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46 - Wednesday, February 21, 1990 - North Shore News

How does a financial
expert manage money?

I ALWAYS enjoy asking fi-
nancial experts how they
manage their own finances.
This time, I posed the question
to Mike Mallin. The co-author of
Preparing Your Income Tax
Returns (CCH Canadian, $16.95),
he’s been giving this column’s
readers some money management

the $250,000 range.”’

“On the other hand, it is
statistically more than most people
make, and I'm doing work I enjoy,
more or less, at the pace I want to
set for myself.”’

Mallin is 47, married to Carmen,
43; their daughter Kate is three and
she figures prominently in the fam-
ily’s financial planning, as we'll see

on such a savings account.

“It can certainly pay to shop
around.”

Mallin has set up a trust for
daughter Kate, which makes her
the common shareholder in his
company. “If my own tax plan-
ning works correctly, she will ac-
cumulate enough income at a net
22-per-cent tax rate to provide for

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her college education or other in-
teresis,'' said Mallin.

“Other than maximizing my
RRSPs, which are mostly in
equities, and having some common
shares and a cushion of short-term
ate - deposits, that’s all the retirement

in a moment:

‘When I could afford to save, I
started to put money into mutual
funds and in an RRSP,’’ said

No-Fee, Hassle Free ARSP :s an ideal plan tor
investors interested in a high return on
wavestment from fixed income securities such as
Canada Savings Bonds. GICs. and other eligible
corporate and government bonds.

For more in'g-maton and a free booklet
on RASPs, cail

and tax tips over the past two
weeks,

Originally from Washington,
D.C., and Chicago (where he

received his law degree), Mallin
settled in Toronto editing a tax
reporting service for CCH Cana-
dian Limited.

“1 felt perfectly qualified for the
job,”’ he said. ‘Tax was my worst
subject in law school and, of
course, I knew nothing whatsoever
about Canadian tax. So I started
with a clear mind and no prior
misconceptions.’’

In 1978, working with Arthur
Anderson & Co., chartered ac-
countants, Mallin began editing
Preparing Your lIacome Tax
Returns, an annual publication.

He eventually went out on his
own, and now co-authors the book
as well as working out of his home
as a consultant to small accounting
firms.

“The income from all this is and
probably always will be less than a
senior partner would make in a
large accounting firm,”’ Mallin
said, adding that a large CA firm
would pay its senior partners ‘‘in

Dan Dowber

“| can help you
choose the
RRSP that’s
right for you.”

‘The Mutua! Group has a
fuli range of Registered
Retirenient Savings Plan
investments. Let me help
you make the choice
that's best for your
needs. For personal

ser vice, call me."’

Dan Dowber
683-6905

The Mutual Group

Facing Tomorrow
Together

Licensed mitt Mutual tote of GanadaMotuat
Invesico Inc twa ot The Mutust Group

dollars

and sense
Mike Grenby

Mallin. ‘‘But I didn’t pay enough
attention to load factors. The first
funds I chose have very high
front-end loads ~— _ probably
because the salesman did a good
job. But I learned my lesson.

“IT still make maximum RRSP
contributions and still invest in
mutual funds because they seem to
me to put the onus of investment
decisions into professional hands
at a fairly reasonable cost.”’

Mallin believes in patronizing a
banking institution that offers a
good deal.

“[ happen to live half a block
from a Province of Ontario sav-
ings office,’ he said. ‘‘I used to
walk past the place for years to
deal with the bank where I'd
always done business.

“The bank had just done some-
thing annoying, changing the rules
about tiered savings accounts. So I
walked into the Ontario savings
office where I could get much bet-
ter rates and lower service charges

planning I'm doing. I’m not in a
business where I ever have to
retire; I don’t think of providing
for my old age.”’

But, said Mallin, ‘‘it took me far
too long, once { had become an
independent business person, to set
up a company, get the trust papers
and so on.

‘*] Knew these tax planning
techniques were there, but I have
always hesitated about getting into
the unknown.”’

Mallin said psychological bar-
tiers often get in the way of effec-
tive tax planning.

“‘For example, people invest in
RESPs (registered education sav-
ings plans) — the ones that pay off
only if the child continues to
higher education —- because they
want their kids to go to college,’’
he said.

**Even a family allowance sav-
ings account is more flexible and
simpler — if people would only
recognize their kids might not go
to college.

“‘There might be better things
they could do financially — or
even personally. For example, it
might be better to spend an hour a
day with the kid rather than setting
aside an hour’s wages to put into
an RESP.”

Mallin said he’s very risk averse
and debt shy, ‘‘which is probably
why I7!] never be rich. I'll invest in

See Family
Page 47

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