36 - Wednesday, February 6, 1991 — North Shore News MONEY Are RRSPs sood for you? IT’S REGISTERED tetire- ment savings plan ume of year again. RRSPs can be a good way to save tax, and to save for retire- ment. But isan RRSP a good idea for you? Let's find out with the help of a team of Certified General Ac- countants who compiled a list of the key points you need to ccn- sider —- including the changes brought about by pension and RRSP reform. ® An RRSP is an everyday in- vestment, so choose one that gives you the highest return — and still lets vou sleep well. © You get a tax break when you put money into an RRSP. © An RRSP vrows tax-free. © You must declare the money when you take out RRSP funds. * Putting money into a spousal RRSP can save even more lax. * Renovating or going on a family holiday might give you more “profit’’ than investing in an RRSP. Your choice. An RRSP is sim- ply a “registered’’ savings ac- count, term deposit or guuraniced investment certificate, bond, stock and so on. See Save page 37 l oreach their goals entrepreneurs onthe move consult with CGAs. They know they can rely on their unique training and abilities to analyze complex financial information and provide the right answers. CGaAs are also highly skilled financial managers. In fact. no profe: ional qualification is more contemporary or harder to achieve. Thacs why you'll find CGAs in the financial driver's seat in industry, commerce, government and public practice — wherever sound financial decisiens are made. So when you need the expert ser- vices of a thoroughly qualified financial manager, an expecienced public practi- dioner or are interested in putting your career in high gear, the route to take is to look to CGA, We can satisfy your driving ambition. CGA Certified General Accountants Association of British Columbia 1555 Best sth (enue, Vaneouser, Briish Columbis VO) 1TS felephone 7324202 Fan 74! i282 Photo submited PAY OFF your mortgage earlier or invest in an RRSP for your future retirement needs? It’s some- times difficult to balance the financial demands of today with the necessities of tomorrow, but the earlier you plan for your retirement the easier it is to make it a comfortable one. Make wise investment decisions From page 35 term growth with mutua! funds.’’ The CGA noted that regularly putting $100 or $500 a month into mutual funds is called dollar-cost averaging, and helps you profit even when the market drops. “One study showed that if you had put $100 a month into the stocks comprising the Dow Jones Industrial Average for 64 months starting the day before the 1929 crash, your contributions would have grown cight per cent — even though the market was down 73 per cent at the end cf that period,”’ said the CGA. While the market is dropping, your regular contributions buy more shares — all of which go up in price when the market rises again. But you don't have to launch yourself into stock market in- vesting 10 manage your money more effectively. Deciding whether to buy a $20,G00 or $12,000 car with your $3,000 down and the balance to be financed at #3 per cent over four years is also an in- vesiment decision. “Buying the less expensive vehicle and investing the dif- ference could easily save you as much as the entire cost of your purchase,"* said Dan Cheetham, a Certified General Accountant. Cheetham said financing the $12,000 model instead of the $20,000 one would save you $215 a month. ‘Invest that at eight per cent for four years, ideally in a tax-shelter like un RRSP, and you would end up with $12,115." Cheetham used the same prin- ciple to show how taking om a 20-year instead of a 25-year mor- (gage could produce even more spectacular results. Paying off a $60,000, 11) per cent (calculated menthly) mor- tyage over 20 veurs will cost S619 a month, only $30 more than the $28-year mertgage. At the end of 20 vears, continue to make those $619 payments for five more vears — but ic voursell!. Ateimht per cent. said Cheetham, you will accumulate $45,482! Se mgndeging sour money doesn’t hase to involve complex and risky tas shelters. Simply be avare of sour alfermatives, and choose those that mutch your sit- uation and the kind of individu- AQ) yeu are. Ths article was prepared by the Certified General ANccountants Assogiauon eh Britich Columbia. the province's hirgest: professional aecounting body.