Debt Free in 30

Latest Episodes:

181 – The Rule of 72 Feb 17, 2018

Show notes

On more than one occasion, we've said that compound interest is great for savings, but terrible for debt. On today's show, Ted Michalos shares a simple math trick to help you easily calculate the impact interest has on the debt you carry.

The trick is called the Rule of 72.

You take the number 72 and you divide it by the interest rate that you're considering.

Why does this matter? We explain on today's podcast.

180 – How to Use Loyalty Programs to Balance Your Budget Feb 10, 2018

Show notes

With the launch of the new PC Optimum program, we're taking the opportunity to examine just how Canadians can make the most of loyalty cards and points programs. While there are advantages to in-store reward programs, if you're not careful, they can actually cause you to overspend.

Our special guest host on today's podcast, Sharon Hoyes, talks with our guest, Kimberly Hill, about how to use loyalty programs wisely to balance your budget.

179 – Talking Debt with Scott Terrio Feb 03, 2018

Show notes

Trying to make debt an everyday topic is difficult. What's more, most people who are in my line of work have an accounting background. As such, there's a tendency to be more numbers-focused than say, story-telling, for example.

But a year ago, I came across an individual on my Twitter feed, who was commenting on personal finance issues and the sorts of situations that my clients face. He's even got an impressive social media follower base because of it.

His name is Scott Terrio. He's a regular contributor to Macleans, BNN, and many more media outlets. I'm happy to share that he's also the newest member of the Hoyes Michalos team. Scott is our new Manager of Consumer Insolvency and he's our guest on today's podcast, as we talk debt.

178 – How to Pay Down Massive Debt Jan 27, 2018

Show notes

You hear the stories about the person who paid off $100,000 in debt in just 3 years; sounds great, but how did they do it, and is that realistic for the average person?

The short answer is no, if you earn $25,000 per year it is mathematically impossible to pay off $100,000 in three years, but you do have options, which we discuss on today's show.

177 – Minimum Payments on Credit Cards are Keeping You in Debt Jan 19, 2018

Show notes

If you think your finances are under control because you're keeping up with minimum monthly payments on credit card debt, think again. To become debt free, you need to pay down more of your balances. How do minimum payments work and why do they keep you in debt? And what do you do if all you can afford are the minimum payments or less? We discuss that on today's podcast.

176 – The Wealthy Renter with Alex Avery Jan 13, 2018

Show notes

We hear the same thing repeatedly. If you rent, you're throwing away your money. Why? Because you have nothing to show for it at the end of the month. On the other hand, if you own your home, you're paying down your mortgage and building equity. But is this true? Why can't you build wealth by renting? Today's guest thinks you can.

Some points to consider, according to Alex Avery:

It's not one-size-fits-all. Buying isn't for everyone. Neither is renting. Consider how long you expect to be in a particular location. If you have precarious employment, or know that a job will be moving you to another location, renting is a more suitable choice. On the other hand, if you know exactly where your life will be in the next 10 years and you'll have children, who will go to school, then it's probably better to invest in a home.
When making the decision to rent or buy, don't forget all the negative carrying costs of owning and selling a home. Count that against your 'investment' decision. Be aware of you biases that might make you want to scale up, buy more, renovate more. Alex uses the term investment creep to explain this bias.
Understand how the pro ownership lobby can influence your decision - from the government, to real estate agents, even your friends talking around the dinner table. Don't be persuaded by someone else giving you advice that reflects their objectives, not yours.

175 – Which Debts Should You Pay First? Jan 06, 2018

Show notes

Because it's not the level of debt that causes the problem necessarily. It's whether or not you can service it. On show #174, we gave the example of someone with a $500,000 mortgage and 25-year amortization. If the interest on it went from 3.29% to 4.29%, the monthly payment would go from $2,400 to just over $2,700. That's about an 11% increase.

On today's show we discuss which debts should you pay first, and how to make that decision.

174 – Seeds of a Debt Crisis: 2017 Debt Statistics and 2018 Predictions Dec 30, 2017

Show notes

What will happen in 2018 that could water the seeds of a financial crisis? Ted Michalos and Doug Hoyes believe there are three big stories to watch in 2018:

Minimum wage going up in Ontario from $11.60 to $14.00, effective January 1st. This means any employer that is already marginal or has very tight margins is probably going to employ fewer people.
Debt. According to the Canadian Payroll Association's September 2017 survey, 49% of Ontarians are living paycheque to paycheque and 43% of them save less than 5% of their earnings. Canadians are also the most indebted in the world by at least one measure, as household debt is more than our GDP.
Real estate value and mortgage interest rates. The Bank of Canada predicts that 47% of Canadian real estate mortgages will renew in 2018 and a lot of people are going to be facing an increase because rates are higher than they were a year ago.

For more insight and detailed breakdown of our predictions for 2018, tune into the podcast.

173 – How To Avoid Being House Poor Dec 23, 2017

Show notes

On today's podcast we explain how, even though your house may have increased in value, if you don't have enough cash to meet your monthly expenses, you are house rich but cash poor.

We give four tips to avoid being house poor. The most important tip: decide what kind of life you want, and use that decision to decide on the house you really need.

172 – The Perfect Christmas With Heather Cudmore Dec 16, 2017

Show notes

Every year, the focus of the holiday season is on consumerism and the need to spend money on the perfect gifts, the perfect decorations and creating the perfect dinner. And every year, Canadians end up spending too much money, putting them at risk for financial difficulties once the holiday season is over.

On today's show we rebroadcast a podcast from 2015 where my guest is Heather Cudmore, who at the time was the manager of Credit Counselling at Carizon Family Services in Kitchener, and is now a credit counsellor in the Hoyes Michalos London office.

Heather has lots of great advice on how to make a memorable Christmas, without spending a lot of money.

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