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the HERALD Wednesday October 2 1991 Money Matters Financial planning guide from Chinese fortune cookies ByPAULJROCKEL Herald Special Recently my wife and I en joyed dinner at a local restaurant We enjoyed our food ate with chopsticks drank Chinese tea and at the end of the meal were served a couple of for tune cookies Often the messages on the small bits of paper inside the cookie are ancient Chinese proverbs Mine read Value time over money Only time cannot be replaced How true Especially when it comes to planning for your finan cial future My wifes read You will have gold pieces by the bushel Well we have waited a couple of weeks and the bushel of gold pieces hasnt arrived yet We dont buy lottery tickets maybe that is our problem Or maybe the two proverbs bear a common message If you are a young person and use the time to your advantage then you can have gold pieces by the bushel Many people in their late teens and twenties that I speak with dont ever think about future retirement or retirement income dont think they will ever have a major illness and never think about the fact that sooner or later they will die Therefore in their youth often have no long term savings pro gram Many say or 20 years from now is soon enough to think about retirement There are many other things to spend money on now They dont plan to fail they just fail to plan There are only two ways to earn money One is person at work the other is money at work When you get older and are not person at work youll be in big trouble unless you have money at work There are three things that af fect the ability to have money at work These are amount of money time and rate of return The most important is timel Here are interesting examples of the effect of time on your sav ings If you are 18 years old and are able to save per year until the age of 25 then stop and dont save any more At an nual rate of return of per cent some mutual funds have exceed ed that return over the long term you would have a value of at age Lets say a young person doesnt start to save until age 25 and then saves per year un til age At the same rate of return the value at would be 3558252 The first young person saved a total of 16000 and the second young person saved a total of But at age the first person would have more than twice the value com pared to 3558252 Time and the magic of com pounding is by far the most im portant part of the wealth ac cumulation process Sounds great But how do you doit PAY YOURSELF FIRST Its not what you earn that counts but what you keep for yourself In my many years in the investment industry I have run across many people who gave the appearance of wealth and in ITS YOUR MONEY Paul J Rockel reality had next to nothing They were earning big incomes but were spending it as fast as they could earn it They were making regular payments on things like cars stereos TVs and vaca tions Although they owned these things they were actually decreasing in value as they were paying for them Guess who were the happiest Youre right The savers They could see their financial lot im proving In most cases members of the family were much happier The spenders were often dissatisfied always wanting more things but never seeing themselves as out of debt The things that they loved to have would lose value and have to be replaced DO YOU PAY YOURSELF FIRST There is an easy almost painless way to do it The savers will save through a That stands for Che que Many of us use to make monthly payments on our homes The bank or trust com pany once authorized sends the prescribed amount to the mor tgage holder every month We should do the same with our pay yourself first savings and in vest those regular payments You can invest as little as per month in a mutual fund through a Then maybe You will have gold pieces by the bushel For an example comparing how a monthly PAC in a mutual fund and a 10 per cent investment has grown over the years contact Peter Regal Capital Group Fagan Drive Georgetown or phone Paul J Is the author of the best seller Why I Invest In Mutual Funds and Chairman of Regal Capital Planners Limited a 24yearold financial planning company with offices from coast to coast In Canada Students can benefit from savings plan About college and university students can expect to receive cheques this scholarship season totalling announces James P president and chief executive of ficer of the nonprofit Canadian Scholarship Trust CST Founda tion With our basic scholarships averaging 2200 adds Renahan the real cost of higher education is substantially reduc ed for these students Besides being the oldest and largest what makes CST better says Tom OShaughnessy treasurer for CST Foundation is tht it is the only nonprofit Foundation that owns and controls the distribu tion and administration of its Plan As a result surplus generated by the Foundation is donated to students in the form of To date the Foundation has returned more than to parents and children to assist In the college and university education of over 36000 students To receive scholarships students must be enrolled in the CST Plan Deposits can be made on a monthly annual or lump sum basis Monthly plans start as low as per month Once the CST savings are completed and the agreement matures the in vestors receives the principal in time to assist with the students first year of postsecondary studies Students become eligible for a scholarship on entry to each of the second third and fourth year levels of university post- secondary technical and com munity colleges For further information con tact Wanda Super visor Corporate Affairs Tel FAX Prices effective thru Saturday October 5 reserve the right to limit quantltlet to normal family requirement Coupon items limited to two PLAY AND WIN YOU COULD WIN ONE OP NINE PRIZES FOLLOWING EVERY BLUE JAYS RUN ON ALL ft TELECASTS SEE DETAILS AT Look Spend Less During Our FALL FESTIVAL OF SAVINGS PRIM WE WILL NOT BE UNDERSOLD BY OUR MAI OR COMPETITORS ON THE 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