CANADIANS ARE known
for their conservative ap-
proach to investing.

“But by taking a few simple
steps, you can make sure you are
still getting the highest return on
your funds even if you are one of
this conservative group,’ noted a
Certified General Accountant who
practises in Vancouver.

‘For example, paying off
non-deductible debt is one of the
safest and most rewarding invest-
ments. Getting rid of cutstanding
credit card balances is the same as
earning up to 32.9 per cent —
after tax — on an investment.”

Where else can you find such a
risk-free investment? The same
principie applies to paying off a
mortgage.

The CGA suggested applying
this test: Simply ask if you can
earn as high an after-tax return
anywhere else on your money as
the rate of interest on vour debr.
If not, then pay down the debt.

“*Restructuring your investments
can also increase your return
without increasing the risk,’” said
the CGA.

For example, if you have guar-
anteed investments (like term de-
posits and bonds) outside your
RRSP or RRIF and equity in-
vestments (like stocks) inside those
plans, you should try to switch the
two.

While the equities in an RRSP
or RRIF are tax-sheltered, you
lose the denefit of the dividend
tax credit and the capital gains
exemption. When the dividends
and capital gains are paid out to

Joel Laliberte
Ambleside Branch

At Bank of Montreal, before you're introduced
to our RRSP Program, you'll first be introduced
to one of our RRSP Specialists. Someone
who'll listen and help you broaden your
financial base for your retirement. When you
need straightforward answers and friendly
advice look no further than Bank of Montreal.

Photo submiited

INVESTING DOESN'T have to be as anxiety-provoking as a day on the floor of the Stock Exchange.
There are conservative ways to invest your money as well.

you, they are fully taxed.

in the meantime, the interest on
your term deposits and bonds
outside the RRSP and RRIF is be-
ing fully taxed. Inside the tax
shelter, the tax on the interest
would be deferred.

‘‘Therefore,”’ suggested the
CGA, “thold the equities outside
the RRSP or RRIF, so you can

J oel, PatandSam
will set their sights

on your future.

Pat Dejong
Upper Lonsdale Branch

10 BRANCHES TO SERVE YOU ON THE NORTH SHORE,

You can meet Joel, Pat and Sam at the upcoming Money Magic Show.

save tax through the dividend tax
credit and capital gains exemp-
tion. And hold interest-bearing
investments insice the RRSP ar
RRIF.”

Also consider the following ap-
proach to increase your return on
term deposits.

Let’s say you have $10,000. Put
$2,000 into a one-year term,

Sam DaSilva
Lynn Valley Branch

$2,000 into a two-year term, and
so on, up to 32,000 for a five-year
term.

If interest rates are higher next
year, you will be able to renew
your one-year deposit at that
higher rate. If interest rates fall,

at least you have some money

1/4% BONUS.

1990/91 Contribution
With 3 Services

Wednesday, February 6, 1991 - North Shore News — 34

FirstCity Trust

Member: Canuds Deposit Insurance Corporation

1575 Marine Drive
West Vancouver,

926-8877

locked in for three, four and five
years at today's higher rates.

When veu renew each deposit,
go for five years. That way, every
year, one-fitth of vour money will
be up for renewal (or available to
spend or otherwise reinvest).

Yet after the first years, you
will always be able to renew your
deposit for five years.

Always shop and compare. A
recent survey of 50 typical finan-
cial institutions showed the most
competitive one-year non-
redeemable $1,C00 term deposits
paving substantially more interest
than the least competitive.

Of course, service is also impor-
tant. *‘You might be satisfied with
less than the highest return if you
are getting a good return in the
form of good service,’ said the
CGA.

Finally, review deposit in-
surance and other guarantees. Ask
a bank or trust company for the
Canada Deposit Insurance Cor-
poraiion (CDIC) leaflet and a
credit union for the the Credit
Union Deposit Insurance Cov-
poration leaflet. They explain
what is -—- and what is not —
covered.

If an investment is guaranteed
only by the issuing company, that
guarantee is only as good as the
company itself.

This article was prepared by the
Certified General Accountants
Association of British Columbia,
the Province’s largest professional
accounting body. For further in-
formation telenhone 732-1211.

1/2% BONUS

1990/91 Contribution
With 4 Services

B.C. V7V 1H9