Interview Presentation of The Smith Manoeuvre: Best Practices
The Plain Jane Smith Manoeuvre: this is simply taking the mortgage payment that you are already making anyways – nothing else – and putting it to work in order to create valuable tax deductions which lead to tax refunds allowing you to prepay the mortgage once a year at minimum and therefore being rid of that expensive, non-deductible mortgage debt much quicker than otherwise. And in order to generate those deductions you must invest, therefore improving your net worth on a monthly basis and building up retirement savings to allow you to avoid being forced to downsize or having to sell the house back to the bank in retirement.
All of this starts happening now. Not in 25 years, not next year, but now.
That being said there are ways to speed the process up considerably – generate bigger tax deductions and refunds faster, eliminate the non-deductible mortgage debt faster, and build your nest egg faster. And again, all without new or additional money from you. Without anything more than what you already have or are already laying out each month. You just need to restructure your financial affairs and make your money work more than once.
We call them accelerators, and there are a number of them. Namely the Debt Swap, the Cash Flow Diversion, the Cash Flow Dam, the DRiP and Prime the Pump.