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Page 16 THE HERALD Wednesday November 1990 Money Matters RSPs are a sound investment By BRIAN Like most Canadians you pro bably realize just how valuable your Retirement Savings Plan is for sheltering income from tax and for helping you accumulate a significant amount of savings for retirement But as many others do you may also find yourself faced with that frustrating con fhct of making regular contnbu tions to your RSP while at the same time you continue to pay interest often at rates much higher than what your RSP assets can cam on funds you ve borrowed to pay for home investors whether would be more prat to liquidate on outright or simply stop making annual contributions until alt outstanding is paid off But the is tint by liquidating a r all of vour RSP you would lose a significant amount of your savings to tax Further more the benefits of the annual tax savings on your RSP con and the ongoing tax sav logs of sheltered income tan often outweigh the cost of interest payments Since the federal govern has allowed certain tgages to be held as an invest within a selfdirected much in the same way as your RSP can hold Guaranteed Invest Certificates Treasury Bills or stocks Provided that you have sufficient assets to make the pro gram costeffective and that your mortgage qualifies under the guidelines of the program you can hold the mortgage on your own principal residence in your and withdraw the off setting funds This way your mortgage is held as an asset within your RSP so there are no tax consequences involved in making the transfer This means that you can your hard earned RSP savings to either pay down your mortgage or for other purposes without jeopardizing your goals for retirement There are several advantages to setting up this type of pro gram First you be paying the interest on your mortgage to your own rather than to a mortgage lender And because lenders normally earr a spread on mortgage loans the ference between deposit and ding rates and your mortgage must be based on going rates is to earn a better Brian Slessor Dollars and Sense rate of return than it is available with most other fixed income investments Second because interest principal payments flow back in to vour plan just as if you were making mor tgage payments thev are to compound more rapidly and pro vide you with more frequent reinvestment opportunities Plus the face thai you now have a in your does not affect your ability to contribute your in any way so annual contributions wilt continue to add to overall value of your As these payments and contnbu tions accumuJat in your you will be able to reinvest these funds in any of the investments that are normally available in a selfdirected RSP Third your mortgage is a top quality investment for your RSP a first or second mortgage secured by your own personal property This means you have the additional comfort of knowing the true market value of your in vestment first hand Further more because all mortgages held within RSPs must be in your retirement savings are protected against any default Finally there are no restne tions as to how you use the funds borrowed through your mor tgage Although many people want to use the funds to pay down an existing mortgage or to finance a new home purchase vou may use these funds for any purpose you desire If you use the funds for investment purposes you may find that financing with a mortgage loan is less expensive than with a general investment loan and best of all the interest portion of the mortgage deductible There are several conditions which must be met before RSP PLUS Now you can guarantee the rate of interest on your RSP contribution With todays high rate of interest and the uncertainty of the future this benefit could earn top dollars for your RSP in vestment To participate in this outstanding offer all you have to do is talk to your personal banker Minimum amount 1 00 Terms 1 5 years Annual interest payments For further details on this outstanding offer con tact our staff or call 9700 The offer expires at the close of business 31 Dec 1990 Canadas Leading RSP Bank ftfi3 ROYAL BANK 232QUELPHST GEORGETOWN ONT OF CANADA can use your mortgage as an RSP investment One of these is that only arm s length mortgages where you have an interest in the property are eligible Another is that the mortgage in rates and terms must be in line with those available in the general market Also there are numerous costs involved in set ting up and administering a mor tgage RSP and these must be taken into consideration when studying the feasibility of the pro gram otherwise you could find that the fees consume any benefits you might have enjoyed from setting up the program A rule of thumb is that vou should at least in your RSP to make the program worthw This strategy should only be considered after a thorough consultation with vour Invest Executive Brian Is an Investment with Scotia Questions should be directed at Brian who can be reached at 416 8032825 Call collect if out side Toronto 8770109 0109 Simon ChAtTERED ACCOUNTANT OFFICE MAIC FOR ALL YOUR OFFICE STATIONERY NEEDS St Georgetown Clothing Mens Ladies Childrens ALTERATIONS REPAIRS 8771598 Phone 4168770109 132 Main Street South Georgetown Ontario 3E6 8770109 THE CORPORATION OF THE Town of Halton Hills Halton H Ms Or P O Box HALTON HILLS Georgetown Onlaro COURTESY NOTICE OF A PUBLIC MEETING WARD 2WARO Streets Council for Town at Kits conduct Meeting to examine end The proposed Involves lands described In Phi Lots 13 and 15 XI Town of HUs commoiihjrcferrrt tots tt Upper CaiiattCiSeor lands The purpose of the Is to repsond to deferral by Upper Canada CeBege if certain policies In the Official Plait The deals with the land use and environment the Halton Official Plan Further is in the Planning Department ALL INTERESTED CITIZENS ARE WELCOME Time 7 00 Date Monday December 3 1990 Location Chamber HHs Civic Centre 1 HNS Drive Georgetown Ad No FUe No DOS UP Think Before you spend your money outside Halton Hills When you shop at home your local sales dollars stay home supporting local interests When you shop at home youre helping your friends and neighbors People whose businesses keep our community alive and growing When you shop at home you save time as well as wear and tear on your car Think about it SHOP HILLS FIRST 3