4G - North Shore News — Wednesday, February 16, 2000 wing to YES, you can leverage money out of your RRSP or RRIF without paying any tax but only if you are a sharp investor and feel com- fortable with the risks involved. This is the season when financial institutions encour- age you to put moncy into RRSPs. However, few of them talk about the taxing problem “MORE IN-STORE SPECIALS *: Prices effective "February 16-20, 2000. While quantities iast you face when you take out your money again. Some financial advisers — but certainly not all — suggest and even promote the follow- ing approach: You borrow, for example, $100,000 to make invest- ments in nuutual funds, indi- vidual equities, revenue prop- erty, a business; anything with a reasonable expectation of growth and income. Deduct the (for example) $8,000 interest cost to offset withdrawing and declaring $8,060 of RRSP/RRIF income. But you wil! still be out of pocket each year by $4,000 to $6,000 (the $8,000 loan interest minus the $2,000 to $4,000 tax saved). So in the above example this strategy will work only if the investments you made HIGH TECH invest a risky prope with your $100,000 loan pro- duce an after-tax profit (net income and capital gains) of at least $4,000 to $6,000 a year. Also, even if your invest- ments appreciate in value by that much annually but you don’t sell them for several years, you have the cost of paying the loan interest in today’s dollars but not getting back your money until that future date when you sell the invesuments. There are no guarantees your investments will turn a profit. Even if they stay level, this approach wiii lose you money. Also, interest rates could rise. So before using this strategy, you must feel comfortable with all these risks. “My advice: forget this strategy,” said David Chalmers, who specializes in retirement planning at the Rogers Group. “You can’t be sure you will always make money by borrowing to invest. If you do use this approach, set an absolute limit on how much you are pre- pared to lose — and borrow not a penny more than that amount.” You could aiso create off- setting tax deductions (at least for a while) through claiming expenses related to a self- employed sideline business — again, one with a reasonable expectation of profit. You would deduct losses when startup expenses exceeded income. So look beyond today’s pitches to put money into an RRSP. Always think about the most effective ways to get back your money — which is the only reason to save it in the first place. Mike Grenby is a columnist and independent personal financial adviser. He'll answer questions in this column as space Cyberia, we are what we bookmark. Capilano College communications liai- son Shelley Kean shares her favourite five World Wide Web hot clicks. Kean likes: RB www.realtylink.org This site fulfils the dream of potential property own- ers who want to see what's available in the Greater Vancouver Regional District without getting wet. A per- feet place to shop and com- pare from the comfort of your own computer. @ belizcone.com/rubys/ index.html Here’s another dream — a winter trip to Belize. Located Mexico’s Yucatan peninsula, Belize is a tropical jewel and home to the world’s second longest barrier reef. Rubys Hotel was recently listed in the paper as one of the more affordable, friendly hotels oa the beach in San Pedro — on Ambergris Cave. kbs.cs,tu-berlin.de/ just south. of allows but cannat reply person- ally, Contact him at P.O. Box 50029, South Slope R.PO., Burnaln, B.C. V5j 3G3; e-mail . ~jutta /ht/writing. html Want to know how to write good hypertext? This site is an absolute “must have” bookmark for online writers. It’s simple and to the point. ® www.commarts.com Possibly. one of the best ‘industry mags for people in the creative arts and com- munications biz. Communication Arts online keeps me updated on what's hor in the communications world, : a www.bcadventure.com/ ecosummer/index.htm Need a vacation? If my bookmarks are any indica-_ tion, it sounds as if I do. - ‘However, just cruising this site is almost a trip in itself. It offers holidays for. the -. _ true outdoor enthusiast: From the Queen Charlottes: to, hey, Belize, these expedi- . tions are once in a lifetime excursions. - E-mail- your favourite - five. Web sites, a few lines: about what you like there and a.line about yourself to . -\-- (News Editor. Michael. Becker). : _ Apply now on-line for a low cost HOME EQUITY FY MORTEAGE Enrol in Computer Win 95 For New Users Sat&Sun = 9am.to 2 p.m. Feb 19 & 20 MOUS Pree Wonp 97 Exreat 2Sat 9 a.m.to 4 pn. Feb 26 & Mar 4 MS Worp 97: Levet 1 2 Sat & 2 Sun March 4 to 12 MS Access 97: Lever ! §Mon 70 9:30 p.m, Feb 2! to Mar 20 9am. to noon” Tete roses. MS Orfice: Levet 2. 2 Tues/2Thurs 7 to 19 “Mar710 16 - INTRO TO INTERN! Sat, 10am. to 4 Bua March : SeAncHinG On THE Wes Sun Fam. to 3 | pm. Feb 27, Acvanens Wea | 2Tués 7 t0 10 —) Mar 7 & 14