I wanted to take a moment to share what I have learned.
The Smith Manoeuvre
There is a strategy that revolves around your mortgage that can save on taxes and allow you to build a far larger retirement fund.
It focuses on making it so I can write off (tax deduction) the interest I pay on my personal mortgage as fast as possible and save for retirement earlier.
Here is the crazy part. Over thirty years I can create an extra $670,000 in tax deductions and reduce my tax bill by $300,000 (this is not because I am self-employed but rather because of making the interest tax deductible).
That alone is enough for me to want to implement the strategy because with two kids I need all the help I can get!
Where things get really exciting is if I reinvest my principal paydown (debt I pay off on my house) and the tax refunds I get (due to positioning my mortgage interest as being tax deductible).
By reinvesting the principal paydown and tax refunds, assuming an 8% return over 30 years (I’ll be 61) the investments would grow to $2,240,000 and the total net worth created for retirement would be nearly $1,700,000.
Plan for Retirement
I do not know about you but I am worried the dream of retirement is only going to get harder to reach. Housing will be more expensive along with food, tuition, utilities ect.
I figure if I believe in this enough for my own family I should share it.
I have extra copies of the book (The Smith Manoeuvre by Fraser Smith), if you want a copy send me a message with your address and I will mail you a copy of the book.