Episode 197: Is Manulife One a Wealth Shortcut—or a Debt Trap?

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What if your mortgage, checking account, and line of credit were all combined into one powerful tool—could it really speed up your debt freedom and build wealth faster, or just cost you more in the long run?

Many Canadians are intrigued by the Manulife One account, a product that promises simplicity, flexibility, and cash flow efficiency. On the surface, it looks like a debt optimizer’s dream—every dollar you earn instantly works to reduce interest. But behind the appeal lie real risks: higher rates, temptation to overspend, and the need for disciplined money management. If you’ve ever wondered whether this account is a smart wealth-building strategy or an expensive convenience, this episode breaks down the truth.

In this conversation, you’ll discover:

• Why the Manulife One account can accelerate mortgage payoff and unlock advanced wealth strategies like the Smith Maneuver.
• The hidden pitfalls that trip up borrowers—and how to know if this tool is a fit for your financial discipline.
• An alternative approach using a traditional mortgage with a re-advanceable HELOC that may give you lower rates while still opening doors to long-term wealth.

Press play now to learn whether Manulife One is your secret weapon—or if there’s a smarter path to financial freedom waiting for you.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
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Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

Achieving financial freedom in Canada requires more than paying down a mortgage—it’s about creating a holistic Canadian wealth plan that aligns with your goals. Tools like the Manulife One account can streamline cash flow, strengthen debt management, and even open doors to strategies like the Smith Maneuver, where home equity is re-leveraged for investment and wealth building. Pairing this with RRSP optimization, salary vs dividends in Canada decisions, and corporate wealth planning helps entrepreneurs balance personal vs corporate tax planning while building long-term resilience. From real estate investing in Canada to tax-efficient investing, financial buckets, and capital gains strategies, the right financial systems for entrepreneurs can turn a modest lifestyle wealth approach into a path toward early retirement strategy, legacy planning in Canada, and true financial independence Canada. Whether it’s choosing between real estate vs renting, maximizing passive income planning, or using retirement planning tools, setting a clear financial vision with diversified wealth building strategies Canada is key to growing and protecting wealth across generations.

Transcript:

What if your mortgage, your checking account, and your line of credit were all rolled into one? That’s the promise of the Manual Life One account, a tool some optimizers swear by to crush debt faster and streamline cash flow. But is it really a wealth secret or just another higher priced convenience? In today’s episode, we’re going to unpack the benefits that make the Manual Life One attractive.

the risks that can leave some borrowers stuck and I’ll share my own strategy using a traditional mortgage with a re-advanceable HELOC to not only pay off debt faster but to also unlock the Smith maneuver for long-term wealth building. All right, my friends, we’re gonna dig in here. You are stuck here just with Kyle. John is out of town right now and we are gonna dig into the Manual Life One account. Now.

First off, I have had this thing on my radar for over a decade, probably close to two decades. And it really stemmed from my earlier years. As you may know from earlier episodes, if you dig in and dig back, you’ll know that I was very traditional in paying off the mortgage and getting it done and out of the way. And the Manual Life One account always felt like a good move. The parts that I really like about it is that

you are utilizing essentially all of the money that comes in your world before you send it off to do their jobs. I love that idea. I love the strategy. And because when you deposit income into your accounts, typically what we do is we let them sit around in a checking or a savings account. We’re not really earning much in interest, probably nothing in interest. And then eventually throughout the month, we’re going to send those dollars off to do their jobs.

What we often don’t do is we don’t take those dollars and then throw them directly onto our primary home mortgage. Now, to be clear here, this is the part that I think is most important. And this Manulife One account is really about trying to figure out how you could pay less interest on your primary mortgage and actually open up the door to potentially incorporating things like the Smith maneuver. Now, a lot of people who have the Manulife One account are more like old Kyle.

Okay, what do I mean by that? The old Kyle was actually budgeting each week to take extra money from my paycheck and my spouse’s paycheck each and every week in order to pay down the mortgage with really no plan to utilize any of the equity in my home. That does not make you a bad person if that is who you are and who you wanna be. However, for me over time, what I recognize is that actually that home equity could be useful to me.

And I could actually borrow that home equity in order to make investments. So that would be considered an investment loan. And as long as the intent and the goal is to earn income, we could then write off the interest on that portion that we are re-leveraging against our primary home. Great move. And the part that I really love here is the Manual Life One account actually could be utilized for that purpose as well. And it could be really helpful.

The really tough part here is making sure that you are keeping track of things. Okay, it’s really easy for the wheels to fall off if we don’t really have a plan. So if right now you’re listening to this podcast and let’s say cash comes in and it goes out every month and you’re not sure where it’s going and you’re not sure what you’re spending it on, this is probably not the account for you to be exploring, okay? It will actually put you in a much worse scenario if you’re unsure where the money’s going.

It’s very easy for you to fall behind, right? Because now you’re tracking how much you actually owe in total on these connected accounts. And you really have to be able to sift through that and understand what goes where, all right? Now, if you add income to your account, it’s automatically going to bring down your debt on your home, which is great. I love that. That means you’re going to reduce the daily interest

on that account and over time that can add up to quite a bit of savings. However, if that income comes in and it’s gone pretty much right as soon as it hits that account, you’re not really going to see any benefits here, right? So this is really important for people that have income coming in, that income is greater than what is going out. Okay. So, I mean, there’s an argument to be made that if you had

5,000 coming in and then by the end of the month, the 5,000 is gone, that you could still save interest, right? If you’re paying all your bills by the end of the month, that could still help. However, we’ll talk later in this episode about why that might not be the best move and why, you you might not save as much as you maybe thought you would, okay?

Now, one thing, and I wanna clarify here, and I love the folks over at Manual Life, they’re great. And actually, by the way, because we are licensed, we are able to help people get into Manual Life One products, for those that it makes sense for. However, when folks reach out to us about it, we always like to make sure that they are a good fit for that type of product and to figure out what their actual plan is, their game plan. Because some of the things that you could…

maybe take the wrong way are things like saying it’s simple interest. All right, I’ve heard people say it. I think I even see it posted on the website that the interest is charged daily and it’s simple interest. And the reality is that is true, but only for each month. At the end of the month, the actual interest or the actual balance of your debt is posted and you will start paying interest on that new balance, which means

that that is compound interest, right? So every month you’re going to be compounding. That’s the same as a traditional home equity line of credit. So there’s actually no advantage to the way they charge interest compared to a regular home equity line of credit. And actually on a traditional mortgage, which they do have the way for you to fix in and lock in a traditional mortgage throughout this account, nice and connected, the traditional mortgage is actually going to compound semi annually, which means it’s going to happen every six months.

That’s actually better in the long run. Meaning if you had the same balance on a home equity line of credit or against the open lines on this Manulife One account, you’re actually going to do better with a mortgage, assuming that the rates were the same, payments were the same, and all of those things. So just be cautious here that you don’t extrapolate from some of the things you’re hearing here and thinking it might do something more than what it might actually do for you. So why optimizers love it like myself?

cash flow efficiency. My spouse gets paid every two weeks on a Friday from a T4. I get paid every 15th and 30th through my company. The salary that I take through my own corporate structure that I’ve designed and optimized comes to me every 15th and 30th. And I can promise you one thing. I don’t wake up in the morning every Friday, every second Friday or every 15th and 30th and immediately take the dollars and put them everywhere.

Right, I do it when I sort of log in and I notice that the money is higher and so forth. So cash flow efficiency is huge here that every dollar is gonna work instantly against debt until it’s spent. So that’s the key, right? So the longer you don’t have to spend it, the better. This would also open flexibility. There’s no rigid amortization table, which means you get to pay more when you can pay less when times are tight, which is great. Back in COVID, for example, people with Manulife One accounts,

didn’t have to worry about making their mortgage payments. If let’s say they lost their job or they weren’t going to work and weren’t receiving any income and they were tight, they didn’t have to call. They didn’t have to do anything like that. It also allows you to consolidate other types of debt. Now this is the part where it’s good and bad, right? So it’s very easy to access the equity within your home. It doesn’t cost a lot to do so. And every five or 10 years or whenever you’d like to, you could actually reassess

your property so that you can access more equity. A little bit of cost there, I think it’s about 250 or something like that in order to do so, but pretty easy stuff to go. So you have ongoing borrowing availability against the home equity without having to reapply for any of that equity. So again, it’s for disciplined optimizers. Where it falls short, first and foremost, if you struggle to keep track of things already without the Manual Life One account, this might be

more problematic than helpful for you. So I wouldn’t recommend this account for people who are trying to figure out a budget. I wouldn’t recommend it if you’ve never actually made an additional payment to your mortgage to date. I would not move closer to this product if that is you. However, if you’re already optimizing, you’re looking for a better way to optimize even further, this can be a great move, including folks like myself and folks like that, like the Smith maneuver, for example.

as these dollars come in and you start paying down this debt, it’s gonna open up one of the, they call a sub account that you can then use and put into the market or put into your next real estate investment or put into whatever investment that you’re looking to make. And it also makes tracking pretty easy since you can open up sub accounts and you can name them and you can do all kinds of different things. Makes it really, really easy for you to know which interest.

or how much interest can I write off at the end of the year and how much can I not write off in the end of the year? However, there is temptation risk. So there’s a lot of people, I’ve heard some mortgage agents out there and mortgage brokers, Ron from the angry mortgage, I believe is his handle. He’s talked about how he takes more people out of the manual life one into traditional mortgages instead of putting more people into them. So he has nothing against

this product, but what he finds is that more people get into it with a plan like it’s gonna like change their life. And actually it’s them themselves, they themselves that actually have to be committed to it before they get into the manual life one, if that makes sense. Now, few other nuances here that are really important and that also factor into why someone like maybe me doesn’t already have a manual life one. Okay, back when I explored it a couple decades ago,

when I was in this stage, the posted rates on the website at Manual Life are higher than what you’re seeing posted in other places. Now, when you go down the rabbit hole a little bit, the rates are usually better, but oftentimes they are not the lowest interest rate. For some people, that’s not an issue. Like if you’re the type of person that your bank sends you your renewal notice and you just say, yep, and you just pick one, you’re probably paying a much higher rate than maybe you had to.

However, there’s work to be done when you wanna shop a rate around, right? You either need to get a mortgage broker or you need to yourself be reaching out to the big banks and so forth to try to figure out where these best rates are. You can go to RateHub or you can go to these websites that are showing these really, really low rates, but the reality is, is as you apply, they end up going up. So with Manulife, seems like the rates seem to come down on these low rate websites, they tend to go up or they’re for high, what they call high…

ratio mortgages where you’re putting 5 % down and CMHC, you’re paying a fee over there in order to ensure it, less risk for the lender, lots of nuances here as well. But what I find in general is that if you’re gonna go down the manual life one route, you are gonna pay a little bit more on the interest rate. Now, what is a little bit more? This changes over time. What I’m noticing right now is that you’re gonna pay maybe 30, 40 beeps.

higher, which is like 0.3, 0.4 % higher. One thing that is consistent though is what I’m seeing is that essentially the home equity line of credit rates that you’re seeing at all the big banks is essentially the same as the manual life one floating rate. I can’t remember. They call it the base rate, I believe. So you’re paying about prime plus a half percent on the lines of credit.

Why that matters is that if you have a massive traditional mortgage and it’s going to take you a really long time to get to a place where you actually are borrowing a large amount on the line of credit, that line of credits and the rate is going to be less helpful to you, right? It’s the same as what you can get anywhere else. What’s going to matter to you now is what rate you can get on this large mortgage. So if you have a $500,000 mortgage, a million dollar mortgage, something like that.

the rate that you get on the locked in portion is gonna be a little lower at some of the other places. You’re gonna have to do some shopping, but that lower rate could be better for you in the long run than having access to the manual life one account unless there is a really specific intention to allow your high income and we’ll call it low expenses. If let’s say you’ve got a high income and you’re not spending a huge amount of it,

Maybe you’re only funding your RSPs at the end of the year or something like that. There’s some arbitrage here that can make the higher rate on the traditional line or the traditional mortgage make sense. So the reality here is that it could be a great fit for you. However, there are other ways that you can do it. If you’re like me, I’m not gonna be optimized to the max on this because what I have is a revolving line of credit. I also bother my banker.

in order to create new lines for me, which takes time. took over a month last time because it’s not something that is easy to do with the bank that I’m at currently. Whereas with Manulife One, I could quickly open up that line. That would be a feature that I would love to have, but I don’t yet. However, I’m with my bank because I got a really good rate on my fixed portion of my mortgage and I haven’t had the benefit or the reason to shift over yet. However,

this December, I’m up for renewal. So who knows where I’m gonna land? You might find me in a manual life one, because I love the product. I love the flexibility of it. I’m responsible enough to handle it, but I gotta make sure that the rates are gonna be close enough for someone like myself to make it make sense, right? So these are the things that you’re gonna need to do for you. So if you want to do more set and forget so that you don’t have to worry about that a whole lot.

It’s a great product as long as you’re responsible enough not to overspend. Now here’s something that’s really important. When you’re doing a traditional mortgage with a re-advanceable home equity line of credit like I am, there’s going to be money sitting unless you’re really on top of things, right? It’s like logging in every day and moving money around and things. And that could be really problematic, right? You almost have to put a price on your time for that. I tend to do that and I don’t do it daily. I do it, you know, once a week or so I just take a look.

but there’s always money sitting in my checking account, because I’m always worried that maybe a payment’s gonna come out and I’m not gonna have enough money there. So for me, that’s the negative of doing it my way. However, the rate that I have on my traditional mortgage is great. Now, for those who are looking at retiring soon, this could be a great play, even if you were to set up a Manual Life One account and just leave it without actually borrowing any money.

they do have fees on this account. So it’s important for you to note that I think it’s $16 a month or something, which might be the same as what you’re paying at your traditional bank, or maybe it’s not. But one advantage you have, if let’s say you’re approaching retirement, is that you could set up the Manual Life One so that you have these accounts set up and leave $5,000 in the account, meaning you have a positive balance of $5,000. That’s gonna waive the fees for you so that you have it set up and ready so that

If during retirement you want to utilize the equity in your home to invest or maybe even for cash flow like a reverse mortgage, you’re going to get a pretty great tool that’s already set up. And as long as you’re not moving from one house to another house, there’s no underwriting that you need to worry about. So there’s lots and lots of ways that this can be really helpful. My Smith maneuver friends is, you can essentially capitalize the interest so that you basically

You know, the interest cost isn’t going to take money out of your cashflow from day to day. There’s all kinds of things that you can do here. However, you got to be an optimizer and you’ve got to be aware of what the other rates that are out there and you’re going to have to do a little bit of arbitrage to figure out is my use of this product going to leave me net ahead. Or maybe the inconvenience is worth it to you as well. That’s another aspect.

Or is this going to leave me behind in the long run if the goal for this tool was to help you optimize and grow your net worth over time? So some closing takeaways. The Manulife One’s powerful tool, but it’s not the solution. It depends on who uses this tool. For optimizers who track cash flow, it can accelerate your mortgage freedom. But for many, the higher rates and lack of structure can make it costly or more costly than beneficial. So my advice?

Explore both and if optimization’s the goal, consider pairing with a low rate mortgage and a re-advanceable HELOC strategy or if your actual mortgage amount isn’t a significant amount relative to the equity that you plan to put into play with the Smith maneuver, then this might actually be the right move for you because you’re gonna be paying about the same in home equity line of credit interest anyway. So the flexibility would be a huge win. So my friends,

If you are interested in looking at the Manual Life One, let us know. We’ll do our best to get you connected with someone amazing at Manual Life and we’ll get you on that path. However, as we mentioned, make sure you’re exploring some other avenues as well and make sure that it’s the right fit for you. If you’re interested in learning where you are along your four stages of a Canadian wealth plan, you should head on over to CanadianWealthSecrets.com forward slash

pathways and you can take our for our short assessment that will take you through the four stages to create your own wealth building flywheel. If you’re ready for a call, reach out at Canadian wealth secrets.com forward slash discovery. And we look forward to hearing from you soon. Like in what you’re hearing, do us a favor, subscribe rate and review the podcast, whether it’s on an audio platform like apple or Spotify or

YouTube, which seems to be gaining a ton of traction. Do us a solid head on over to YouTube, hit subscribe, hit the notification bell, and we will see you in the next episode. Just as a reminder, this is not investment advice. It is for entertainment purposes only. You should not construe any such information or other material as legal, tax, accounting, investment, financial, or other advice. And as a reminder, Kyle Pearce is a life license and accident and sickness insurance advisor with Canadian Wealth Secrets, Incorporated.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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