Congratulations, you have taken the first major step towards financial security/independence.Goals:
1. I want to get enough equity into the house to start making use of theSmith Manouver.
2. Start contributing to my RRSP, to bring the taxable gross down & to setup for the future.
3. Start RESP & contribute enough to get the maximum amount from the gov't.
4. Eventually buy a bigger house, but keep our current house as a rental.(This is my long term goal...)
Basically I am wondering how to best bring my taxable income down, while still building equity in the house as quickly as possible so I can start theSM going.
1. No comments on Smith Manoeuvre, but I do believe paying down your mortgage is one of your best investments. If you are working outside the country, I'm guessing you're in some kind consulting/contracting field where your year-to-year income may not be terribly secure. Reducing your mortgage reduces the amount you need to get by if you have bad year.
2. With you having such a high income, and wife currenly stay-at home, it may make more sense to put the money in a spousal RRSP. The deduction to you will be the same, but the retirement income will be in her name. The goal should be to equalize retirement incomes. (Not as important as it once was since they introduced pension splitting, but who knows if they will keep it.) Sit down and try to forecast what your retirement incomes might be - for example will wife be going back to work someplace with a pension plan?
3. RESP is a good idea.
4. No comments on future housing needs, except increasing your equity in your current home will make an up-trade more affordable.