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  1. Pay off the mortgage as that is an investment you understand and are comfortable with.

    I still for the life of me can’t understand an emergency fund that high. If inflation averages 2% a year and you have about $164k in emergency money stuffed in a mattress, you are losing $3,280 per year. Please tell me that money is invested in something?

    Get an emergency line of credit, pay no interest and don’t have a bunch of money sitting around doing nothing. You may never have an emergency. You may never need it, but the line of credit is there.

    1. Yes part of the money is making money more than just sitting in a bank and is invested… and the other is making 2% not much but it’s better than nothing. It will all be gone in the next month and we never had that much sitting in there year after year it’s just grown the past few years and we felt it best to leave it where it was. Maybe not the best answer or what others would do but that’s what we did. What would you have done?

      1. For a temporary holding spot, the bank, under the mattress, makes no difference… glad you put it to use paying off the mortgage.

        If you had that much money and were going to hold on to it for more than a year I might investigate preferred shares of one of the big canadian banks. They are stable like bonds, and pay about 5%.

        If you put it in a savings account, or bond, they would pay next to nothing and the income would be taxed as interest income (one of the highest tax categories).

        1. A good chunk of it was making money that is tax free and the rest was in the bank at 2% which we will get a slip for… What are preferred shares at 5% and would you recommend them for short term or long term? I’m looking for ways to invest our money once this mortgage is gone.

          1. I buy common shares of Canadian companies that have a long history of raising their dividends.

            I have never bought preferred shares, but Garth Turner (who is much smarter than me) recommends them for people that want low risk and steady income. It sounds like you have an advisor and I am sure they could explain them to you. From what I gather, with bank preferred shares, the price is very stable and they pay about 5%.

            I like common shares of Canadian banks, Telecoms and utilities like Fortis Inc. I am fine with a little volatility because both the share price and the dividend payout raise over time.

          2. It’s not as scary as it seems. Email me any time. Remember, big stable Canadian companies that pay you increasing dividends. Even if the share price dips for a bit, you get paid while you wait for it to come back.

            Passive, increasing dividend income is great! 🙂

  2. I think paying off the mortgage is a good choice. Numbers aside, this way it’s over and done with, not to be worried about again. Now you can focus on investing and saving and not have to worry about owing one red cent to anyone!

    1. Gettin there Jake, so much to think about but we can safely look back now and say we are glad we did what we did. It’s alot of work and sometimes we can’t do everything but we don’t have to worry about the roof over our head anymore and that made it all worth it.

  3. Is the second emergency fund in another currency (I’m assuming pounds) because you are anticipating a financial emergency could come in that currency? If so, the exchange rate doesn’t really matter, because it’s just being spent in the foreign currency. If not, it would make sense to bring that money home now before exchange rates eat at any more of your money.

  4. Yeah, you’re asking about commissions! 🙂 I think you can start of with a small TD e-series portfolio to get your feet wet if you want, while learning more about building your own portfolio. I’m glad you’re focusing on TFSAs!

      1. You should be able to open one at your TD Bank. I wonder if you can get away with opening up one without opening a bank account.

        Other option is to start investing in ETFs. If you sign up with Questrade (free!), they also allow free ETF purchases. This requires you to be comfortable buying the ETFs. Depends on what your comfort level is. You can start with a basic portfolio with 4 ETFs which would give you a decent portfolio to start.

        1. The Mrs. actually has a TD account she hasn’t used in a million years but it’s still open. I wonder if she could just use that. Ya, that’s all I want to do is open something and play around until I get a grip.

  5. The Smith Manoeuvre – it’s an interesting idea, but apparently quite legendary in the banking community. 🙂

  6. I’m one who prefers to be mortgage free. After it’s paid off you can always invest the money that would otherwise have went to the payments. Sleeping well at night is more important than the gains that could be made in the market. Plus investments can cause sleepless nights if they’re not behaving.

  7. Impressed by your net worth and I love that a goal of yours is to spend more quality time together as a couple, something money can’t buy.:-)

  8. Wow!!!! Things are really looking good!!! I’m going to have to look into those two accounts you mentioned to try to understand what they are…. but from you have said the Manulife One is not something we should be going anywhere near!!! I’m so glad you will be paying off the mortgage… I’m jealous too. We are so far from that one it isn’t funny. I plan to look for some financial books at the library book sale in the spring so I can try to educate myself on these things, got the original Wealthy Barber in the fall sale. I’m looking at where we are right now as I got a survey in the mail from Ipsos Reid on finances to fill out. For what ever reason I seem to get one of these every year….. I don’t think it will take too long to get your emergency savings back up once the mortgage is done as you will have those mortgage payments you’re not making any more to help you…..At least while you are considering the options…..

  9. I am not familiar with either of those types of accounts you mentioned but they don’t seem like something I’d want to do.

    I think it would be hard to pay out most of your savings, but once the mortgage is gone, you will hardly have any expenses. That must be an amazing feeling!

  10. We did the Manulife One account. It worked when we had two incomes and childless. However as the family grew, and down to one income — it was not a good fit for us. We didn’t have the time to scrutinize our account and spending with a newborn and unexpected baby expenses. It has to be to worst financial mistake we’ve made so far. With a standard account, we are in good financial health, and satisfied. Note: financial advisers make a commission off your Manulife One Account!

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