Dave Chilton

My big observation about a lot of this, not as it applies to the Smith maneuver specifically, but just leverage to buy equities, for example, leverage to buy any kind of risk oriented is that people's risk tolerance level is difficult to assess at the best of times.

but it is really tough to assess how they're going to handle volatility when it's borrowed money that they have invested.

In general, sitting back at my advanced age, I've found people don't handle it well.

If you think it's stressful watching your own money go down in value, try watching the bank's money.

go down in value.

People are more inclined to panic, want to stop the pain, et cetera.

One of my staffers has been through it and made that exact mistake at selling low because she did get a little panicked about all of this.

So I think you really have to know the client well, know yourself well.

The problem is it's hard to know how you're going to react to extreme volatility with borrowed money.

Now, going back to the Smith maneuver, it often ties into the mortgage in some way, shape or form.

In essence, it's used to try to make the mortgage interest tax deductible.

Again, walk us through that.

No, I agree.

Now, when you talk about cash damming, that's an expression you're hearing more and more.

Define that for our listeners.

No, it is.

Psychologically, it can be very, very challenging.

Okay.

You're dealing with educating a group of 30, 35 year olds, Canadians, normal income, maybe even a little bit higher than normal income.

What's the starting spot?