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BIST AVAILABLE COPY the HERALD Wednesday October 16 Money Matters Real estate mutual fund best kept secret Its no contest A real estate mutual fund is best kept secret in the country when it comes to tax advantaged in vestments for the average in Canadians hive had a love with GICs and Canada Sav Bonds CSBs They are con to be very stable with returns guarmtee and with your principal guaranteed to be relumed to you at face value However if you hac been standing by helplessly as ing taxes away at your in terest income here is an alter native to consider A real estate mutual fund is similar to any other mutual fund except that it invests only in long term commercial income ing real estate Commercial real estate also has a good measure of stability which is related to the contracts in force with the tenants the tenants credit wor thmess and economic conditions This sector is recognized as a conservative investment by pen sion funds and insurance com There are three types of return that the funds produce First is capital As the increase m value over ITS YOUR MONEY Paul J RocktM time the price of the fund units increases There are no tax con sequences until a property is sold or you redeem your units m the fund If you still hi your exemption the gams will be tax free Secfind interest income Funds keep a small percent of their assets in fixed income in vestments which generate a small amount of interest income This is taxable in the year it is earned Third rental income The rents received from tenants is sheltered from tax to a large ex tent by the use of Capital Cost Allowance depreciation This results in a large portion of the rents being tax deferred until you redeem units of the fund Then this deferred amount is taxed as a capital gain The fund holds back per cent of the deferred rental income and pays the recapture tax for you If you simply remain invested in the fugd you can continue to receive tax sheltered income for life with no 20 per cent holdback Here s a dollar and cents three year Dec til Dee tax com panson of a investment between an actual real estate mutual fund and in assumed 12 per cent three year At a tax rate of per cent the three year income from the of S3 bears tax of Si leaving to spend The same 10 in vested in a real estate fund called the Summit Fund earn 3 93 or an of 12 per cent before tax but the tax was only leaving 3 663 to spend Quite a difference 1 more after taxes from the real estate fund Maybe you should look into the advantages of a real estate mutual fund For a free pamphlet which details the after tax advantage of a real estate mutual fund com pared to a common interest bear ing investment such as a GIC contact Peter Reg Colouring masters These four youngsters were selected as winners in the Georgetown branch of s colouring con test held last week Each youngster received a cheque for 20 Front row from left to right Wendy Alison Joel Hamilton Graham Stone and Back row from left to CIBC employees Janice and John Winter Herald Photo by Steven QUESTIONS ABOUT THE FUTURE OF CANADA For more information about the federal governments proposals for constitutional reform call tollfree I80056MI88 Deaf or hearing impaired call 800 567 Canada Shaping Canadas Future Together Capital Group 10 Drive Georgetown 1 or phone 7216 Paul J is the author of the best seller Why I Invest In Mutual Funds and Chairman of Regal Capital Planners Ltd a year old financial planning com wit offices from coast to coast in Canada Management workshop If Financial Management for profit Organizations seems like a contradiction in terms then you or your group need this workshop on Monday Oct 28th from 10 at the Cultural Centre in Georgetown It s almost impossible to run any kind of association without money and even if you t in it for profit you still have to raise funds apply for grants ad minister fees dues member ships budget for refreshments handle the draws organize the bake sales and at the end of it all report to the membership and others on the state of the bank account And you wonder why no one wants to be treasurer Take the fear and loathing out of double entry bookkeeping balance sheets budgets and director liability Jonathan s Legal Beagle from the Luc It show provides a painless and entertaining workshop that will put your organization on a sound financial footing Jonathan teaches at the Law and Society Program at York and acts as a consul to profit groups on issues from fund raising and public education to organizational and program development He has been involved in volunteer and professional capacities with non profits for over half his life His approach is practical and tm mediately applicable At the end of this workshop you may still not have any money bul you will certainly know how to manage it The workshop sponsored by the Cooperative Program ing Committee costs only thanks to financial support from the Ontario Ministry of Health and you may register at the Ac ton or Georgetown Library Enrolment is limited so sign up before October 21st Sustaining refreshments will be served What does it mean when I cosign a loan A person whoco signs a loan as responsible for he loan as Ihc primary debtor the one who borrowed the money Th means thai the lender can demand pivmcnt from go signer before or in stud i f appro the debtor Say our son recemly bought a car and vou hi loan from ihe finance In ikes a his menls on I me vthmc s fine Bul f he finds he can i manage it and icl lit fall behind You could 1 your bank account or be garnished fir the debt before it To dungs worse most lo con ci coma what called acceleration chut This clause i thai he lender mi demindimmed lie repa mem of he whole loan if an condition eagre has been violated So one missed pameni could mean he em re amount of loan si ddenly has be re paid where the loan was lor the purchase of a car he car would probably be pledged security for the loan means of a mortgage Then if payments fill into arrears lender would have he THE LAW AND YOU by Colin LLBQC option of seizing the car And in certain circumstances if hey hen ell the car and lose money hey can sue you for he loss The creditor must give you proper nonce under the Person Properly Security Aci Of course in another ion up sccuntv for the loan the lender can seize those goods rather than go after the borrower if choose Read he document Get legal ice if re sure vou understand it or obligations fully And try make sure thai you alw know what happen on account so that re not taken surprise If you legal advice contact the Referral Service Lawyer Referral will provide with a free initial half hour consultation ith a lawver In Metro Toronto area call Outside Metro call loll free 1 268 From area code call toll free I