a No Margin Call basis.


  24. Cannon_fodder on August 23, 2007 at 1:41 am


    I’ve continued to enhance my calculator originally created to help me understand the Smith Manoeuvre. I’ve added the logic for the Rempel Maximum. But, I’ve run into a conundrum.

    If I use typical scenarios where the LOC interest rate is > than the mortgage rate, and if you borrow up to an amount dictated by the principle paydown of the 1st mortgage payment, you quickly run into a negative cash flow impact – in other words, you have to come up with additional money. I’ve also tried a different scenario where you borrow an amount that requires absolutely no additional cash flow through the entire process and is timed to balance the LOC interest costs with the original mortgage payment.

    I’ve input your numbers from the article and at the end of the 10th month the LOC Interest expense had already surpassed the mortgage principal paydown (thus requiring additional cash) and grew to require an additional $173 per month once the mortgage was retired.

    Of course, one could dip into the anticipated tax refund to help fund the additional cash required.

    At this point, I can simply calculate the initial amount of the RM LOC so that it is based solely on the mortgage payment itself. This guarantees that you will never require additional cash to fund this maneouvre. However, it is far less aggressive.

    I’d like to hear from you, the inventor of the process, so that I can properly adjust my calculator.

  25. Ed Rempel on September 9, 2007 at 6:53 pm

    Hi Cannon,

    Sorry its taken me a while to respond to your question. We’ve been away on vacation.

    I’m not sure exactly how your spreadsheet works, but we’ve done many and have not run out of room in the credit line. My guess is that it must have somthing to do with the mortgage interest calculation. The amount of principal being paid down on the mortgage rises with every payment.

    If your mortgage rate is lower than the credit line rate, there is a small effect of the credit line rising a bit faster than the mortgage is being paid down. But this is very minor and should not cause a problem.

    For example, we are using variable mortgages at prime -.85% now (5.4%). At this rate, it works out that the principal being paid down rises by 5.5% each year. If you compound all the interest and are paying prime (6.25%, then it works out that your credit line should rise by 6.4%. This is very slightly higher, but not a problem. With a $200,000 mortgage, this works out to $3/month after a year. The total difference between the growth of the credit line and the decline of the mortgage is only $20. This would generate a tax refund over $1,500 in year one, so if you put any of it on the mortgage, you are fine.

    In practice, we generally leave $500-1,000 of the credit line uninvested as a “slush” so we don’t go over the limit because of the timing of a payment and so this slight increase doesn’t cause any problems.


  26. Cannon_fodder on September 11, 2007 at 6:28 pm


    I will forward you some screen captures of my calculator to help me explain my issue better.

    I agree that the growth of the LOC is faster by $3/month after the first year, but that this continues to accelerate due to the tax refunds and becomes quite significant by the end of the mortgage reaching more than 10% of the original mortgage payment.

    You did mention the tax refund – if you are using the tax refund to offset this monthly difference, then applying the remainder to the mortgage, then I can see how you would achieve this without any additional cash flow. I had assumed that you put the entire tax refund against the mortgage as is typical with Step II.

    Here is the input page

    Here are the first several months of results

  27. Mortgage Confused on September 13, 2007 at 2:05 pm

    Hi Ed:
    Ok, I’ve been following the SM and RM and I’m just starting to get the grasp of the whole concept. The one thing that I’m confused about is the mortgage terms and amortization. If you start the SM at 25 yr Amort, do you ever drop the Amort. down? It would make sense to drop it down in order to get mortgage paid off quicker,no? Yes your payments will be higher, but, in the long run the mortgage goes quicker. This is the concept, I’m having a hard time to to picture. My current mortgage is up for renewal in 10 months, when the new amort. will be 18 years.(Also paying accelerated payments) Do I then start the SM at 18 years Amort? If you did the SM with accelerated payments, would you not get the mortgage paid quicker, which in turn gives you more LOC to invest? Thanks in advance

  28. FrugalTrader on September 13, 2007 at 2:11 pm

    MC, one of the goals of the SM is to pay off your non-ded debt faster. So if you can, put as much money as you can towards the non-ded mortgage. In my scenario, the SM will decrease my amortization from 16 years to 12 years. With a few extra dollars pre payment every 2 weeks, it will bring it down to 9 years.

  29. Mortgage Confused on September 13, 2007 at 4:28 pm

    Ok FT, that makes sense, so what are your mortgage assumptions then,as far as your payment frequency and amort. to give you the 16 to 12 years savings? Do I assume that you pay bi-weekly then drop some extra on those payments to get it to 9 years?

  30. Cannon_fodder on September 13, 2007 at 6:39 pm


    To drop your “time to burn the mortgage papers” from 16 to 12 without a lot of extra payments, you must be implementing RM, too – correct?

    And to then go from 12 to 9, well I don’t see how you can do with with just a “few” extra dollars every 2 weeks – unless you have a small mortgage.

    Or, you could be using the cash flow dam. That is one VERY quick way to convert the non-deducti ble to deductible.

  31. FrugalTrader on September 13, 2007 at 7:19 pm

    Hey guys, yes to drop my mortgage down to 9 years, I would basically do bi-weekly payments (with extra on top), along with adding my regular “non registered” contributions towards the mortgage. On top of that, all tax returns and dividend distributions will go towards non-ded debt. I think it worked out to be around 9-10 years the last time I checked on a $160k mortgage.

  32. Ed Rempel on September 16, 2007 at 7:36 pm

    Hi MC,

    With the Rempel Maximum, you can pay your mortgage down as slow or fast as you want. You should be getting much larger refunds than with the SM, so you could use these to pay down the mortgage faster.

    The other advantage is that if you increase your payment to reduce your mortgage amortization, you can increase your leverage investments, as well.

    For example, if you increase your mortgage payment by $100/month, with the SM you can also invest this $100/month. With the Rempel Maximum, though, you can increase your leverage investments by $19,000.

    Go ahead and accelerate your mortgage payment as much as you want. Then work out how much more leverage investment you can do.


  33. Ed Rempel on September 16, 2007 at 7:49 pm

    Hi Cannon Fodder,

    I’m inpressed by your calculator. It looks like the SM Calculator with a bunch of enhancements, such as adding the Rempel Maximum.

    The SM Calculator does not calculate for many of the strategies we use, so we often have to supplement it with additional calculations. Have you verified the accuracy of your calculations?

    In answer to your question, you can put the entire tax refund onto your mortgage. Every few years, you may need to readvance slightly less than the lump sum mortgage payment from your tax refund.


  34. Cannon_fodder on September 16, 2007 at 10:58 pm


    So, with the Rempel Maximum in ‘aggressive’ mode (whereby you borrow enough money at the beginning so that the principal paydown would be equal to the LOC interest) there is a realisation that not all of the tax refund will be used to pay down the mortgage – unless you can handle the additional out of pocket cash flow. Is that correct? One way this could be handled is to set aside a certain amount of $ from the tax refund to help pay off the additional cost to service the growing LOC. Is that what you tend to do?

    As for verifying the accuracy of the calculations, my calculator used to give the exact answers provided by Smith in his book and on his website. However, because I calculated in detail how everything worked, I believe I discovered an error in how calculations are made with respect to the investment portfolio. I since have changed my calculator so that the logic is sound and the results are still very close so the error in logic was not large. (The error has little impact except when it comes to cash flow damming with relatively large monthly cash flow. I am in contact with Smith to help resolve if my discovery as it applies to all scenarios is in fact correct.)

    If you want to throw some scenarios at me, I can put them through the calculator and provide you answers. It would help me validate the logic as there are many enhancements my calculator has over the SM calculator. This leaves me without a comparable reference for accuracy.

    I have already decided that I will be implementing RM when my mortgage comes up for renewal next year. Thank you!

  35. Djg on September 18, 2007 at 6:25 pm

    I am not sure if I understand the logistics behind this one entirely. I understand using the monthly increase in the equity loc to fund an investment loan. However, it seems that eventually the deductible debt in the loc will surpass the value of the initial investment loan. If you start with let’s say $300 in your line of credit and the use that initial and subsequent readvances to fund the interest on an investment loan where does the extra money come from for the SM? Does it come from the yearly tax refund?


  36. Ed Rempel on September 19, 2007 at 12:59 am

    Hi Cannon & Djg,

    With the Rempel Maximum, all of the tax refund is paid onto the mortgage. All of the interest on the leverage is paid out by readvancing the mortgage.

    Depending on what interest rates are, the investment credit line might grow slightly faster than the mortgage declines – until the tax refund comes in. The tax refund is much larger with the RM than with the SM because there is a higher level of leverage.

    We usually leave $500-1,000 available credit as a buffer in the credit line when we start to cover any interest shortage or to protect against a timing error and accidentally going over the limit.

    The interest difference might eat up $20-30 (in the earlier example) of our buffer over the year, but then a refund of $1,500 is paid onto the mortgage, which would give us a huge buffer again. We can then reborrow all or nearly all of the $1,500 to invest.

    There is no additional SM, generally. Once you have paid down the mortgage enough and are paying more principal with each mortgage payment, you might be able to increase your leverage.

    The RM strategy is to use any available principal payment to maximize your leverage, instead of using it for a monthly investment with the SM.

    Does that clarify your questions?


  37. Dunk on October 3, 2007 at 7:40 pm

    I’m considering applying a variation of this myself. It involves leveraging and was presented to me by Fraser Smith’s son, Rob Smith! This is how it works! Sounds logical, although not without some risk….

    1) Get out of my existing mortgage(21 yr amm. @ 4.75%, 5 years left) and into a re-advancable FIXED rate mortgage (25 yrs @ 5.90%, 5 yr term)that automatically readvances the principal portion of each mortgage payment to a Line of Credit (This will make sense – read on)
    2) Take out my home equity, (less 25% which remains in the home[cushion equity]) and invest with a 2 for 1 loan at Prime(6%). In my case, my home at 450k less 25% =$337,500.00 less Existing Mortgage (FEES AND PENALTIES FOR TERMINATING THE MORTGAGE added) of $262,750 = (FREEBOARD EQUITY) $74,750
    3) $74,750 + 149,500 (B2B LOAN) = 224,250 INVESTED WITH STONE ROC fund

  38. FrugalTrader on October 3, 2007 at 10:28 pm

    Dunk, your strategy for the Smith Manoeuvre sounds very similar to mine:

    Things to watch out for, make sure that the mutual fund that you picked does not pay out “return of capital”. If it does, it will slowly erode your deductible investment loan. What is the interest rate on the B2B loan? Is it interest only? Or principle + interest?

  39. Ed Rempel on October 4, 2007 at 12:26 am

    Hi Dunk,

    The strategy you are describing is called the Smith/Snyder and is very different from the Rempel Maximum. It is being heavily marketed and sounds good, but I don’t use it – except for retirees needing income.

    As FT mentions, there is a tax problem, since the distribution paid out is almost entirely “return of capital” (ROC). It is not the return of the fund – it is the amount of your own money the fund pays back each month.

    The reason he assumes you spend the tax refund is because there is not much of one. Since you are getting your own money back with the ROC fund, you can no longer deduct that amount of the interest.

    The Stone Groth & Income fund is a 2-star (below average) Canadian balanced fund that has averaged 4.9%/year for the last 10 years. Stone claims they will never reduce the distribution (in dollars), but since the fund earns nowhere close to its distribution, your balance goes down every year. It paid out 12% a year or so ago, but now pays out 15.1% (same payout but fund principal lower since it only made 2.7% in the last year).

    Since you are getting your own money back at 15.1%/year, after 6.6 years, the investment loan is entirely NON-deductible. This means you have replaced your non-deductible mortgage at 4.75% with a NON-deductible credit line at 6.25% (after paying a penalty)!

    Since the fund is 25% cash, 28% government bonds and 47% Canadian equities, you should expect it to earn perhaps 6-7%/year. Since it is paying out $2,822/month ($224,250 x 15.1%), the fund will be down to zero after 8.3 – 8.7 years.

    In other words, less than 2 years after your mortgage is paid off, the fund is at zero and you owe the full amount of your mortgage – NON-deductible and at a higher rate (6.25% instead of 4.75%).

    Projections show the expected long term benefit of the Smith/Snyder is tiny compared to the Smith Manoeuvre and much tinier still compared to the Rempel Maximum. This is because the SM and RM involve allowing your investments to compound exponentially over many years – and they fully maintain the tax-deductibility of the investment loan.

    If you are a senior desparate for cash flow with lots of home equity, you may want to consider the Smith/Snyder (perhaps as part of a RRIF Meltdown strategy). But if you are in a wealth-building phase, I would stick with the SM or RM that have many times higher expected benefits.


  40. Dunk on October 4, 2007 at 2:03 am

    Thanks for the comments. I was told the Stone ROC fund is just the “engine” to quickly convert my non-deductable mortgage over. The continued life long tax deductions come from re-directing my former mortgage payment toward interest and principle payments against the LOC and re-investing the funds into an eligable investment. I don’t know what you mean about the fund being at $0 at the end of 8 years? The distribution does not lower my principle invested amount does it? I wasn’t told this? Once the mortgage is converted in under 6 years, I’ll also have the funds from the 2,080/mo I’ve been investing throughout this time as well. I’ve received deductions on this all along as well. With my conventional mortgage gone, I’ll simply re-direct my usual monthly payment toward servicing the LOC, and re-borrow and invest again until I’m 130, getting the life time tax deduction the whole time! Is this not basically a faster way to building a sizable lump sum asset base to compound over time and then doing the basic smith manuever to continue the process for life?
    Rob also said that Fraser and he are working on a second book as a sequel to the SM that uses this strategy. Would Fraser recommend this if it weren’t 100% sound?
    Thanks for you feedback, I appreciate an objective and experienced opinion.

  41. Dunk on October 4, 2007 at 2:18 am

    Thanks for the comments. I was told the Stone ROC fund is just the “engine” to quickly convert my non-deductable mortgage over. The continued life long tax deductions come from re-directing my former mortgage payment toward interest and principle payments against the LOC and re-investing the funds into an eligable investment. Once the mortgage is converted in under 6 years, I’ll also have the funds from the $2,080/mo this strategy has allowed me to invest ($150,000+/-). I’ve received tax deductions on this re-investment all along as well. With my conventional mortgage gone, I’ll simply re-direct my usual monthly payment toward the LOC and re-borrow and invest again until I’m 70, getting the tax deduction the whole time! Is this not basically a faster way to building a sizable asset base to compound over time and then applying the basic smith manuever to continue the process for life?
    I was told that they’re working on a second book as a sequel to the SM that uses this strategy. Would Fraser recommend this if it weren’t 100% sound?
    Thanks for you feedback, I appreciate an objective and experienced opinion.

  42. Dunk on October 4, 2007 at 5:11 pm

    Just got off the phone with Rob Smith and he explained the following that is missing from your above concern. I’d also be consistantly investing $2,080.00 per month over and above the stone fund using this model (based on the flow of funds). You are correct in that the NAV of the stone ROC has been steadily declining over the last few years between 3-4% and this could be cause for concern, but then again maybe not. So, after 8 years, a portion of the new LOC balance at 6.25% is indeed non-deductable, but the $2,080/month I’ve been making and continue to make does have interest deductable amount. Therefore, we end up with an extra 200k(approx) invested in my case at the end of 8 years, a portion of the LOC that IS indeed tax deductible, and the lifetime tax deductions on the $2,080.00/month I continue to invest throught the LOC using the simple Smith Manuver converting over the Non-Deductable portion. BTW: the re-invested amount of $2,080.00 is being invested the entire time into the Stone & Co Dividend growth fund which has an outstanding performance record AND the favourable advantage of the dividend taxation rate. Based on the declining NAV of the Stone fund, I’d also have approx $160k still invested in the Stone fund. Another consideration to mitigate the risk is the fact that I can cash out up to 10% per year penalty free of the stone fund and move it into the dividend growth fund for better performance and security by re-investing through B2B loans.
    Does this now make more sense than just using a simple SM? It would seem that I build my Net worth more quickly using this method? Also, this model has NOT taken into consideration ANY tax deductions thus far as in a simple SM presentation. If you add these in over the 8 year period, the resulting gain in my net worth is even greater.
    Is there anything else I should consider here that I’ve missed?
    Many thanks!

  43. Dunk on October 4, 2007 at 8:29 pm

    The loan is a 3 for 1 Interest only at prime. Because I’m also re-borrowing and re-investing the $2,080.00 per month, I get the deduction on the interest on this portion. You are correct in that the interest on the Loan portion servicing the ROC fund is reduced by percentage of the amount of returned capital each month. I’m still left with an investment worth approx. 200k(not even taking into account compounded interest) and the ongoing deductions on the continued monthly diversions on this amount when the LOC loan becomes non-deductible. Still seems to make sense, and any tax deductions I could have re-invested along the way have not even been added to this calculation which would make the net result even more promising!

  44. Ed Rempel on October 5, 2007 at 10:16 pm

    Hi Dunk,

    I’ve studied this in depth and almost all those transactions actually do nothing! I realize it sounds and looks amazing, but do the math on it and compare it to other options.

    Fraser & I have been friends for a few years. He has been a huge help to me be showing me the SM, but we disagree on this strategy. Fraser learned this strategy from Lloyd Snyder, who we both know. Lloyd is in PEI and the strategy seems to work in that environment, where people tend to have lower home values and need more income.

    Lloyd also does the “Snyder Tax Calculation” which shows the declining amount of your investment loan that is still deductible.

    I’m guessing the reason you are asking about this is that is does seem too good to be true – doesn’t it? My opinion from doing the math is that it probably will benefit you – but not for the reason you think. And it is easy to beat with other strategies.

    First, let’s look at what the distribution does. When $2,850 is paid out in a distribution, the interest on $2,850 of the investment loan is no longer tax deductible. Then you borrow $2,850 from a credit line and invest it. The net effect is:

    Amount invested:
    Stone G&I -$2,850
    Stone Dividend +$2,850
    Net invested $ ZERO

    Amount owing:
    Mortgage paydown (additional) -$2,850
    Credit line (investment) +$2,850
    Net owing $ ZERO

    Tax Deductible Amounts:
    Investment loan -$2,850
    Investment credit line +$2,850
    Net change in tax deductible amount $ ZERO

    So, all that activity does nothing at all.

    So, let’s look at this same strategy without all this activity.

    Borrow the same amount $224,250, but let’s invest directly in the Stone Dividend fund (or an even better fund that we invest in because of its long-term risk/return and tax-efficiency). This is obviously a better fund than Stone G&I.

    Your mortgage is being paid down by $400/month, which we can reborrow in a credit line to pay some of the interest on the investment loan. However, the total loan interest is $1,168/month, so we need another $769/month to cover this interest. Let’s take this $769 out of the investment.

    Mutual funds allow a systematic withdrawal plan (SWP), which is any amount at all that we want it to send us every month. The taxation of this is only a bit different from having a distribution paid out, but it allows us to pick any amount we want.

    If the fund pays us $769/month and we use it to pay interest on the investment loan, then the interest on the entire loan is still deductible.

    (The tax problem with the Smith/Snyder is because the distribution from the fund is paid onto your mortgage. If you paid all of it onto the investment loan, then the loan is still entirely deductible.)

    In summary, you borrow $224,250 and buy Stone Dividend (or a better fund). You make your normal mortgage payment, which pays down $400/month of principal. It is linked to a credit line, so we can borrow $400/month. The interest on the investment loan is $1,168/month, so the investment sends you the difference of $769/month.

    This the Rempel Maximum Enhanced – with a larger amount borrowed to invest than the regular RM. How does this compare to the Smith/Snyder you described:

    1. Investment is the same amount $224,250, except that it is invested much better. All is in the Dividend fund (or an even better fund), instead of the Stone G&I fund. (It is chosen ONLY because of its unrealistically high distribution.)

    2. Tax deductible debt is the same – $224,250 total.

    3. Non-deductible debt is the same in total, except that it is at lower interest rates. Now only the mortgage is non-deductible. The mortgage is at 5.9% (or better), while the NON-deductible part of the investment loan is at prime 6.25%.

    Therefore, these 4 steps taken together have a NEGATIVE return:

    1. Distribution of $2,850/month
    2. This reduces the amount of the investment loan that is deductible by $2,850/month
    3. Extra mortgage payment of $2,850/month
    4. Reborrow $2,850/month from a credit line to invest (buy back the amount taken out by the distribution).

    With the Smith/Snyder, so much is happening that is is hard to see what we are really doing. If you take out these 4 steps and do the Enhanced Rempel Maximum, it is much more clear.

    You are borrowing $224,250/month to invest. The investment pays most of the interest cost, but should still grow over time. You can reborrow $400/month from the principal on your regular mortgage payment to pay the rest. All the interest on the investment loan is still tax deductible, so you don’t need to bother with the “Snyder Tax Calculation”.

    The benefit of the Smith/Snyder is because it can get you to leverage much more than you would otherwise. However, putting it into a low return fund and then doing 4 meaningless transactions only reduce the benefits.

    If you still don’t believe me, I can give you an exaggerated example that clarifies my point.

    My other comments on this are:

    1. Why lock in a 5-year rate at 5.9%??? We have been below that for 9 or the last 10 years with variable or 1-year rates – and rates look like they are starting to decline.

    2. I agree that the Stone Dividend fund is a much better fund than the Stone G&I, but if you choose your investment strictly based on long-term risk/return and tax-deductibility, then there are many better choices.


  45. Dunk on October 9, 2007 at 9:48 pm

    Thanks for the comments, you’ve been instrumental in my decision. I’m not going forward with my original plan based on your comments. Thanks for clarifying! I’m going with the Firstline Matrix mortgage as this seems the best product/rate for my needs. The fixed rate is actually 5.69% for 5 years, and the LOC portion is at prime. Since the sub-prime meltdown in the US, this is the best rate I can find on the product I need (where the principle paydown automatically increases my LOC). I’m not comfortable with the 3 for 1 leverage of the B2B loan, so I’ll simply use the 74,500 of equity to invest into something. Of course I must now decide in what to invest that lump sum, so that it will cover the monthly interest on the LOC without using additional funds from my cash flow! I could do a dividend fund mutual fund that pays out monthly or every 3 months, or take your idea of withdrawing an amount each month to cover the interest, then re-investing the principle paydown each month. Maybe I’ll use the re-advanced principle portion (approx $400.00/mo) to service the interest owing on the LOC(489.00/mo) and fund the difference as a withdrawal from the mutual fund ($89)? Then I’m capitalizing the interest on interest plus the interest on the loan!
    It’s a lot to figure out, and I should probably do my homework and work with a financial planner! I’m in BC, but wonder if you could advise me and offer your services over the internet/phone?

    Many thanks again!

  46. Ed Rempel on October 14, 2007 at 4:43 pm

    Hi Dunk,

    Glad to hear it. I was not sure if my last post was too complicated.

    The Smith/Snyder does sound good, but includes the “4 Meaningless Steps”. Taking the distribution from the fund, paying it down on the mortgage, reborrowing to invest again, and then having to do the “Snyder Tax Calculation” with your tax return all do nothing at all. They are basically the same as taking money out of your left pocket and putting into your right pocket, then pulling it out again and putting it right back into your right pocket.

    Your mortgage is paid down very quickly, but you barely reduce your NON-deductible debt. This is because the investment loan becomes non-deductible by the amount of the non-taxable distribution. With the Stone G&I fund, in about 6 years, your mortgage is paid off but the entire investment loan is NON-deductible.

    What is more is that after about 6 years, your cost base of the fund declines to zero, so then the entire distribution is taxable as a capital gain. The distribution is no longer tax-preferred.

    The main disadvantage, however, is that wipes out most of the expected long term benefits. The long term expected benefits of the SM aned RM come from leaving your investment compound exponentially and tax-efficiently over many years. By constantly taking huge amounts out of the investment, you don’t get that compound growth.


  47. Ed Rempel on October 14, 2007 at 4:56 pm

    Hi Dunk,

    To answer your questions, I have just written several articles on SM mortgages that will be posted soon. Read them before you do your mortgage. There are better choices than Firstline and taking a 5-year fixed consistently costs much more thanvariable or 1-year mortgages. I’ve blogged about this many times on MDJ.

    Of the options you listed, I think the best is to readvance the $400 and only take $89 out of the investment. The other option is to increase your mortgage payment by $89/month, so you can readvance the entire $489 each month to pay all the interest. This will allow your investments to compound untouched. Your tax refund on the investment loan of $74,500 should be more than $89×12=$1,068, so you are not losing cash flow over the year.

    We do have some long distance clients with whom we do have phone appointments for planning meetings. It can work almost as well as face to face. We are very selective in who we work with, especially for long distance clients. We only want clients that are serious about their financial goals who we feel will work with us 100% long term.

    If this describes you, Dunk, call our office and ask for Ann with whom you can have a frank discussion about whether or not it makes sense for us to work together.


  48. Blink on November 13, 2007 at 5:44 pm


    Thank you for your insight! Regarding the Snyder/Smith Maneuver above – its true that the majority of your Stone G&I investment loan interest will no longer be tax deductible after taking distributions for 6 years. But what about the fact that you have nearly $150,000 (+compound interest) invested in the Stone Dividend fund after the 6 years that IS tax deductible? Not to mention – the fact that you have just paid off your entire mortgage (!) after only six years and will now have that entire amount (previously put toward your mortgage) to add to your monthly investments from here on in.

    Does that not far outweigh the fact that you are not able to write off the interest on the Stone G&I fund?

  49. Ed Rempel on November 14, 2007 at 1:51 am

    Hi Blink,

    Did you get your name from the book “Blink”?

    It does sound good at first, doesn’t it? The problem is that you have not paid off your mortgage at all. You have replaced it with an investment loan or a credit line that is NOT deductible.

    If you want to convert your mortgage into a non-decutible credit line, just call your bank and they can do it in 5 minutes. The main effect of the Smith/Snyder takes 6 years to do what you can do in 5 minutes with a call to your bank.

    If you make the call and convert your mortgage to a credit line, can you say that your mortgage is paid off? This is the exact same situation as the Smith/Snyder. After 6 years, you have NOT paid off your mortgage – just converted it to a non-deductible credit line.

    This happens by definition. Every dollar of distribution taken out and paid on the mortgage means one dollar of the investment loan is not deductible. There is no benefit at all from this.

    You also don’t have the cash flow that you had paid onto your mortgage, because you now have to pay down your non-deductible investment loan with it.

    Of course there is a benefit of borrowing the $150,000 that is deductible, but you could have invested more than this with the SM.

    The Smith/Snyder is better then doing nothing, of course, but the long term projected benefit is usually only a small fraction of the SM or the Rempel Maximum, if you do the same amount of leverage.

    In this example, with an adaptation of the Rempel Maximum, you could START with $224,250 invested in a proper equity fund, instead of getting $150,000 there over 6 years.

    This is because the huge benefits of the SM over the long term comes from having your investments compound exponentially over many years. If you keep taking money out of the investments and water down the long term compound growth, the benefit is far smaller.


  50. Dan Bajwa on January 22, 2008 at 1:21 pm

    Hi Guys,

    Is it possible to get a copy of the spreadsheet calculator to look at a RM scenario?

    Ed: How do I implement the RM at my local bank (Scotiabank)? Do I just ask for a personal loan? I have a STEP mortgage with a LOC for 90% loan to value. Currently paying approx $1400 principal per month with $17,000 available with the LOC.


  51. Ed Rempel on January 25, 2008 at 12:22 am

    Hi Dan,

    Since you are paying down $1,400/month, this would finance leverage of $240-280,000, depending on the interest rate at which you can borrow to invest. How you finance this depends on how you plan to invest it.

    We have several trust companies that do investment loans secured by mutual funds. If you are a DIYer, then you should talk to your investment company or brokerage firm to see what type of investment loan or margin account you can get.


  52. FrugalTrader on January 25, 2008 at 9:29 am

    Dan, also note that if you go 90% LTV that you will have to pay CMHC insurance. My personal limit is 80% LTV as it will avoid the extra cost of CMHC.

  53. Ed Rempel on March 18, 2008 at 6:39 pm

    Hi All,

    Did anyone see the article critical of the SM in the Toronto Star on the weekend? It is at: http://www.thestar.com/living/article/345271 .

    I found it quite funny and emailed the author, Bob Aaron. My comments were posted on a popular real estate blog: http://condopundit.com/wordpress/ , so I thought I should also pass on my comments here to MDJ readers.

    The article in the Star is just plain wrong. Dan White cannot possibly be a tax specialist and Bob Aaron should be embarrassed that he published an article without checking any facts.

    As a lawyer, I would assume he would be a professional and check his facts before publishing an article.

    Any accountant or tax professional would be able to correct all the errors in tax knowledge in the article. Here are the tax errors:

    1. The Smith Manoeuvre is a fancy name for borrowing to invest. The article seems to imply that CRA has a problem with borrowing to invest in stock market investments. For example, his article taken literally would mean that the Teachers Pension Plan would not be able to claim as a business expense any interest involved in buying Bell Canada. This is ridiculous. While it is technically correct that the Tax Act does say that there needs to be an expectation of profit excluding capital gains, taking this literally would exclude all borrowing to invest in any stock, since stocks rarely have very high dividends. The truth, however, is that CRA has never contested any interest expense in a simple borrowing to invest.

    2. Using your home as collateral for a loan can in no way make the home at risk of being considered a business asset. If you run a business from your home and claim more than 50% as a business asset, it may be an issue, buy just using it as collateral for an investment cannot possibly have such an effect.

    3. CRA is not money-hungry. In fact, there are many incentives built into the Tax Act available for knowledgeable people that know how to effectively apply it.

    Please ask any accountant or tax professional you know whether my facts above are correct or whether the Star article is correct. Any knowledgeable tax person who read your article would have found it as humorous as I did.

    I also read the original article by Dan White in REM magazine and it is obvious to any tax person that he is not a tax specialist. He does not appear to have any tax qualifications whatsoever. If he was a tax specialist, he would not be so blatantly wrong in all his tax interpretations. He is obviously just a real estate guy trying to persuade people to invest in real estate.

    I have found over the years that people are most critical of what they are also guilty of. I find it curious that Bob Aaron can publish an article where the entire point is based on tax errors on which he obviously did not check his facts, and then be so critical of anyone who may not be impartial. Could it be that Bob Aaron is makes his money as a real estate lawyer promoting real estate instead of market investments and that he also is not impartial?

    I am a financial advisor and accountant that uses the Smith Manoeuvre. I can tell you that the Smith Manoeuvre done properly (eg. if you don’t take distributions out of the fund) easily meets all CRA rules. It is just borrowing to invest, which is done by every company and every business owner in Canada every day.


  54. DAvid on March 18, 2008 at 11:41 pm

    Ed asks: “Did anyone see the article critical of the SM in the Toronto Star on the weekend?”

    Yes, it has been discussed at length at Canadian Capitalist. The same question of White’s knowledge or qualification was raised there.


  55. Hasanul Alam on March 21, 2008 at 1:11 pm


    Thanks for pointing the Toronto Star Article either I would miss this.

    The article quoted “It’s not good for the average person. Most of my clients wouldn’t understand it because it’s very complex.”

    I think if someone can properly explain this, many “average” person will understand. I encourage those who are interested first read the book and then attend a seminar by Ed where you can ask questions to Ed directly, face to face and clear your confusions.


  56. Graciela on April 3, 2008 at 12:51 pm

    Is there a financial planner in BC that understands the SM and the RM?
    Thanks in advance.

  57. […] tax efficient mutual funds. For me, I’m doing a slight twist where I’m going to use the credit line increases to fund the investment loan, thus giving me a larger lump sum to start with. Along with that, I’m going to invest in […]

  58. Man From Atlantis on July 20, 2008 at 11:31 pm

    Has anybody quantified the difference between doing the RM and just doing a regular leverage progam but use the refunds to pay down the mortgage? I know why the RM will beat the leverage program (if followed properly) and I know there are lots of vairables to consider. Who has done the comaprison and what were the results?

    Thank you.

  59. Sam on June 23, 2009 at 1:12 am

    Would youknow a firm familiar with this strategy in Montreal,Quebec.
    Please advise.

    Thank you,


  60. Aolis on July 6, 2009 at 10:43 pm

    I am very surprised that Ed Rempel is trying to promote active management mutual funds, especially on this site.

    “Investing with all-stars easily beats the average mutual fund. I’ve been studying them and get to meet them – and they are much smarter than me.”

    You suggest that you know who the all-stars are. Exactly how do we know that you are an all-star picker of managers?

    Finding funds that have done well in the past is very misleading. If take a hundred random fund managers, one of them will have done very well and one of them very poorly. Is that all-star power or random luck?

    The only thing we have any control over is the MER we pay and thus we should pay as little as possible, leading to index funds. This is especially true in Canada where the fees are ridiculously high. Pride in my fund manager’s salary doesn’t even enter into it.

  61. Ed Rempel on July 19, 2009 at 2:59 am

    Hi Sam,

    Sorry, I don’t know anyone doing this in Quebec. I’m not aware of anyone at all doing it, but there probably is someone. The SM does not work quite as well in Quebec either, because of the difference in tax rules.

    There is different licensing, as well, so at this point, Quebec is the only province in which we are not accepting clients. It is possible that we would sit down and figure this out some time if there was enough demand.


  62. Ed Rempel on July 19, 2009 at 3:43 am

    Hi Aolis,

    That’s a good question. The question of all-stars applies to any field of human endeavor. There are always some people that are superior, some below average and most are average.

    If you randomly take 100 hockey players, some will have better stats. Was that luck or skill?

    The statistics are a clue, but won’t on their own tell you. It takes a lot of research to figure this out. You need to watch them play, analyze their various skills, see how they play on a team, and see how good their “hockey sense” is.

    Persnally, I would rather have a team with Crosby, Malkin, Ovechkin on offense, Lidstrom and Pronger on defense, and Brodeur in goal – than an average of all NHL hockey players – wouldn’t you? They won’t win all their games, but I do believe these players have signficantly more skill than the average NHL hockey player, so this team should have a higher chance of winning.

    Each year, between 20-45% of fund managers beat the index, depending on which year and which index. This is considerably lower over many years, but there are always some that beat it even over many years.

    The stats are also misleading. Actively managed funds look better because of “survivorship” bias, but worse because most fund managers don’t even try to beat the index (Most are just salaried employees trying to keep their job )and because the stats always include index funds when comparing mutual funds to indexes. Of course 100% of index funds make less than the index, but the comarisons never exclude index funds or “closet index funds”.

    The best indication that there are superior investors is the classic Warren Buffett article. First of all, I don’t think anyone would doubt that Warren himself has superior skill. He has beaten his index by 11%/year compounded for 33 years – even when you take his return after tax and the S&P before tax.

    In his classic article, he wrote about a bunch of guys he bumped into that all massacred their index over decades – all by at least 5%/year compounded after all fees, and some by more than 15%/year compounded.

    His article was written in 1984, but the 3 managers he mentions that are still active today have all continued to massacre their index (2 of them are Warren and his partner.)

    This article is about value investors, who take advantage of a systematic inefficiency in stock markets – the tendency to misprice companies, especially those that are out of favour. This inefficiency still exists. In fact, the markets are more manic today than they were decades ago.

    Here is the link:


    After you read it, tell me would you rather have an index fund or have any of these guys as your fund manager?


  63. JJ on September 15, 2009 at 7:06 pm


    I have recently met with Rob Smith as well and have been run through the same scenario as Dunk. It all seemed fairly logical to me as well but now that I have read your explanation of the other side of that strategy I have begun to question its effectiveness also. I must admit I have read your Rempel Maximum a few times trying to wrap my head around it (as I have with so many components of the SM) and am still trying to grasp the concept. If I understand correctly, rather than go through the extra steps that Rob has suggested, it would be easier to just use a readvanceable LOC, maximizing my available equity initially rather than grow it gradually as my regular mortgage decreases. This way I get full advantage of the investment loan tax breaks immediately, and the benefits of compounding interest on the investment sooner. Correct? The one think I’m not sure of is with the Smith/Snyder method my mortgage will be paid off in 4 years, what would it take with the Rempel Maximum? House 420,000, mortgage $150,000 at $1040 month 4.99% with 15 years left on amort. Thoughts, recommendations? I’ve got around 20 years until I want to retire.



  64. Ed Rempel on September 20, 2009 at 8:47 pm

    Hi JJ,

    It is not really correct to say your mortgage is paid off with the Smith/Snyder, because it is replaced by a NON-deductible investment loan of the same amount – at a higher rate.

    I put your figures into our calculator. First, your mortgage has 18.4 years left, but you can refinance it now at 2.4%. That will reduce your amortization to 14.25 years.

    Then you can invest your available equity and do the SM. That would reduce your amortization to 12.3 years. More importantly, the projected net benefit of this strategy over 15 years is $568,000 (assuming 10% return and interest rates 1% higher than today).

    If you do the Rempel Maximum, your existing mortgage payment would cover the cost of an additional investment loan of $60,000. Investing that would reduce your amortization to 11.8 years and increase the projected net benefit to $681,000 after 15 years.

    At that point, all your debt would be tax deductible and you will not have touched your investments – just left them to compound.

    There is probably a better strategy by combining your entire financial picture, such as combining other debt, possibly redirecting RRSP contributions, etc.

    You should also project whether this strategy, plus what you are doing already, will be enough to give you the retirement that you want.


  65. JJ on September 20, 2009 at 11:36 pm

    Hi Ed,

    Thanks for your response. You’re right, to say my mortgage will be paid off is misleading, the mortgage will be converted to an investment loan of the same amount in that time period. We’re using some new numbers now to consolidate some debt and do some house renos. We’re looking at a new mortgage of 187,00, converted in 5.25 years and a projected 15 year benefit of 725,458. It’s my understanding that the interest on the loan with B2B is tax deductible but only on the ACB. And as the ACB goes down over time and the interest deductibility is reduced, the balance on the LOC converted debt from the mortgage goes up and therefore so does the interest deductibility on it. Or am I not understanding something properly here? For the Rempel Maximum, I’m unclear how the 60,000 investment loan gets used to reduce the amortization on the mortgage. How does that all work?

  66. JJ on September 21, 2009 at 2:01 pm

    Ed, is it the tax refunds from the interest deductibility of the $60,000 investment loan that get applied to the mortgage on an annual basis which brings the amort down to 11.8 years?

  67. Adam Stanley on September 25, 2009 at 1:37 pm

    Hi Ed,

    My wife and myself are both teachers and we’re at the top of our pay scale… we have no debt except for the mortgage and we have no major expenses in the next five years… everything major has been done to our house in the last two years… ie. bathrooms, roof, boiler, decks… I would love to start the Smith Manoeuvre but we don’t have 20% payed off of our mortgage… is there anyway to get a readvanceable mortgage or will we just have to wait for a couple more years and pay down the mortgage and have the value of the house increase???

    Thanks for your help!


    • FrugalTrader on September 25, 2009 at 1:57 pm

      Adam, IMO, the bare minimum equity required in your house to do the SM is 20%, otherwise, you’ll face expensive CMHC fees. If I were you, I would aggressively pay down the mortgage until your term is up, then get a new appraisal. If you are close to the 20% now, the new appraisal + paydown may put you over the threshold.

  68. Adam Stanley on September 27, 2009 at 2:15 pm

    Hey FT,

    Unfortuately my term is coming due in January and I really want to lock into a five year fixed term for 3.75 – 4.00 %. Is it possible to make a deal with a bank to start a readvanceable mortgage a couple of years into my term?


  69. FrugalTrader on September 27, 2009 at 2:25 pm

    Adam, if you switch midway through the term, you will most likely be charged heavy penalties. If you’re set on getting a readvanceable mortgage, have you considered signing a shorter term so that you can get a readvanceable mortgage in a few years instead of 5?

  70. DAvid on September 27, 2009 at 5:36 pm

    Speak to your bank. They may be prepared to make this work for you, even if they are not prepared to advance any funds until you hit the 80-20 point. Remember, if your house has increased in value, you will be calculating based on that price, not your mortgage amount.

    Also, some banks will allow you to move to a re-advancable product with minimum charge if you maintain your current mortgage within the new product. We only had to pay the Notary fees to register the HELOC against the house.


  71. Aolis on November 18, 2009 at 8:26 pm


    It is interesting that you mention hockey players. We have a pool at my work where we put togther our ideal team of NHL players and the team with the best stats wins the pool. No one pretends that it is anything other than gambling.

    You have three levels of betting going on. The actual company managers have to make the right business choices. The fund managers have to pick the right companies. And then the advisor has to pick the right fund managers. Index funds cut out the latter two levels and then invest in many companies to average out the first one.

    Warren Buffet also benefits from the “survivorship” bias. Finding one outlier “superinvestor” (or three) does not show anything. There is no way for you to demonstrate that he will do well in the future or that you can pick others like him. The worst part is that you will still charge me two to three percent each year just for trying.

    I’m not aiming to get the best returns possible compared to average returns. I’m want to avoid getting the worst returns. The one thing that I have the most control over is my investment costs so I’m going to focus on getting those as low as possible.

    Also, I asked Warren Buffett for advice and he told me to invest in low-cost index funds. If he is indeed a “Superinvestor”, then shouldn’t we follow his advice?


  72. Ed Rempel on November 20, 2009 at 1:45 am

    Hi JJ,

    I just noticed your post. Yes, it is the tax refund from the investment loan that reduces your mortgage amortization.

    Your mortgage may be gone in 5.25 years, but you have a NON-deductible investment loan at B2B at a higher rate than your mortgage. What do you plan to do with that?

    I would suggest that whatever your strategy, if you reinvest the distributions instead of paying them out, then your expected benefit is higher – and you can avoid all the “4 Meaningless Transactions”.


  73. Ed Rempel on November 20, 2009 at 2:00 am

    Hi Adam,

    I just noticed your post. You need 20% down to be able to get any of the readvanceable mortgages. So, FT is right that I would suggest to try to pay your mortgage down that far.

    You may be able to finance this in a different way, such as with an unsecured credit line or some creative strategy to get a much larger tax refund to pay down your mortgage (such as a larger RRSP loan). If you have no other debt and 2 good jobs, you should qualify for a good sized unsecured credit line.

    I would recommend to stick with a 1-year mortgage – whether or not you can get 20% down by January. We call 5-year mortgages the “5-year fixed mortgage trap”. Rates are almost always much higher. Based on a study, taking five 1-year mortgages instead of one 5-year mortgage would have saved you money 100% of the time since 1950. This has held true whether rates are rising or falling.

    We are getting 2.05% on a 1-year fixed now. If you take a 5-year fixed at 3.75%, then you would be paying more unless 1-year rates average 4.3% or more for years 2-5, which is quite unlikely.

    Staying short has added advantages, especially for people doing the SM, since it allows you to restructure your mortgage every year if anything changes in your life. This also allows you to negotiate extra goodies every year – free appraisal, unsecured credit line, etc.

    Since you are both teachers, the SM may be particularly well suited, because you get hardly any RRSP room. The SM gives you an alternative way of getting tax deductions and investing.


  74. Ed Rempel on November 20, 2009 at 3:40 am

    Hi Aolis,

    Okay, I’ll take Crosby, Malkin, Thornton, Lidstrom, Pronger & Luongo, and you can take an index of the average of all hockey players. How much would you like to bet?

    How many levels of successful choices did that take?

    Oh, I love a good debate about the efficiency of the market, Aolis.

    Most people have no trouble believing they can recognize superior talent in sports players and that these superior sports players will likely continue to be superior. Why is it hard to assume the same thing with super-investors?

    Buffett’s answer to you was specifically assuming you would not have time to invest and following your question ending with requests about which “specific sectors and percentages.” Could he have just been saying that you should buy a broad-based investment and “get back to work”?

    If Buffett actually thought that, then why does he not buy index funds? He really believes in the “Super-investors of Graham-and-Doddsville”. As he said in his debate at Columbia: “I think that you will find that a disproportionate number of successful coin-flippers in the investment world came from a very small village that could be called Graham-and-Doddsville.”

    You are right that one outlier does not prove anything, but it is faulty logic to assume that just because luck could explain someone’s success, it proves that all are luck.

    What about all the other investors in Buffett’s classic article that all massacred the index over long periods of time? Note that the ones that are still active continued to massacre the market since the article was published. What would possibly make you think they would suddenly lose it?

    Tell me, would you really prefer an index fund to having Warren Buffett himself manage your money?


  75. Aolis on November 23, 2009 at 5:24 pm


    The reality is that you get paid by selling actively managed mutual funds. It is in your interest to try and get me to chase higher returns by telling me about “super-investors” so that you can sell me a fund that charges a two percent annual fee of which you get a good portion. Three out of four canadians that follow that route will loose their bet.

    None of the results in your article took into account an annual MER. I suspect that some of the top investors would fall off the list at 3%.

    If I don’t have time to research companies, what makes you think I have the time to research fund managers or even financial planners that recommend fund managers?

    You can’t hold up Buffet as a shining example of a “super-investor” and tell me to ignore his advice. Even he doesn’t charge an annual fee to his investors like you are suggesting that I should pay.


  76. Ed Rempel on November 26, 2009 at 2:58 am

    Hi Aolis,

    All I can tell you is that there are fund managers that we believe are “All-star fund managers” that have beaten the markets by wide margins over long periods of time.

    We believe in this. Everyone on our team has 100% of our investments in exactly the same funds that we recommend to our clients. I have never – and expect never will – own an index investment.

    A mere MER of 2-3% would not have dropped any of Warren Buffett’s “Superinvestors” below the index. He did charged a fee of 25% of the return over 6% with his Buffett Partnership.

    To see how well Buffett did, he ran his partnership for 13 years and beat the DOW all 13. His return was 29.5%/year less his MER of 5.8%, so his investors made 23.8%/year. The DOW in the same period made only 7.4% (including dividends).

    The other’s also beat the indexes by wide margins. Here is the article if you want to read it. It’s a classic: http://www.edrempel.com/pdfs/superinvestors.pdf .


  77. Aolis on November 26, 2009 at 1:46 pm

    Hi Ed,

    I must sound so harsh. You clearly have a strong understanding of finance and are very knowledgable. I guess at this point we are going to have to disagree on the subject of fund MERs.

    No one is saying that an index fund is the best investment out there. However, it is a good low-cost investment in a variety of companies that make up part of the market. It won’t do the best but it won’t do the worst. This makes it an ideal investment to include in your long term planning for retirement. Once that base is there, there is no reason you can’t use some of your money to chase higher returns in actively managed funds or even individual stocks.

    Every fund company has one or more “value” funds. It is a fairly popular investment approach that many managers attempt. I’m sure I could find several such funds that have underperformed their associated index.

    “He did charged a fee of 25% of the return over 6% with his Buffett Partnership.”

    This is what I call walking the talk. He only gets paid if he actually makes you a profit. There is a big difference between this and charging people 2% rain or shine. If you truely can offer up superior advice and returns, then certainly you should only get paid if you do so. As it is now, MERs are only a “pay me and we’ll see how I do” fee.


  78. Ed Rempel on November 27, 2009 at 2:17 am

    Hi Aolis,

    No, I’m just passionate about what I believe. I think we mostly agree. I would not buy an average mutual fund, just like I would not buy an index fund.

    The index is essentially an average. Most mutual funds are average and usually underperform. Some are below average, but some are above average. Just like any other field involving humans, there are some fund managers that are all-stars.

    However, you are right that finding them is not necessarily that easy. To tell the difference between talent and skill, you actually need to find out exactly how they work and what is unique about them, so you can try to understand if his outperformance is likely to continue over time.

    For those unwilling to do the research or get the advice, an index fund is better than most other choices.

    While it is true that all-star fund managers are more likely to be value style fund managers, it is not true that most value style fund managers are all-stars.Every style has superior and inferior fund managers, but in addition to that, some investments styles are generally more effective than others.

    I agree, Buffett’s fee schedule really talks the talks. I’d love to find a younger version of him now with that kind of skill and fee schdule.


  79. Raj on February 25, 2010 at 1:02 am

    Hi Ed,

    I clearly understand SM.
    But Rempel Max formula is confusing to me.
    “They have a home worth $400,000 and a mortgage of $200,000 at 5% and are paying $1,169/month (25-year amortization). They can reborrow at prime of 6%, the investments average 10% long term and they are in a 40% tax bracket. Each mortgage payment pays down $336 of principal x 12 months / 6% = $67,200”

    Why do you do “$336 of principal x 12 months / 6% = $67,200”
    Per year payment of principal $336 x 12.
    Why divide by 6% ? What is the reason ?
    Who gives $67,200 ?

    Let’s say I give interest of 0.01 %
    Then the number becomes 336 x12 / (0.01 % 100)
    = 336 x 12 x 100 x 100
    = 3600 x 100 x 100
    = 36,000,000

    36 million.

    Is is some scheme ??
    I encourage you to explain.

  80. DAvid on February 25, 2010 at 12:46 pm

    I am happy to see you edited your post.

    You are correct. If you can find someone to loan you 36 million at 0.01% interest (a very unlikely event) you could pay the monthly interest that accrues with the $336 you have reduced your principal. Since you are unlikely to get such a wonderful interest rate, the $336 will service only $67,200 or thereabouts at 6%.

    The Rempel Maximum simply takes the income available from the reduction in principal on your home, and uses that amount to service ONLY the interest on an investment loan.

    The math is simple — the understanding is more difficult!


  81. Ed Rempel on February 28, 2010 at 1:53 am

    Hi Raj,

    David is right. However, I was confused by you saying prime was 6%. It is only 2.25%.

    I saw your post on a different site talking about the RRSP mortgage strategy where you quote 6% interest. If you take today’s rate for a secured credit line of prime +.5%, or 2.75%, and then add some to allow for rate to rise to a more normal level, then you should be able to invest nearly double the $67,200 and sill have all your interest payments covered.


  82. Ed Rempel on July 12, 2012 at 11:09 pm

    Hi Everyone,

    There have not been any posts on the Rempel Maximum thread for a while, which is unfortunate since this is probably a very good time to start this type of strategy.

    There is a lot of negative news out there, which makes the stock market quite cheap today. Today’s average P/E of only 12 is 30%-70% below the long term normal market valuation of a p/E of 15-20.

    The Rempel Maximum is often quite popular at the worst times when markets are very high, but not very popular at times like this that are such advantageous times to invest.

    It is a long term strategy, so the fear that is prevalent today should not matter. Waiting until things are more clear is a dreadful idea, since that means you are going to try to market time and buy in after the market has gone up a lot.

    The key point is that this type of strategy is only a good idea if you have a long term focus. Today the market is cheap and it won’t always be cheap. At some point in the future, valuations will be normal, which means the stock market and your investments should be much higher.

    Focusing on this and investing for the long term, instead of trying to time a good time to invest, is the key to making a strategy like this effective for you.


  83. Michael on March 19, 2013 at 12:11 am

    Ed, i have been reading this for a while today and i’m going to describe my situation below:

    so my situation:

    purchase price: 1.22 million
    mortgage: 910K
    rate: 2.89% 5 year fixed on mortgage
    3.00% (prime rate) on HELOC
    (getting everything from Scotiabank)

    I have the option of structuring the 910K like this according to my mortgage advisor:

    up to a max of 85% as a HELOC
    thus up to a min of 15% as mortgage

    based on my cash-flow i’m thinking of

    400K as HELOC
    510K as Mortgage

    (i don’t quite understand how the RM works yet, would you suggest I max out the HELOC at 85%? but the example below is going to according to taking out a 400k HELOC)

    All HELOC invested in monthly dividend paying stocks, allowing me to claim tax-credit on the interest paid on the HELOC

    My marginal tax rate = 46.41%
    I pay ~ 74k in income tax/year
    HELOC interest compounded monthly @ 3% = (0.03/12)*400K = 1000$/month or 12K/annum
    claimable tax credit = marginal tax rate * interest paid on leveraged investment – this works out to be 0.4641*12k=5569.2$
    Net interest paid/year = 6430.8$
    Real interest on HELOC after tax credit ~ 1.6077%

    Now to put the 400K to work (all in equities producing dividend > than 1.6%/annum)

    i would use the profit generated from the dividended to further payoff my mortgage.

    this would in turn increase the amount of HELOC available to me, which i take out every month and further increase my investment portfolio.

    now for the questions:
    1. how do i re-capitalize the interest on the HELOC? I can’t seem to warp my head around that. At 400k the interest alone is already 1000$/month. Tax rebate don’t come in until end of the year so this will affect my cashflow substantially.
    2. i’m thinking of using dividend ETFs instead of individual stocks to lower volatility/risk but from my readings on this website there is a concept called ROC which can affect the tax rebate, do you mind explaining that a little more?
    3. How can I implement your RM strategy?

  84. Ed Rempel on March 25, 2013 at 1:59 am

    Hi Michael,

    Where are you getting the $400K to invest from? The credit line is only tax deductible if you borrow the money and invest it.

    You owe $910K on your mortgage now, so it is best to keep all of that as a mortgage to get the lower rate and keep it separate from the tax deductible credit line.

    To answer your questions:

    1. You did not mention your payment, but assuming a 25-year amortization, your payment would be $4,263/month. That payment would pay $2,072 of principal on the mortgage each month. As soon as the mortgage payment is made, you should have $2,072 of equity available in the credit line portion, assuming you have a Scotia STEP.

    (Scotia STEP does not always work that way. It depends on several factors. In some cases, you may need to go in and sign to increase the credit available each month or you may need to wait until the end of the month to access the credit. Scotia is more awkward for the Smith Manoeuvre than most of the other banks.)

    Once you have the $2,072 available, you can borrow it to invest. That is the Plain Jane Smith Manoeuvre.

    You did not mention the limit on your STEP mortgage. If it is $976,000 (80%of your home value), then you have $65,000 you can borrow to invest right away. That is the top-up strategy.

    If you borrow the $65,000, you can capitalize the interest by investing a bit less each month and keeping enough credit available in your credit line to pay the interest on the $65,000. Also, if you invest the $2,072/month, the following month you can borrow enough from the credit line to pay the interest on it.

    In essence, the credit line is paying its own interest. That is capitalization. The tax rule is that if interest is tax deductible, then interest on the interest is also tax deductible.

    2. Are you thinking of investing for dividends in order to pay the interest? That is unnecessary if you are doing the Smith Manoeuvre and capitalizing the interest. Whether or not your investments pay 1.6% in dividends is irrelevant, since the interest is already paid by capitalizing it.

    Dividend investing is a reasonable strategy and generally fairly defensive. Personally, I invest differently. I diversify globally and try to invest 100% tax efficiently in order to avoid the annual “tax bleed” on the dividend income.

    If you invest in an ETF and you find out at the end of the year that part of the distribution was ROC, then part of your credit line becomes non-deductible – depending on what you did with the dividend. If you used it for a non-deductible purpose, like paying down your mortgage, then it will affect the deductibility of credit line. If you pay the dividend down on the credit line or reinvest it, then the credit line would still be deductible.

    Receiving the ROC can be a pain, since it is up to you to calculate the amount of the credit line that is still deductible. CRA will not calculate it. They expect you to. CRA might just deny the interest until you show them the proper calculation to support your claim. I can tell you that the calculation is more complicated than you would think.

    For example, if you receive $10,000/year in dividends and pay them down on your mortgage, and then find at year-end that $5,000 of the dividends were ROC, then the interest on $5,000 of your credit line is non-deductible. It is non-deductible as of year-end, but fully deductible the first month until you received your first dividend. So every month, the percentage of the interest that is deductible declines.

    In general, the best advice is to always reinvest 100% of any dividend you receive. Don’t pay it onto your mortgage – just reinvest it. Then the entire calculation is unnecessary and the credit line remains fully deductible. Then you can also clearly see that the amount of the dividend is irrelevant to the strategy, since it is just reinvested.

    3. The Rempel Maximum strategy may be too aggressive for you as a new investor, but here is how it would work. Your mortgage payment pays down $2,072/month of principal. Instead of investing the $2,072, you can get an investment loan that has interest-only payments of $2,072. The interest rate would probably be prime up 1% or lower, but for illustration purposes, let’s assume 4%. The $2,072 would cover the interest on an investment loan of $620,000 ($2,072*12/4%).

    The investment loan can take its payment directly from the credit line using the credit that becomes available after each mortgage payment. (You cannot take it directly from the credit line at Scotia, so you would need a separate chequing account to use only for the Rempel Maximum where you would put the credit available each month and then take the loan interest payment).

    You should get a “No Margin Call” loan. It is critically important that you will never be forced to sell investments at a market low to cover a margin call. Also, you should probably borrow a bit less than the full $620,000 so that you would still be able to cover the investment loan interest if interest rates rise.

    The advantage over the Plain Jane Smith Manoeuvre is that you have far more money invested. Also, the entire $2,072/month becomes tax deductible, since it is the interest on the $620,000 loan (rather than just the interest on the $2,072/month).

    No Margin Call investment loans are generally only available for mutual funds, but not for individual stocks or ETFs.

    Does that answer your questions, Michael? You are working with larger numbers, so there can be a big advantage for you to do these types of strategies over time. Just don’t forget that you are borrowing to invest, which is a risky strategy. You need to be able to remain invested through future bear markets, not only just the bull markets.


  85. Retina2020 on April 8, 2013 at 5:08 pm

    Hello Ed. Thanks again for all the info. I have the SM implemented using my current house and HELOC and the dividends are paying 1.3 times the interest on the HELOC before doing taxes and factoring in the dividends tax credit. So the SM right now is self sustaining. Does it make sense to look into Rempel Maximum if our SM is already self sustainable and we also have enough cash flow from our own occupation to cover the HELOC interest? I figured that the Rempel Maximum would result in less room from future investing through the HELOC since part of the HELOC would be dividend into a portion just to cover the investment portfolio interest. Thanks in advance.


  86. R Allen on May 17, 2013 at 7:25 pm

    Oh dear,

    It truly frightens me that there are certified financial planners out there pushing strategies for individuals to max out their leverage by borrowing against their homes to buy income securities in this low interest rate environment.

    This is like having a financial advisor telling you to borrow as much money as you can against your house and start investing by buying investments at record hights, so much for buy low, sell high. And why? simply because you can get an interest deduction on the loan.

    Interest rates are at all time lows, the chances of them going down rather than up over the next two years is doubtful. Yet, you’re encouraging people to take out a HELOC and borrow at a floating rate and invest in dividend paying stocks. This is taking on a ridiculous amount of interest rate risk.

    Dividend stocks (even the high quality blue chip ones) are closely tied to the bond market (the supposedly safe investment) which are both subject to interest rate risk. These securities have had a great run, as interest rates have been trending downwards for decades. For those that aren’t aware bonds/dividend stocks are inversely related to interest rates. As interest rates go down, prices go up and vice versa.

    Now, I know why people might promote this type of plan, it’s done great over the last 30 years and heck, that’s a great track record! Unfortunetly, the party is nearing an end. Rates can’t go much lower and aren’t expected to. The economy is already showing signs of improvement and as it gets up and running rates will begin to rise. This is going to be extremely painful for a lot of people who don’t know better.

    Another way to think about it is as an opportunity cost. As interest rates rise, bond yields will rise. All the income investors who have cramed into dividend stocks recently becuase they’re hungry for yield are going to have much better options in the bonds market when rates begin to normalize. Then a ton of these income investors will herd out of the dividend stocks back into their bonds for even higher yields, likely causing the dividend stocks to underperform.

    But not only is their a good chance their dividend stocks will underperform, they will also see the interest expense from the HELOC start creeping upwards (I guess you’ll be able to deduct more off you’re taxes!). No one wants to have a big ball of debt with a rising interest payment and possibly have their investment value decreasing or remaining flat but this is what I predict will likely occur.

    I’m no certified financial planner, but I do understand these securities and it terrifies me that people would be still recommending this strategy in a low interest rate environment. Please be careful.

    Good luck,

  87. Ed Rempel on May 18, 2013 at 11:51 pm

    Hi R Allan,

    I partly agree with you, but perhaps your post is on the wrong thread. If you read the article, you will see that I have never recommended investing in dividend stocks.

    Not that there is anything inherently wrong with dividend investing, but I agree with you that the many of the highest paying dividend stocks, such as utilities are very expensive today. You are probably right that they may underperform or have a significant downturn at some point.

    The strategy here, the Rempel Maximum, is a strategy for building maximum wealth. It is quite risky and only for people that are aggressive investors wanting to build serious wealth. It is a long term strategy, specifically because the risks are far lower long term. Returns of the stock markets are far more reliable long term (say 20+ years) than most people realize.

    This strategy is also about tax efficiency, so we are not focusing on dividend stocks. We do not need any income from the investments and we want long term compound growth, so any dividends or distributions are automatically reinvested anyway. Dividends would also reduce our tax refunds.

    The market is at an all-time high and interest rates are very low, but I don’t really see these as significant issues. Investors today seem to have forgotten that stock markets rise over time. Stock markets historically have hit all time highs in more than half of all years as they rise long term. The notable fact today is not that the markets are at an all-time high, but that they are barely above the 2000 all-time high. Stocks were overvalued them, but normally we would expect stock markets to triple or quadruple in a 13-year period of normal growth.

    Interest rates are very low and will likely rise, but we are not anticipating a huge rise. Leverage strategies like this should work fine even if interest rates doubled.

    In any event, this is a long term strategy designed to be held through various markets, so trying to time a start time is rarely helpful. You probably should avoid going too crazy when markets are very expensive, but stock markets in general are still relatively cheap today. There is no specific reason to be alarmed.

    Stocks markets historically have risen 3 of 4 years and have reliably produced strong gains over 20-year periods of time, regardless of when you start.


  88. Ed Rempel on May 19, 2013 at 12:29 am

    Hi Retina2020,

    Interest question about whether the Rempel Maximum makes sense for you. Before I answer it, I need to point out a few things.

    First, you are not doing the Smith Manoeuvre at all. You are doing ordinary leverage and using the dividends to pay your interest.

    With the Smith Manoeuvre, you borrow from the credit line to pay its own interest (capitalizing the interest) using credit made available by each of your mortgage payments. Dividends are optional.

    Using dividends changes the strategy so it focuses more on paying your mortgage down and less about building wealth.

    The dividends can be paid onto your mortgage and then you can reborrow the same amount from your credit line to reinvest. This pays your mortgage more quickly. However, the dividends mean you give up most or all of your tax refund. If you can claim a full refund on the interest and defer all or nearly all tax on the investment income, you can get a large refund each year, which you can pay onto your mortgage and reinvest.

    In short, having no dividends can avoid “tax bleeding” every year that reduces the long term growth of the strategy.

    Your question about whether the Rempel Maximum is right for you depends on your risk tolerance and how much you want to focus on maximum wealth building.

    In your case, it sounds like you are trying to invest relatively conservatively, so you may not be that aggressive of an investor or that focused on wealth building, so perhaps the Rempel Maximum is not right for you.

    The way you asked it is not an issue, though. You use a bit of the credit line to cover interest, but you should be able to start with a large lump sum from your credit line and/or an investment loan, so the total investments should be far higher with the Rempel Maximum.


  89. R Allen on May 19, 2013 at 1:56 pm

    Hi Ed,

    Fair enough on not investing in dividend stocks, and I do agree the market is currently not over expensive as a whole, and tend to be on the bullish side. I reread the article but still don’t quite follow how your RM differs other than you promot. But, this strategy is just subject to so many risks as we move from a downward interest rate environement to an upward interest rate environment.

    A few thoughts:

    1) Based on your comment above “we would expect stock markets to triple or quadruple in a 13-year period of normal growth” means you’re assuming you will achieve returns of 9-11.25%, this is above the average expected 7-9% market return. On prior comments I’ve read, you mention your ability to seek out above average fund managers, so perhaps these assumptions are reasonable. But are individuals reaping these benefits after paying the fund managers their fees and paying your fee for finding the above average managers?

    2) Are these fund managers that outperform using leverage within their funds to outperform their benchmarks? If this is the case the impact from rising rates would be even more.

    3) As interset rates increase your interest expense on your loan is rising. You say “Leverage strategies like this should work fine even if interest rates doubled.” Since the 60’s prime rate as average around 7-8%. We’re currently at 3%, the average is over double the current rate, my guess is we’ll continue to revert to the mean over the long term. Which means that spread between your cost of capital and your expected returns is shrinking. What spread is worth the chance of losing your home if things go wrong?

    4) My last comment I’ll make is on home values. This is something I’ve been planning on researching a bit closer, but all the textbooks I read tell me that as interest rates rise, home values should be expected to decline. If this were the case, how would this affect your HELOC/Investment loan? I don’t know the rules regarding this, but I imagine declining collateral while at max leverage is not ideal.

    I’m sure this strategy has performed very well in the past, I just fear people are expecting to see the same results going forward. There are a lot of articles out there promoting this strategy, and I don’t feel they are adequately highlighting all the risks involved.


  90. R Allen on May 19, 2013 at 2:00 pm

    My apologies for the terrible writing, I should proof read more…

  91. Ed Rempel on May 20, 2013 at 2:05 pm

    Hi Ron,

    I don’t actually understand your initial question. But here are my comments on your other questions:

    1) The long term returns of the global, Canadian and U.S. stock markets have been in the 10-11% per year range. The 7% figure you quoted is the after inflation figure. The “Siegel Constant” shows that from 1802, the US stock market has average 6.5% to 7% above inflation.

    2) The fund managers we invest with have all outperformed their indexes over their careers after all fees We believe that it is skill.

    They don’t use leverage within their funds.

    3) Your home is generally not at risk. As long as you can make your interest payments, you don’t lose your home. The Rempel Maximum does not require you to use your cash flow to make those payments, since you can capitalize them.

    Having said that, you may need to increase your mortgage payment to create enough principal from each mortgage payment to carry the loan, in the event that interest rates rise a lot. We generally plan today assuming rates are 1% higher than today’s rates. That may or may not be enough but it provides a buffer and leaves available untouched equity slowly building up now.

    Forecasting interest rates is a challenge. The average since the 1960s is only high because of one 20-year period in the 1970s-80s. If you look at inflation, it was around 2% from 1922 to 1972, then shot up over 20% and back down from 1972 to 1992, and then has been around 2% again for the last 20 years.

    So the average inflation varies widely depending on how much of that one 20-year period you include.

    Our expectation is that prime will only average a bit higher – perhaps around 4% for the next decade. There are a few major factors that we think will keep inflation low, specifically technology, demographics and globalization.

    Having said all that, we modeled leverage strategies at various interest rates. Here is the key rule of thumb:

    The breakeven point for most leverage strategies is that the investments need to make a long term return (say 20+ years) after tax of at least 2/3 the interest rate.

    Today, prime is 3.5% and investment loans are around 4%, so to break even we need our investments to make 2-2.5%/year after tax. That’s a very low hurdle!

    If prime goes to 4% or 5%, then we would need to make 3-3.5%/year.

    Back in the early 1990s, I wrote an introduction to Talbot Steven’s book “Conservative Leverage” which used 9% interest rate in it’s assumptions. Then the rate of return would have to be around 6%/year – still well below the long term stock market returns.

    4) If home values go down, banks will likely not reduce the credit limits on your secured credit lines (unless you want to refinance or sell). Investment loans use the investments as collateral, so they would not be affected by falling home values.

    Back in the early 1990s when the average home in Toronto fell by about 30%, banks did not reduce the limits on secured credit lines.

    In fact, if house prices fall, it will likely be very helpful if you have a large nest egg in equities to fall back on and provide you with some security.

    Regarding the risks, I agree with you that this article should really discuss them much more. Note that I did not write the article, even though it is about a strategy I developed.

    I’m not really scared of the risks you mentioned. The problems with borrowing to invest are mostly behavioural. The issue is sticking with it long term, especially through the inevitable market crashes.

    Investors may confidently do into leverage, but then panic after a large market decline. Now the market has historically always recovered with some time (just like it did this last time), but anyone that would panic and sell after a market crash should not do leverage.

    The other issue is that people tend to do it at exactly the wrong times (after the markets have been rising strongly for several years and are expensive) and they tend not to do it for the long term.

    In 2007 and 2008, there were ads everywhere promoting leverage – just before the crash. Those people lost money – but only if they sold.

    The risks of this strategy are mostly behavioural. Interest rates rising or house prices falling are not significant risks. The stock market is volatile, but has historically been quite reliable if you invest for 20+ years.

    However, if you sell even once in the next 20 years after a market crash, then you can wipe out all your gains.

    There are many leverage strategies and the Rempel Maximum is one of the most high risk, because it usually involves leveraging larger amounts. This can build a large nest egg and provide security for you in the future, but it is only for aggressive investors with long term time horizons that will be able to stay invested for the long term and not get caught up in market emotions.

    Does that answer your questions, Ron?


  92. R Allen on May 20, 2013 at 3:11 pm

    Thanks for the comments, I appreciate the thorough reply.

  93. AlexOntario on August 26, 2013 at 3:26 pm

    Hi Ed,

    In post 89 you stated:

    ‘In short, having no dividends can avoid “tax bleeding” every year that reduces the long term growth of the strategy.’

    From my interpretation of the CRA rules about loan deductibility is that your investments need to generate “investment income”.

    The specific paragraph is:

    ‘most interest you pay on money you borrow for investment purposes, but generally only as long as you use it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid.’

    Any thoughts?


  94. Ed Rempel on August 27, 2013 at 12:08 am

    Hi Alex.

    Good question. The requirement by CRA is that an investment COULD pay a dividend. In practice, CRA has accepted any stock or mutual fund, as long as it does not have a prospectus that specifically forbids paying a dividend. Even corporate class mutual funds that have not paid a taxable distribution in more than 10 years are fine.

    The quote from IT-533 is: “Normally, however, the CCRA considers interest costs in respect of funds borrowed to purchase common shares to be deductible on the basis that there is a reasonable expectation, at the time the shares are acquired, that the common shareholder will receive dividends.”


  95. kate on October 15, 2013 at 2:57 am

    Hi Ed,

    I love your posts. I’m a young home owner with a high risk tolerance. I have a $510k mortgage with a building heloc (now at $2k). My home has about $130k of downpayment (bought the house for $640k). I pay approximately $1175 in principal per month (5 year fixed – 3.15% int rate with bi weekly PMTs of $1325 incl tax). I want to implement the RM manouever….theoretically should I be able to borrow $14,112/0.05) = $280k? Which trusts will lend this? What type of product do I ask for?

  96. Ed Rempel on May 18, 2014 at 1:33 pm

    Hi Kate,

    Thanks for the kind words. Yes, your math for the Rempel Maximum is correct. You are paying $14,100/year in principal, so you could theoretically take out an investment loan in which the interest-only payment would be $14,100/year.

    You used 5%. Today, investment loans are about 4% (give or take). It is smart to allow for rates to rise a bit in your calculations, so using 5% to calculate the amount of the loan is a good idea. We generally use 1% higher than today’s rates.

    We have a couple trust companies that offer investment loans at compettiive rates with only very minor restrictions in our investment choices – B2B Bank (was B2B Trus until recently) and Canadian Western Trust. However, both work only with financial planners. I have not really looked into what would offer these to the general public, but am not aware of any.

    My one piece of advice is don’t consider the Rempel Maximum with a margin account or a margin call loan. You never want to be forced to sell at the bottom of the market.

    Whether or not the Rempel Maximum is right for you is another question. You said you have a high risk tolerance, which is good. The real test is how you will react after the first bear market. If you borrow $280,000 to invest and it plunges 30% or 40% (to $200,000 or even $170,000), will you be able to stick with your investments?

    For this to work for you, it is critical that you would stay confident after a large decline. Better yet, you should be able to take advantage of the buying opportunity. Large stock market declines are good buying opportunities dressed up in scary costumes.

    Sorry I couldn’t be more help in finding a trust company source for your loan. I’ve just never looked for a personal source.

    Good luck, Kate! It sounds like you are starting on the right track.


  97. Lance on June 29, 2014 at 10:23 pm

    Can you use the HELOC to fund a non-registered margin account and deduct both the interest from the HELOC and the margin account.

    I have a VB Margin account and right away it uses margin to fund the purchases (i.e. $10 transferred from HELOC, I buy $10 worth of shares, I use $5 of margin, and $5 of HELOC to buy the shares – and there is $5 of cash in the account).

    My concern is that the borrowed money on the HELOC isn’t going directly to purchase the assets, instead it is purchasing half of the asset and allowing for the margin to be provided by VB. In a sense, it is a loan, to support an investment loan. Your thoughts?

  98. Ed Rempel on June 30, 2014 at 1:14 am

    Hi Lance,

    Your tax issue is not the one you are worried about and your biggest risk is not the tax risk.

    There should not be an issue with deducting interest on both the HELOC and the margin account. The tax issue is the “current use” of the borrowed money. The money you borrowed for both sources sounds like it all went into an account that was only used for investing. If that is true, then both should be deductible.

    Your potential tax issue is if you take money or income out of the margin account for personal purposes. Then tracking your cash flow and prorating the deductibility may become issues.

    My concern for your strategy, though, is not mainly the tax issue. It is risk management. Borrowing to invest in a margin account is highly risky. The key to successful leveraged investing is being invested long term and never being forced to sell at the bottom of the market.

    If you borrow to invest for 20 years and even once are forced to sell at the bottom based on a margin call, you will almost definitely have a poor rate of return for the entire 20 years.

    We have many clients doing leverage, but none are in margin accounts or margin call loans. In 2008 with a 40% market drop, none had margin calls.

    On the upside, I think you are likely to lose money, but the interest on both the HELOC and the margin account should be deductible even after you are forced to sell your investments at a loss. :)


  99. Lance on June 30, 2014 at 1:21 am

    Thanks for the quick reply Ed. I am keeping enough credit on hand to handle a substantial market drop.

    When a drop like 40% happens, what are your thoughts on selling and then taking the capital loss in that year and rebuying at the lower price? This is assuming you want to own the underlying asset into retirement, a la Idiot Millionaire.

  100. FrugalTrader on June 30, 2014 at 8:55 am

    @Lance,you will need to be aware of the superficial loss rule:


  101. Ed Rempel on July 1, 2014 at 11:47 pm

    Hi Lance,

    Good to hear. Claiming a loss after a 40% drop may lead you to miss the big opportunity. A 40% drop in the stock market is almost definitely a historic buying opportunity. They are rare. There were only four 40% drops in the last 100 years (top to bottom), so your main focus in a buying opportunity like this with an asset you intend to hold until retirement should be on how much more you can buy before it bounces back.

    Claiming a capital loss is obviously a plus, but can be tricky. FT is right that you have to be aware of the superficial loss rules. If claiming the capital loss means you are out of your investment for 30 days at the bottom or the market, you should probably not do it. You may gain a tax deferral on claiming the loss, but could easily miss out on a big part of the recovery. The stock market has historically usually bounced back sharply after the bottom of large drops.

    We were able to do this at the end of 2008 with mutual funds, because we can switch to an identical mutual fund in a different form for 30 days. This allowed us to claim the capital loss without ever being out of our investment. In that case, it is a clear plus, but in most other cases, it can be very tricky and can take your eye off the huge buying opportunity.


  102. Ron on August 22, 2014 at 12:30 am

    Hi Ed,

    I’m planning to use SM (or RM) with dividend stocks because I like the flexibility of extra income if I need for an unforeseen expense. Otherwise, I would withdraw the dividend and contribute to my RRSP (I’m on a high tax bracket). I’m in Ontario, so my understanding is that the tax refund by contributing the SM / RM dividend to my RRSP is higher than the dividend tax, avoiding the “tax bleed” and leaving me with some extra money (that could be used to pay the mortgage and then reborrowed and reinvested) . Plus I get the tax refund from the tax deduction by using SM or RM. Wouldn’t this strategy produce a higher tax refund than just tax deferred investments (when contributing dividends to RRSP)?


  103. David on February 2, 2015 at 11:39 pm

    Hi Ed,

    Very interesting points and thanks for all the valuable knowledge you’ve shared. It’s refreshing to see, let alone in the comment section of an article :)


  104. David Keays on April 20, 2015 at 1:37 am

    Hi Ed,
    Quick question, I’m seriously considering this strategy in my next mortgage term and am curious which lender’s you find the easiest to manage with this strategy? You seem critical of Scotia’s STEP and Manulife ONE on the automation side of things, which are the good one’s in your experience? I think that only leaves BMO’s doesn’t it?

  105. Ed Rempel on July 26, 2015 at 10:16 pm

    Hi David,

    I just noticed your email here. Scotia has improved, but still has issues. Manulife One is the only one that will pay me for a referral, but is super-complicated. TD only readvances 65%. CIBC was always the only bank with no readvanceable mortgage. They have a new one now, but we have no experience with it yet. That leaves 3 banks with decent offerings in terms of mechanics of their mortgage.

    We regularly compare rates, fees, mechanics & service. Today, we are getting the best rate from BMO with a rate of 2.19% (sometimes lower) and recommending 2-year fixed.


  106. Victor Pidkowich on January 23, 2016 at 2:54 pm

    Hi Ed,

    Iv been absorbing your materials around the SM, as well before finding this blog have spent the last 10 months calling people all across Canada about this, especially lenders.

    This RM strategy is refreshing. Im aiming to do the RM or SM on 2 investment properties which I have possession on in March 2016. I understand the corporation vs personal thing and dont feel comfortable expressing the info here publicly but I will have access to HELOC products.

    In talking to lenders across the country I cant believe the difference in responses even talking with 2 different Scotia branches can have.

    I noticed your offer for Referral service some posts ago :

    “If you want a referral to a good contact at the best SM mortgage for you, we are still offering a free Ed’s Mortgage Referral Service. Just send us the answers to the 10 questions at: https://milliondollarjourney.com/ed-rempels-picks-for-the-best-smith-manoeuvre-mortgage-ii.htm , and we’ll figure out which SM mortgage is best for you today and refer you to our contact with that bank.

    I was hoping you maybe still do it or if your interested in hoping on the phone with me and Id be a happy to pay for your time. Its 2016 and this landscape has shifted so dang much and id be humbled to absorb some of your wisdom. Maybe we can even use me as an example for a blog post :) Id be open to that for sure to share the value to the community and bring this up to speed around the SM and your superior RM method.

    Talk soon.

    PS I also left a message on your firm’s voicemail.

  107. Tom on February 7, 2016 at 8:30 pm

    Hi Ed, Appreciate your contribution to this discussion. Do you have any suggestion who is offering the better personal loan rates for investing?

  108. Ed Rempel on September 5, 2016 at 2:20 pm

    Hi Victor,

    Thanks for the kind words.

    The Rempel Maximum can be a great strategy to build wealth long term. It is higher risk & higher potential reward than the Smith Manoeuvre, because it involves more leverage.

    The Rempel Maximum is closer to an apples-to-apples comparison with a rental property, since it involves borrowing to invest a large lump sum. The Smith Manoeuvre is investing a small amount regularly.

    I still offer Ed’s Mortgage Referral Service. It is a free service and focuses on the best mortgage & rates for the Smith Manoeuvre. It is on my blog under “Contact”.


  109. Ed Rempel on September 5, 2016 at 2:33 pm

    Hi Tom,

    I assume you are referring to personal investment loans, as opposed to a HELOC?

    There are several banks offering them. The interest rates are similar (roughly prime +1%). They use the investments as collateral, instead of your home. Almost all are “No Margin Call” loans, which is a critical feature.

    Doing the Smith Manoeuvre with margin call loans or margin accounts is far more risky. If even once in the next 20 years you get a margin call and are forced to sell at a market low after a crash, you can much end up losing money on the strategy.

    The various banks offering investment loans tend to have similar interest rates, but differ a lot in other feature. The 2 main ones are the amount they will lend you (which range from 30% to 100% of your net worth) and the type of payment (P+I or interest only).

    At this point, the banks only take mutual funds or segregated funds (mutual funds from insurance companies) as collateral for an investment loan, not individual stocks or ETFs. Most will only work with financial advisors.

    An investment loan is usually used for advanced Smith Manoeuvre strategies, such as the Rempel Maximum. They are higher risk and not suitable for everybody.

    If you want help with this, tell me on Ed’s Mortgage Referral Service (on my blog under “Contact”) what you are trying to do, Tom.


  110. SST on September 5, 2016 at 5:12 pm

    Hey, Ed — thanks for mentioning your new blog, on this blog, so much. Just wondering if, on your new blog, you make mention at all about the penalties and fines* imposed against you from the MFDA due to your misconduct of behaviour?

    People who are thinking of dealing with you probably should know who they are dealing with (e.g. why you “all of sudden” shut down your mutual fund biz and opened up a fee-only blog). Yeah, that’d be cool if the investor had full transparency of their “advisor”.

    Thanks, dude!

    *(have you paid your $125,000 fine yet?)

  111. Ed Rempel on September 5, 2016 at 6:33 pm

    Hey SST,

    I see you have read my new blog.

    Yes, I tell every client the story. Can’t discuss it on the internet. I paid my dues. All I can say in my defence is that my heart was in the right place. I was trying to help the guy.

    It has turned into a marvellous opportunity for me. It’s surprising how life turns out sometimes. It was always a pain for me (and a delay) having to get every blog post approved. Starting my own blog was always overwhelming.

    Now I find blogging to be very rewarding. I sincerely try to make a difference in someone’s life by sharing valuable information and answering questions. And there are so many kind people out there that make the effort to express appreciation when they find an article or an answer to their question helpful.


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