USINESS Understand fully investment risks DOLLARS AND SENSE “IN MAY, 1990, I invested more than $6,000 with a stockbroker. | was told the preferred shares he sug- gested would make at least 8%, usually 12% and some- times even 16% to 18%. “At that time, the bank was paying 10%. Something obviously went wrong because 1 ended up Josing $3,600. Why didn’t 1 at least get the 8% on my money?” — J.B. As we have seen all too often lately, even blue chip corapanies have reduced or suspended the dividends on their preferred shares. And the value of such shares can also drop. The copy you sent me of the letter from your broker admitted the loss was unfortunate but con- tended the risks had been explain- ed to you before you bought. A book I wrote to help lottery winners manage their new wealth contains a brief form with ques- tions to ask brokers and other ad- visers about the safety of the in- Arthritis society seeks volunteers to lead THE ARTHRITIS Society of B.C. and Yukon Division is seeking 15 persons to be trained as leaders for the highly acclaimed Arthritis Self-Managment Program. The program gives people with arthritis new information and teaches new skills that allow them to take a more active role in their arthritis care. The volunteers will attend a three-day free-of-charge workshop in Vancouver at the Ar- thritis Centre, 895 W. 10th Ave., on Saturday, Nov. 7, Sunday, FREE BOOKLET One often hears Canadians coim- plaining about the high amount of 5 tax they pay. What many individuals da not realize is that simply by structoring their investments carefully, they con pay far less tax. This guide will provide you with ideas for saving tas through your investment progr Call texlay fo receive Plinentary booklet, Mark Osachof? §61-7433 gi ScotiaMcLeod Dutta your cums vestments they recommend. Whenever you consider an un- familiar investment, have such a form completed, or get something clse in) writing about risks and “guarantees.” “Is the interest on student loans tax deductible?" — K.S. No. Hf you had your own business, you might argue this was a business expense incurred to help you earn a profit. But Reve- nue Canada would counter (1) getting an education provides gen- eral knowledge and skills, and (2) education spending is a personal expense, “Em $7 and want to retire, PH oneed an income from omy RRSPs. At what age can sou change an RRSP to an KRIF? -- D.M, There is no minimum age. (Uader the former rules age 60 was the minimam.,) You wrote about cashing an RRSP to make the $6,000 spousal contribution, Can | directly invest ny RRSP funds into a spousal RRIF?"’ — G.M. No. You have to cash your RRSP and declare the income, then claim an offsetting deduction for the contribution to a spousal RRSP. Your spouse may then convert the RRSP to an RRIF — but beware the ‘‘three-year rule’ which attributes RRIF income back to you if your spouse takes more than the minimum RRIF in- come withdrawal, Some background: If you have private pension income (not CPP or OAS), you may put up to $6,000 a year through 1994 into a spousal RRSP. If you don’t have spare cash but do have an RRSP, you can, as just described, take money out of your plan to make that spousal contribution. This makes sense if your spouse but Nov. 8, and Monday, Nov. 9 from 9 a.m. to 4 p.m. Workshop participants will learn group facilitaticn skills, concepts cf self-efficacy and how to enhance it, plus practical ways of helping themselves and others with arthritis care. No previous teaching experience will be ing lower tay bracket than sou when the money comes out, or if your spouse is younger so the money can grow tax-free for a longer period. “Our money is tied up in de- posits in our RRSPs, but we'd like to help our son buy a home. Can we borrow against this money to lend him a down payment?” — FR. Some financial institutions night give you such a loan — but this would collapse your RRSP (to the exteni of the loan) and you'd have to pay tax on this extra in- come unless you repaid the loan before year-end. However, your RRSP could fend your son money, provided this oan was secured by a mort- vage. You'd need a self-directed RRSP and would probably have to wait until the deposits matured. “Yo cannot find work in my pro- fession as an engineer here but have been offered a job in Mexico (by a non-Canadian company) at £8,000 a month with a five-year contract, My family would stay in Canada and I'd visit them every three months. Can | avoid paying Canadian taxes?"’ — A.L. if you come ‘‘home”’ every three months, you will probably have a tough time convincing Revenue Canada you have become a non-resident for tax purposes. Tatk ‘o an accountant who specializes in engineers and other clients who get long-term offshore contracts, and who is also famil- iar with Mexican tax law. “With the after-tax return on the GICs, T-bills, etc. so low, what do you think of Lifetime Term Deposits which I have been told produce doubie the after-tax return? I am 75 and don’t want the capital, just a good income.”’ —ESG. The technical name for a life- or medical knowledge is required. The total volunteer commitment after training is 24 hours per year. To register, and for futher in- formation, calf the Arthritis Tele- phone Information Service at 879-7511, local 306 or 301 be- tween 10 a.m. and 4 p.m., Mon- day to Friday. time term deposit is a prescribed annuity. You get a higher yield because part of each income pay- ment is a return of your own cap- ital, which isa’t taxed. You are locked in for life — which is great if rates keep falling or stay low, but isn’t grea: if rates start to climb again or you should need the capital. Copyright 1992 Mike Grenby is a= North Shore-based columnist and in- dependent financial adviser who works with individuals: he will aaswer your questions as space allows — write to him c/o The North Shore News, 1139 Lonsdale Ave. North Vancouver V7M cH, 1 Bonds o Stocks o Treasury Bills § 8 [7] Guaranteed Investment Certificates | Ci Canada Savings Bonds | 2) Mutual Funds 1 Mortgage-backed Securities ] Preferred Shares J CI RRSPs TRRIFs (2 Annuities OQ) Porticllo Evaluations S23 Financial Planning For more information, please call The North Shore's only full Service iInvestmaat firm. RBC DOMINION SECURITIES Reet of de Rope Bok Crap 925-3131 201-250 5th Street, West Vancouver SIALL BUSINESS OWNERS/MANAGERS The North Shore Community Business Development Program Apreven, highly-successful program that has already helped more than 120 North Shore businesses to achieve greater profitability: ¢ A 10-menth program geared to increasing management skills, sales and profits. Participants will take part in a series of business workshops, con- ducted by specialists in their fields. ° THEN °.., PRACTICAL “on-site” business counselling sessions following each workshop. © How to make your business a winner — * How to deal with money How to be really effective in your marketing @ How to find, train and keep the right people .--- AND MORE! Oniy 36 non competing North Shore businesses will be accepted. Take advantage of this opportunity Call Barry Goodwin 666-7703 & LOYALE. 4 WD STATION WAGON FederaiPusiness Ganquofidérsie Development Bank de développement F