Hi graywings, I started reading this thread without noting the dates the posts were written. Dave, I don't want to put you on the spot, but I am wondering how the accounts you spoke of in 2007, the 72c Guaranteed Savings accounts (equity-indexed fixed life contract, or annuity contract) have weathered over the last three years. Heh... you can "put me on the spot" in this regard *ANY* time ;~) Both the equity indexed life & annuity products have *VERY* strongly outperformed the unprotected stock index markets over the same periods of time (since 2007. In fact, going back from today to almost as far as you'd like.) Their design is that they capture & credit any annual upside (to a maximum gain,) and lock that amount permanently to your credit. On any years with a downside, your account sits tight with no losses at all (guaranteed by the insured backings of the company reserves and the state's guarantee association (each state's equivalent of a regional "FDIC" in essence.) If you put $100,000 in the S&P 500 for the last decade, you'd actually be holding a bit LESS than $100,000 today (not deducting the tax or management fees that may also be applied.) The same $100,000 in an insured indexing account would be approximately $211,768, net of everything (taxes & fees,) *OR* about an average annual tax-free rate of return of 7.06% Alternatively, those folks who decided to take their working capital OUT of growth, and put it into their real estate equity, have been double-stung; Not only have they gained nothing toward retirement, their equity values have decayed from 10-30% (depending on the area.) The clients who've been with us the last 3-5 years have been rather relieved, ecstatic, and pleasantly bored, all at the same time. Its a very nice financial reality to provide. Cheers, Dave Donhoff Leverage Planner (PS. to re-paraphrase celticmoon; When everyone else's retirement nest-egg is drowning deep underwater... its kinda nice to be riding on the back of a "duck" ;~)

As U.S. homeowners can deduct mortgage interest, if your mortgage interest is 6% and you're in 33% marginal (i.e. top, for you) tax bracket, 33% of that 6% is 2%, leaving you with a net cost of mortgage of 4%. In Canada we can't deduct mortgage interest - but when we sell owner-occupied home, capital gain is free of tax. If you own a bond (taxable-interest type) paying 5% and you're in 20% tax bracket, your after-tax rate of return is 20% less than your apparent earnings, or 4% - outside of tax-deferred IRA. The costs of owning a home are larger than was originally suggested: there's higher insurance rates (if you're in an apt. you insure only your furnishings), costs of a new roof on occasion, repairing cracked basement wall, replacement of furnace, etc. Many financial advisors in Canada say that every worker should own our tax-deferred retirement plan - but some of us are less than enthusiastic about them, for reasons that relate to lower tax rates on certain types of return on non-retirement-related investments, both in terms of current income and on cashing of assets later. Some homeowners seem to forget that, were their money not invested in a home, it could be earning (whatever) rate of return invested elsewhere. Out of which they would need to deduct their costs of rental. Plus (expected) increased value of their home on sale after a number of years. Many clergy in our country used to live in church-owned homes and some felt that such homes did not relate well to familes with 4 kids and empty-nesters, plus they said that they wanted to profit from the increased value of homes, over a number of years ... so they wanted to own their own homes (and the church pays tax-free rental allowance). I said that they'd profit a lot lower than they figured ... for clergy move fairly often, and each move would usually require sale of their current home ... with the real estate people pocketing a substantial portion of the increased value of the home since the last move. If I'm a renter and get transferred ... or downsized, with no current local job prospects, requiring a move to secure satisfactory employment, if I rent an apt., all I need do is hire a moving truck. Not so if I own a home. There are many nuances that relate to the wisdom of buying a home or renting, or paying down a mortgage rather than ivesting for retirement, one of them being having enough asset on hand that one can survive fo half a year or so with no paycheque, if required. I don't always have it, but I have a line of credit at the bank, unused at the moment, that costs me nothing to maintain,which I can draw on as I choose. Some years ago when I asked a local bank whether I could make a loan, using strong assets as collateral, they said that would be O.K. - so I moved about 2,500 miles to take a commission sales position. When I went to that bank for a loan and they wanted to know what rate of income I'd have ... they turned me down for the loan! So ... I had to withdraw some of my tax-deferred retirement asset (on which I paid minimal tax, having low income that year). Good wishes as you pursue greater knowledge about how money works: not only does enhanced knowledge increase one's power ... it pays well, on occasion . ole joyful

Wow! Thanks for all the additional feedback. You've given me even more to think about, although it all seems a little bit clearer now. whode, you are definitely right that putting the money into principal makes it less accessible. Though we are generally very disciplined, there is a high chance that we would dip into a more accessible savings account, or perhaps not be as disciplined about putting the money away in the first place. By setting our mortgage minimum (the real mortgage payment + our self imposed principal payment) we don't seem to waver much if ever. I have to think that whether we pay off the mortgage ASAP, build up savings, or do a little of both, we are still heading in the right direction. I have so many friends who discuss why you shouldn't pay off your mortgage, but then they don't/can't save any money on the side so they really aren't getting ahead on any level, are they? Thanks again. Q

Hi again everyone, I know that few of them have ever conned others, but ... have you ever conned yourself? Confession time: I just conned myself, big time. I had 20 shares of that stock, and the cashout value is around $70. each. At one time I'd done the math accurately, when I was thinking of sending the shares in to the transfer agent. But then I got thinking about the way that I could avoid (not "evade" - there are big fines and sometimes one goes to jail when found doing that) paying tax on any of the capital gain. Somewhere in there I began thinking that the amount was over $10,000. - which is in the neighbourhood of my charitable contributions of varios types for a couple of years. I'm surprised at myself at how long I went along thinking this - that, while I'd receive the charitable receipt for the full amount from the London Foundation, which was then to issue something like 20 cheques to the various charities, and I'd like two cheques to each, one for this year and one for next year, ... blah, blah, blah. Then - I remebered what the actual amount was - enough for regular contribution to about four of the charities that I regularly support - and that for only this year. Sort of brings one down to earth with a loud "smack". Fortunately, I've funded the account that I write most of the annual cheques from, so can proceed with the usual system, with slight alteration. You can all have a good laugh now, at Ed's (we hope temporary) stupidity!? Hope you all have a lovely, eventful weekend and preparation for the holiday. ole joyful