Yesterday there was an article on CBC about a real estate agent that has
been hit hard by COVID-19. She needs to sell her house and is being hit
with a $30 000 penalty for breaking her mortgage. This is not a new
situation that she finds herself in.

$30K Penalty for breaking mortgage…..Read article here


You can find articles online from before the COVID pandemic such as:

This woman owes $15K after breaking mortgage agreement…..read more here

and an article in the Globe and Mail from 2003

The hidden trap of mortgage penalties….read more here

Seeing this article reminded me of a fundamental question I ask as a financial planner… Who is holding your money hostage?

There are two types of assets most of us invest in:

Non-liquid assets are perceived to be safer than liquid investments because they appear to hold their value and are less subject to market volatility. These include real estate, collector cars, boats, fine art, even RRSP’s. The downside to investing primarily in non-liquid assets, as the real estate agent found out, is that your money is held hostage. It takes time and sometimes you have to pay ransom to convert these assets to cash.

Liquid assets on the other hand can be sold and the cash can be back in your bank account within 48 hours.

To make sure you don’t find yourself in the same scenario, or to make sure you have the right mix of liquid and non-liquid investments, you can set up a complimentary, 30-minute phone consultation at
calendly.com/mjhfinancial OR email me at michael@mjhfinancial.ca .