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Money Matters THE HERALD Wednesday 30 Page Professionals should be consulted in financial matters I earned I I saved it I Im going to look after it Thats the way most of us think isnt it After all its my money so nqbody but me is going to took after it But it is your body and my bet is that of us take that body to the a specialist namely a doc tor for regular checkups and if we dont feel well I also believe that we seek out legal help when we are buying a house or drawing up a will or for dozens of other reasons Why I believe it is because we know that these professionals know a lot more about medicine andor the law than we do so we consult them In fact most of us consult dozens of professionals in our lifetime be they dentists carpenters plumbers electri cians mechanics etc In fact maybe people seek your help and assistance because you are a pro fessional at whatever ft is you do Shouldnt we do the same about financial matters ITS YOUR MONEY Paul J Rockel Terry Stone president of the Bolton Tremblay Funds wrote in a letter to Investors Digest of Canada magazine It seems to me that expecting people to do their own financial planning and choose their own in vestments Is much akin to expec ting people to do their own legal or medical work Few of us are qualified to make vital decisions in these specialized areas In fact I could say that there is no discipline that has more in fluence on the future quality of life of the individual and his fami ly than proper financial plann ing Terry goes on to say that in Ontario the richest province retire below the poverty line In the US only of Americans retire financially independent Obviously something is not working and with the growth of the financial planning industry hopefully that will change Without a financial consul tant how will the typical investor know how changes in tax laws af fect his or her investments and whether or not they should make changes I agree fully with Terry Stones statements Do you Have most of us ever decided to consult an independent mutual fund specialist or a financial planner Or have we even re jected someone who was referred to us because we were afraid to think about these things or we were afraid we might be sold something Most Of us turn to specialists in almost everything we do But we seem afraid to do so In the field of financial affairs Yet as Terry says there is probably nothing that has more influence on the future quality of life even our health sometimes than proper strategies discussed As the new year begins it is time once again for Canadians to begin contemplating the annual ritual of deciding what to do about their annual contribu tions This article is the first in a series about RSPs in which I will be discussing several strategies to help you make the most of your RSP and which will hopefully make your decision a little easier This first article discusses the use of your as a tax shelter We all know that when we put money in an RSP each year we get money back from the govern ment And thats great But theres more to it than than Because Tax Reform has reduc ed the effectiveness of other tax shelters the now offers pro tection against inflation and taxes that few other investments can Lets look at an example If an investor were to make annual contributions of and invest them at 12 over a 25 year period this investor would have for retirement assum ing a tax bracket If an in vestor were to save each year still invested at but held outside an that in vestor would only have 448057 This example shows that using the taxsheltering ability of an results in half a million dollars more for retirement Many people do not consider RSPs to be a tax shelter but this example clearly demonstrates their effectiveness in this role Another way to make the most of your RSP as a tax shelter is to shelter the right kinds of invest ment income in the plan For ex ample under Tax Reform the investment income including interest income deduction is now gone One of the best ways to retain a tax break on interest income is to shelter it in an RSP That way interest payments are not subject to tax and are simply collected in the RSP to be reinvested at the discretion of the holder In vestments of this type which are suitable for Inclusion in an include- Canada Savings Bonds Coupons Mortgage- backed Securities and bonds Also under Tax Reform the lifetime capital gains exemption has generally been capped at Dollars and Sense by Brian You use your RSP gains after you limit should therefore to shelter capital have reached the Dividend income still receives preferential tax treatment although the dividend grossup and tax credit have been reduc ed Therefore investments which generate divident income such as common and preferred shares are usually best kept outside an so that investors can take advantage of the dividend tax credit For more information on RRSPs call Brian and ask for Ms free booklet Successful Investing Brian Slessor fa an in vestment executive with ScotlaMcLeod Any questions should be directed to Brian who can be reached at 8632825 Call collect if outside Toronto Say it in Herald POSTAGE BLOWOUT HIS YEARS POSTAGE AT LAST YEARS PRICES It now costs to mail a tetter 39 stamps 0 pack In Canada up from 39 last sale priced year So beat inflation Stock stamps free up on last years stamps and S T at 7 Soe You pay only 391 Last Years Price postage noli 3D punt Juliets DELREX SMOKE SHOP GEORGETOWN MARKET PLACE 8779284 financial planning Lets all seek advice no matter what our age to see if we can im prove our financial health and wealth Chances are we can even reduce the tax bite For a free comparison of a mutual fund with a Invest ment and Inflation over the last years contact Peter C MBA Regal Capital Planners Ltd Pagan Drive Georgetown Ontario or phone Paul J is the author of the best seller Why I Invest In Mutual Funds and President of Regal Capital Planners Ltd If you qualify you can get a cheque for 85 of the first 300 of your tax refund and 95 of the rest Plus your tax return will be accurately prepared at no extra charge So why wait for the refund cheque to arrive by mail Ask about Cash Back at HR Block and get your refund fast Under New Ownership In A New Locoiion JAMES STREET OH Main St Downtown Georgetown 8737855 Afraid of lower interest rates Put them to work for your RRSP By investing your RRSP in Industrial Bond Fund managed by Mackenzie Financial Corporation you wont fear the possibility of lower interest rates Youll welcome it Thats because bonds traditionally increase in value with lower interest rates providing capital gains as well as income for your retirement Whats more with Industrial Bond Fund you pay no acquisition fee so every dollar is working from day one Before you buy any RKSP let us hold your interest with the complete story Offer made only by prospectus Mackenzie The Industrial Croup oF Funds REGAL CAPnnL FLANDERS LTD PETER CMASSONMBA lOFagmDfiv 410 OVER YEARS OF CANADIANS REACH FINANCIAL INDEPENDENCE