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Page THE HERALD Wednesday March 1991 Money Matters Up in smoke Holy smoke The Canadian government sure Is putting the boots to smokers eh When the news came of the new tax being added to cigarettes the thought came to have a look at some of the implications that smoking can have especially on younger people First there are the life in surance mortality tables In general young people both men and women between the ages of 20 to can expect to live to years less than nonsmokers Forget about the cigarette price increase thats enough to en courage some people to quit Next thoughts about the amount of money that would be spent in a lifetime if the price of cigarettes stayed at this new price An informal survey in dicates the new price with sales tax and 7 GST is per package of 25 or per car ton Of 200 If a person starts smoking at age and how many do you know who start at the age of 12 or younger and keeps it up for 50 years assuming they dont die from it first at the rate of car ton perweek that amounts to a total of cartons or 20800 packages of cigarettes If the price stays at per package that would add up to Thats quite a tidy sum of money Now lets suppose that this person decided to do something radical with this money like quitting smoking and saving for the future And lets suppose that he or she took this money and started a monthly savings plan The oft heard excuse I cant af ford it doesnt wash because the money is being spent now on cigarettes It simply becomes a question of changing the direc tion of the expenditure Well a carton per week for weeks works out to 2129 92 at current prices or 177 per month Lets add a cent to the monthly figure to round it out to 50 Forgetting about taxes and in flation for a minute if a 20 year old new nonsmoker started a savings plan that yielded a 10 return compounded annually and saved that per month till the age of a total of years it would yield the sum of But suppose he or she had heard that long term investing in mutual funds have proven to yield a return that was better than 10 Some of the well managed funds have returned or more per year the long term But lets use a return of 13 to be a little more conser vative The same amount of money saved per month in the mutual fund would now yield the sum Of 2591 19004 The same calculation for a mutual fund averaging a 15 an nual return and some interna tional funds have done that or better long term would yield the sum of 378946286 over the same years All this from quit ting smoking and investing the cigarette money To stop smoking is not easy it is a personal decision and a ques tion of concentrating will power to break the habit The saving part should not be nearly as hard to accomplish If this same per son has a bank account starting ITS YOUR MONEY Paul J Rocket a monthly investment program with a mutual fund company can be done with a simple pre- authorized cheque which is deducted from the bank account each month Once started its really quite painless If a 40yearold quits and does the same thing the values at age would be at return 33146963 at 13 return and 45324913 at return If the money was invested in side of an RRSP this growth in value would compound taxfree until the time of retirement Then it would probably be withdrawn to provide a monthly income and taxed at the exsmokers marginal tax rate If the investment was not inside the tax shelter and using current tax rates the interest in the case of the 10 investment would be taxed the same as income In the case of the mutual funds return ing 13 andor 15 the income would come in the form of capital gains and dividends Most Cana dians still have their lifetime 100000 exemption and the in come in the form of capital gains would not be taxed until that was used up After that it would be taxed at about 75 of tax on interest income Dividends would be taxed but at a much lesser rate than interest In the lowest income class dividends are taxed at slightly more than the rate of tax on interest and at a taxable income of the tax would be about of the tax on interest The bottom line is that the average Canadian would be far better off receiving income from a mutual fund than from fix ed term investments Assuming inflation averages in the future the 20yearold who invested in the mutual fund would at age have a potential income of approximate ly per year inflation ad justed to todays dollars Now who wants to quit smok ing For free Information on saving by Installments and a chart com paring the results of monthly sav ings In an Investment yielding 10 with an actual mutual fund contact Peter C MBA Regal Capital Planners Ltd 10 Drive Georgetown On tario or phone Paul J Is the author of the best seller Why I Invest In Mutual Funds and President of Regal Capital Planners Ltd Bad news about diabetes Diabetes kills more than Americans each year and causes blindness in many thousands more Nearly half of all nontraumatic leg and foot am putations in the are caused by diabetes People with diabetes are at least twice as likely as non- diabetics to have heart disease or stroke From Drug Topics Oct jinny A finny taper is pleased to announce that The Month of March is ACTON BABY MONTH 3P FREE Clip Out Coupon and Call To Obtain This Special Offer I First Week Service Plus a Special Gift For Baby I taper Service J SAME DAY TAX RETURNS Guelph St Georgetown 8772217 Mom if we get a Party Pizza from Country Lane for my Birthday Party they will give us 3 Video Rentals for FREE with it 8776767 8772254 I PLUMBING BOUTIQUE Coleman Only Water now Filtration System Mirocast Acrylic WHIRLPOOL BATHTUB WhiteBoneGrey RttSS9995 SAVE 20 SMI Singh KITCHEN Valley FAUCET Model Rtf Reverse Osmosis Our most f fective system for reducing some inorganic compounds and unwanted tastes and odors With Only Water System 500 water flows through sediment and carbon pre- filters then is forced through an advanced thin film composite reverse osmosis membrane where contaminants are washed away The water then flows through a post carbon filter leaving cleaner clearer water What makes the Only Water System di fferent from other reverse osmosis systems is its many standard features Important features such as a high performance thin film composite membrane An inline carbon polishing filter An safety faucet An automatic shutoff to conserve water And a large gallon storage tank The system also includes a TDS Total Dissolved Solids monitor to ensure the system is operating effectively And unlike some reverse osmosis systems Only both chlorinated and water The System 500 is simple to install yourself and plumbs easily into the cold water line beneath the sink through the use of a selfpiercing saddle valve so there are no pipes to cut Single Lever BATHROOM FAUCET Chrome RttC995 SAVE 20 SAVE 90 CAYMAN VANITY with MIPLEX VANITY TOP Sin SLIER TWO PIECE TOILET White Reg SALE SAVE Bane and available at extra cost COLEMAN REVERSE OSMOSIS Sale REG 69900 SAVE 13000 Conditioner Pellet Salt with Reined Kg Distilled Bottled Water WHIRLPOOL FLUSH WHIRLPOOL SPA CONDITIONER bottle I PLUMBING BOUTIQUE HOURS MONWED 930 AM00 PM THURS FRI 930 AM00 PM SATURDAY 930 AM 500 PM PRICES EFFECTIVE FROM MARCH MARCH 26 1991