46 ~ Wednesday, July 14, 1999 — North Shore News From page 18 now for next year’s RRSP sea- son television advertising wars, as “clone” funds are sure to rake centre stage. How RRSP eligibility is maintained warrants more space than I have here, but investors should beware a few basic points. First, there is an incremental extra cost attached to these funds, approximately 50 to 65 basis | points per year which is added to the funds? management expense. You should srill use the traditional foreign funds for the allowable 20% foreign portion of your RRSP first, then use the new funds to gain extra interna- tional exposure. Second, the 100% RSP- eligible foreign funds are also not appropriate for non- registered accounts, Holding them outside an RRSP can have serious negative tax consequences, effectively turning any capital gain into north shore news @ BUSINESS Analysts say idea will take off regular income. As with all investments and ideas discussed in this column, seek the assistance of a quali- fied investment professional in reviewing the prospectus and determining the suitability for your own portfolio. Chris Carter is an invest- ment executive with ScotiaMcLeod in North Vancouver. He és also the daily business commentator on RCTV Morning News. He can be reached at 981-7618. 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And I hope you don’t make a habit of getting tax refunds. You should have a formula for dealing with windfalls like tax refunds. A typical one: divide the amount into three equal parts to pay off debt, invest and spend. For example, a $600 bonus (make sure you work with the take-home amount, after tax and other deductions) could reduce your most expensive debt by $200, get you $200 ahead on your 1999 RRSP contribution and provide same extra spending money for your summer holiday. . The $400 you put to work. for you keeps working. Depending on the credit card, paying off $200 on an outstanding balance saves you between about $24 and $60 a year, Making a $200 RRSP contribution saves you up to about $100 in tax, which if used to pay down ‘debt or make the following year’s RRSP contribution, just keeps ‘on saving/making moncy for _ you. If you have no debr, put half your windfall into an investment program, whether RRSP or non-registered, and spend the other half. The important thing is to decide on your windfall for- mula and then automatically apply it whenever you score some extra moncy. If you don’t, the money will proba- NORTGAGES WHEN THE BANKS SAY “NO” visit our WEBSITE www.instafund.com Lender Broker fees may apply . ‘ y I be with you bly disappear into general spending, producing little if any noticeable benefit, The occasional tax refund is always a nice surprise. But if you regularly get large refunds, it means you pay Ottawa tov much tax during ‘the year and don’t get back this interest-free “loan” until up toa year and a half lates. Find out what is generating the refund —— for example, monthly contributions to an RRSP, business/rental losses, deductible alimony. If these deductions will cre- ate or increase a refund for the year, contact the source deductions section of your local tax office for a form ask- ing to have less tax withheld from each paycheque. If you pay quarterly installments, sim- ply reduce the amount. 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