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Page 14 THE HERALD Wednesday December 12 Money Matters Financial planning key to future security Last week we looked at the stages of economic cycles home ownership interest rates and financial markets and how it relates to investor sentiment It is unfortunate but true that when the public thinks a reces sion is coming they tend to bat ten down the hatches On the other hand when the economy is people tend to get car ried away with it all and over ex tend themselves and pay too high prices for things This is human nature however many economists think that this tends to exaggerate the up and down cycles The euphoria of it all on the way up makes many think that the cycle will go on forever ITS YOUR MONEY Paul J Rocket It never does These cycles tend to make some people abandon their finan cial planning Others dont have any financial plan at all We all know that if a doctor is ill he doesnt try to treat himself he turns to another doctor for treatment If a lawyer is involved in a personal legal matter that Choose correct RSP One of the most common errors made by many investors is not choosing the best RSP for their own needs It is human nature to delay considering the alter natives wait for the last minute before the contribution deadline in February and end up selecting the closest financial institution the one with the shortest queue or the best contest These are not the best criteria for evaluating the type of RSP you invest in this year Your contribution is likely the most important money you spend each year Shouldnt you take the time to consider how you spend if Many people fail to realize that not all RSPs are alike In fact there are several different kinds Deposittype plans are offered by many financial institutions Deposit RSPs are like a savings account your principal is guaranteed and returns are usually low varying with the general level of interest rates This type of is best for very conservative investors or an in vestor who is looking to park cash for a period of time while awaiting improved Interest rates or emerging opportunities in the stock market Deposit plans also invest in term deposits and s which are guaranteed and offer locked in rates which are usually higher than for savings deposit The drawbacks are that you usually require a set minimum deposit and that a penalty is charged for early withdrawal if that is possible at all Mutual fund offer management and a diver portfolio to the in vestor and are an ideal invest for smaller portfolios You are not restricted to a fund that invests in stocks there are also bond funds balanced funds real estate funds money market funds and others Mutual fund are available from banks trust companies investment dealers mutual fund sales organizations and insurance companies Selfdirected plans allow the in vestor to construct his or her owil portfolio by choosing from a wide range of investments Usually it is wise to have at least In funds ac cumulated before you set up a self directed plan to allow for proper diversification and to justify the administrative fee chargci by most financial for these plans A selfdirected can be Guelph Si Georgetown On 8779896 OFFICE MAGIC FOR ALL YOUR OFFICE STATIONERY NEEDS tailored to fit your needs because you can construct a sound port folio designed to meet your needs and objectives drawing from a wide range of investment choices Qualified investments range from and government guaranteed investments such as coupons mortgagebacked securities and government bonds to equities and mutual funds for growth A selfdirected gives you the flexibility to change the vestment mix within your RSP portfolio to take advantage of changing market conditions This ability to change can make a in performance and in the growth of your assets over time When determining which of the three basic types of is best for you you should consider the type of performance you require your tolerance for risk and your level of interest and expertise If you require maximum per from your are willing to assume a little extra risk in return for the potential of enhanced returns without losing sleep at night and are interested in managing your own RSP port folio with the advice of a qualified financial professional a selfdirected RSP may be the answer for you If you are a very conservative investor and prefer to simply make a deposit and know the rate of return your funds will be earn ing a selfdirected plan can be tailed to meet that as well The important thing is to choose a plan that meets your goals and that you feel comfortable with For more information on self directed plans call Brian and ask for a copy of his free booklet Successful RSP Investing Brian Slessor is an Investment Executive with ScotlaMcLeod Any questions should be directed at Brian who can be reached at If outside Toronto please call collect THAT BODY ft may require a court appearance he rarely acts for himself rather he engages another lawyer So whats with a formalized financial plan After all many people say I earned It I can in vest it But can you be your own finan cial planner Are you totally ob jective or do you rationalize financial problems for which you are uncertain of the solution and thus shove the whole matter aside Many do Could an evening with a finan cial planner help you What is a financial plan anyway Well its a lot of things It starts with your living estate and your death estate Looking at your living estate there are only two ways to earn money One is person at work and the other is money at work If you can be person at work you better plan to have money at work because with the debt this country has we wont be able to count on the government to fill the gap in the future It doesnt come close now The death estate is in surance to provide for obligations that most younger people have while they are working and sav ing to build up that living estate with money at work I simply cant save money I How often I hear that excuse Most Canadians at retirement have at least three financial assets their pension plans at work if the employer has one andor the Canada Pension Plan their house and their life insurance Ever stop to think how these things were acquired They were acquired by regular deductions from the pay cheque Continued on Page For All Your Fine China Silver Crystal GHtware MAIN ST MILTON TOWN COUNTRY CLOTHIERS Royal Robbins Columbia Run Bike Swim Fitness 8788622 THE Vanity Join Us Dec 23rd OPEN HOUSE Hot 30330 20 DISCOUNT Main Street East MILTON 8764244J GIC RATE 1134 Rat To Changa Without Notlca MONEY CONCEPTS FOR ASSISTANCE WITH ALL TYPES OF MORTGAGE FINANCING PRIME RESIDENTIAL CONVENTIONAL Months to 10 Years 1250 1275 IM Residential Commercial Cal DAVE 8734991 Ive prepared for the GST Have you Now is the time to register Are you ready for the pro posed GST If not now is the time to register and prepare Registration applies to anyone involved in a commercial enter prise This includes fishing farming professional services and many activities carried out by non profit organizations Revenue Canada is ready to assist you with information on How to register and the benefits of doing so What the GST means to your operation Simplified accounting options and administrative procedures Rebates of the Federal Sales Tax How to recover GST on business purchases GST return and filing options Contact us today Phone 800 2650017 Telecommunications device tor Ihe hearing impaired 800 4655770 Or drop by the Revenue Canada Excise Office nearest you Monday to Friday 900am Canadas GST Its good business to prepare now I Raw Canada Canada