Expect turbulence from time to time

DIVERSITY eases the stress of uncertainty — and helps look at your own situation.
keep your stomach (and finances) calm during the current

referendum roller-coaster ride.

Expect some violent dips,
swoops and climbs this month.
Financial markets hate uncertainty
and instability. While i still have
faith in Canada as one of the best
places io live over the long term, I
felly expect turbulence from time
to time. But barring disaster, we
should survive reasonably intact.

In the best of all possible
worlds your financial plan is set
up so you have — or wil! move
toward — these basics:

- @ The Dollar.. You have US.

: .dollar investments — U.S. dollar
‘deposits in Canada, a U.S. ac-
count south of the border, stocks

‘or. bonds denominated: in U.S.
funds,-..perhaps even some real
estate in the U.S.

As I write this, the Canadian
dollar ‘has lost almost a dime
against the U.S. dollar in the past
year. Hedging your bets with
‘sorme U.S. investments is par-
dcularly important if you often
visit or deal in thé U.S.

-@ Interest Rates. Your interest-
bearing investments have stag-
gered maturity dates. If interest
rates go against gravity aad our
fragile economy, you will have
some term deposits, bonds end’ so
on that mature over the next few
months. You can then renew them
at the higher rates.

On the other hand, if rates set-
tle back once the world feels more

. confident in Canada, you will be
glad the rest of your money is still

Michael

DOLLARS AND SENSE

locked in at the higher rates in ef-
fect when you made those invest-
ments.
@ Debt. You have no or tow debt
— or debt with the flexibility to
refinance if rates go lower. Hav-
ing no debt gives you the most
stability. You can then borrow
when the time is right to buy a
home or make an investment.
Nobody can predict future in-
terest rates with absolute certain-
ty. Read what the experts say (a
return to lower rates in a stable
Canada/U.S./world, but the risk
of higher rates to support the Ca-
nadian dollar or otherwise
stabilize financial markets). Then

If you have debt, especially a
mortgage, and the higher pay-
ments produced by higher rates
would push you over the edge fi-
nancially, lock in to give you per-
sonal and financial peace of mind.

Bargain for the maximum flex-

ibility to make extra payments and
even refinance with low or no
costs in case rates turn down.
@ Stocks and Bonds. You hold a
mix of stocks with a long-term
history of growth in both value
and dividend payments. Unless
you are an astute trader, you
chose these stocks with the idea of
keeping them for years.

If you are a bit of a trader, you
might be watching for some real
bargains to be tossed up by the
turbulence: quality stocks at low
prices.

While (government, corporate)
bonds pay a fixed return, their
value rises when interest rates fall
and vice .versa. Again, a mix of
short-term and long-term bonds
can help hedge your position.

Maay people invest in the stock
market through mutual funds
where the managers of these funds
decide what and when to buy and
sell.

Although past performance is
no guarantee of future results,
fund managers who have survived
and even profited during past
stock market upheavals hopefully
will do so again.

Holding stocks and bonds (or
mutual funds) with an offshore
base gives you further Civersifica-
tion. The economies of Europe,
Asia, South America and so on

Group RSP’s enhance packages

ONE OF the chalienges of the ’90s wiil be attracting and
keeping quality employees. While there are many attributes
'. that attract employees to employment with small business,
the benefit packages of large corporations can be quite

tempting.

- You will be hard: pressed to.
find any financial expert who will
not sing the praises of the wisdom
of investing in RRSP’s. Unfor-
tunately, a lot of. peopie find
themselves facing the Christmas
bilis and unable to make a con-
tribution each February. Despite

_ the fact, contributions can be
made at any time during the year,
very few people have the discipline
to consider this investment option,
other than in January and Febru-
ary.

"A Group Retirement Savings

Plan can provide an attractive ad-
dition to your company’s benefit
package. Your empioyees will ap-
preciate that you recognize how
important it is to save for retire-
‘ment ‘and that you are helping
them to do so through a savings
plan that will allow them to
benefit from a reduction in their
current.income tax.

A group RSP could be one of
the bes: investments in employee
telations you will ever make —
and it doesn't cost your company
-anything! Contributing a small
portion of each pay cheque direct-
ly to an RRSP is a painless way to
save money while reducing your
taxable income.

What is a Group RSP? — It’s
simply a number of separate
RSP’s individually registered in
the names of each employec,
which when made avaiiable
through payro!l deduction, makes
saving for cetirement easy, With a
Group RSP the amount each in-
dividual contributes to his RSP is
subject to that individual's max-
imum RSP contribution limit.

A Group Retirement Savings
Plan offers an attractive addition
to your company’s benefit
package, at no cast to the some-

terme

By Garry Bader
Contributing writer

thing extra you can make avail-
able to your employee as an in-
centive to save for their retire-
ment.

With a Group RSP participants
receive all the tax deferrai advan-
tages of an individual RSP but
with the convenience of con-
tributing directly through payroll
deduction.

An individual's participation in
a Group RSP is voluntary and
you make the plan available to as
many or as few employees as you
like. A Group RSP is also very
flexible because individual partici-
pants have complete freedom to
choose their own investment op-
tion according to their own in-
vestment needs and to change
their contribution arrangements to
any time.

There is no cost to the company
whatsoever in providing a Group
RSP employee benefit. If you are
presently enrolied in a bank
payroll service, it is quite a simple
amendment.

If you are doing your own
payroll, it is as simple as remitting
the regular total deduction from
you :mployees’ pay cheques to the
bank handling your Group RSP.
This docs not necessarily have to
be your business bank. Your
employees will be quick to see the
advantages of making contribu-
tions through a payroll deduction.

First, it is much easier to con-
tribute on a regular basis than to
make a single, large payment once
a year.

Second, retirement savings wil!
be earning interest sooner and for
a longer period, so more will ac-

cumulate in your employees’ RSP.

Third, deductions will be made
from gross pay, which means your
employees will enjoy immediate
tax savings rather than waiting for
a refund after filing their income
tax retura.

By establishing a Group RSP,
your company will help your
employees to accumulate a very
important pool of savings for
their future retirement needs. You
will provide each employee with
an opportunity to obtain a reduc-
tion in their current income tax.

A Group RSP can become a
very important component in your
company’s employee benefit
package. The establishment and
maintenance is very easy and cost
effective.

Garry Boder is an area manager
for Royal Bank on the North
Shore.

The CAT PACH is he

are hardly affected by Canada’s
referendum and unity problems
although they do have their own
set of risk and reward factors.

@ Real Estate. Like the stock
market, property is a long-term
investment. Valves and rentals can
be affected by referendum tur-
moil, especially if the economy
suffers and there are wild interest
rate swings.

But also consider demographics
and local conditions to help you
decide what, where and when to
buy, hold or sell ~- in Canada
and possibly abroad.

@ Work. Do what you can to

FREE BOOKLET

One often hears Canadians com-
plaining about the high ameunt of
tax they pay. What many individuals J
do not realize is that simply by
structuring theic investments
carefully, they can pay fur less

tax. This guide will provide you
with ideas for saving tax through
your investment program.

Cail today to receive your com-
plimentary booklet.

Mark Osachoft
661-7433

ScotiaMicleod

Irgded nvesimert adece since 1921

Fas cf COLLISION

make your job as secure as, possi-
ble. Look at starting or develop-
ing a sideline business — for fur-
ther income diversification.
— Copyright 1992
Mike Grenby is a North
Shore-based columnist and in-
dependent financial adviser who
works with individuals; he will
answer your questons as space
allows — write to him c/o The
North Shore News, 1539 Lonsdale
Ave., North Vancouver V7M
2H4,

RRIFIANNUITY
RATES

Monthiy ineoines for an
investment a! $50,060

‘Now RRIF sules starting
dan. 1, 1993 :
How evil you be affected?
For your personos Annuity
or RRIF. illustration or a
copy of our Guide,

f cof 925-3101

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Consultants & Brokers since 1974

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