Russell Moldowan THE BOTTOM LINE ' FROBLEM: HOW do tax- conscious investors and . depositors plan their invest- ments to take advantage of tax regulations. Ihave been receiving questions from readers wanting to beat the tax man, but there are very few oppor- tunities to out-smart Revenue Canada. Using dividend income to reduce the taxable portion of income is a great way for conserva- tive investors to get a break, At this point in the economic cycle, corporate profits are increas- ing substantially and shareholders will benefit from increased divi- dend payouts by Canadian corpora- tions not in a position to make new investments in their business. Interest paid on bonds, debentures BUSINESS BRIEFS - Compiled by Kate Zimmerman . North Shore business groups and individu- als wishing to submit items to Business Briefs can fax them to the attention of Kate Zimmerman at 985-2104, Scandinavians gather - for Yuletide festivities . The Scandinavian Canadian Chamber of Commerce will hold and other fixed-income invest- ments, such as GICs is taxed at your marginal tax rates, Dividends, on the other hand are paid by cor- porations from their carnings and are taxed at a lower rate because the corporation has already paid tax on these earnings. To compensate, the government offers a dividend tax credit. The tax credit will benefit investors with higher marginal tax rates the most, but all investors who receive dividend income will bene- fit. One can expect that the credit will add about 25% to the dividend yield at a 40% tax rite and at the highest tax rate of 54%, you can expect to add about 34% to your dividend yield. So, interest rates on a three year GIC are around 7.25% and the divi- dend yield on a high quality pre- ferred share is 7.10%. Ata 54% tax rate, the interest equivalent yield is 9.5%. That's serious money and it is paid quarterly. There are definite advantages for investors seeking to increase after-tax return without exposing themselves to much risk. Like bonds, preferred shares and common shares that pay regular cash dividends have DBRS ratings to give investors a good idea of their ability to maintain their pay- ments. A very important measure when evaluating investments. A good way for investors to get a managed portfolio of dividend investments is through mutual funds. These are not your everyday, run-of-the-mill funds, but a handful of good funds that promise to deliy- er income in the form of dividends so that it is tax advantaged. Keep in business its annual Christmas party Nov. 24 from 7-10 p.m. at Roald Amundsen centre, 6540 Thomas St., Burnaby (off Kensington and the No. 401 freeway). This Family Christmas party...Scandinanvian Style will include Scandinavian dancers, carol singing, a children’s fishpond and a Jule Shopping Street. Tickets are $8 for aduits, $5 for seniors 65 and over, and children 12 and under are free with an adult. Admission includes coffee or tea, Receivership Sale President's Court | & Hi Luxury Condominiums 1221 Johnston Road at Buena Vista (12th Avenue), White Rock Two-bedroom and 2-bedroom and den concrete and steel luxury condominiums from 1,223 square feet Further Price Reductions ! Now priced from dl 195,960 SALES ON SITE: Saturday & Seaday, 12:00 noon to 5:00 p. m. Courtesy to agents. For further information, please telephone {604) 661-5766. Coopers &lybrand Limited creditors trustew in bankrupicy receiver and manager agent for secured Coopers & Lybrand Buriding 13th ticor 1111 Wast Hastings Streat Vancouver, Batish Columbia, Canada V6E 3R2 A) Be ei, Ue oD 4 : aaa aah mind that many of the funds that promise dividend income can't commit to pure dividend income or capital gains so payments to you night include interest income as well, Another great investinent is ina number of small companies that munage a set group of extremely high quality utilities and banks. These closed-end investments are managed like small mutual funds and are listed on the Toronto Stock Exchange. Historical returns have been 7.5% to 10% dividend yields (10% to 13% interest equivalent). For investors that have an eye towards keeping more of what they earn for themselves, preferred shares fit the bill. Ifyou have signif- icant taxable income and tax reduc- tion as an objective with your investments, this is one of your few choices. 1 must stress that these invest- ments have no place within a regis- tered plan (RRSPs or RRIFs) because there is no tax liability on any income in the plan. With the aid of your qualified investment advis- er, you can structure your invest- ments to take maximum advantage of one of the last true tax breaks. The Bottom Line is: if you have been thinking about getting more income and taking less risk with your investments, preferred shares offer both. As investors get older and safety becomes an issue, these investments, when chosen properly will meet the objectives of even the most conservative investor, Russell Moldowan is an invest- ment adviser in Vancouver, He advises on investment management riers Nordic-style Christmas cookies, lefse, waffles and Danish pastry. Non-members are welcome, Call the Chamber office at 669- 4428 to reserve by Nov. 15. Women honored for promoting nutrition North Shore Dietitians and Nutritionists have been honored with the Nutrition Month Award for See more page 50 ovated in the prestigious and desirable Kaanapali area of Maui, the Maui Lani 5| Terraces represent an excellent opportunity to i linvest in one of the premier Blapartment markets in the a\United States. Consider the i | following major advantages: u(® RRSP eligible and not subject to foreign proparty rules di® Minimum equity requirement from just $21,375 US ale 100% equity financing available (OAC) 4/@ Each investor assigned a referenced fee simple condominium unit 1|@ Professionally managed © Positive cash flow from the start — 8% ner year paid monthly in U.S. funds ¢ NOTICE TO CREDITORS AND CLAIMANTS of LEO JOHN LEWICKI and PACIFIC WESTERN PROJECTS LTD.: contact R.W. Ady, 4 Barrister & Solicitor 8 71208, 2004 - 14th St., N.W. } Calgary, Alberta ! £403) 284- 1777 and retirement planning, Call or write ta Russell at (604) 661-7475, P.O. Bax 103-42, Pacific Centre, Vancouver, B.C, V7¥ 1H6, Or by E-mail at russell @ wrixg.ube.ca. FORTUNE tNAN C JiM PERKINS ALB. & F.L.C.8, Vice President Jpecializing in Saternatoonal Snoesting Are 100% of your aseots in fess than 3% of the world markets? ND 'MAXIMIZ 68 qs q 200 100% International RRS: evaleble #1750-1075 W Georgia St. your money in Canada's financial r> institutions ¢ Michael Mackenzie, former Superintendent of Financial Institutions in Canada, will cover why financial institutions have collapsed and how investors can make their deposits as safe as possible in today's market. Tues., Nav. 15, 1994, 7:30-9:00 pm The Westin Bayshore Hotei Cail Clay at 737-6700 for tickets Tickets are $15 each - pre-registration is required. : Presented by The Rogers Group, Independent Financial Advisors. Only 4 years old, Maui Lani Terraces offer substantial value with affordab prices - a? a time when Maui real estate is poised for significant growth. For more information, contact: Bruce Thomson at 668-6869 Toll Free: 1-800-865-1705 Fax: (604) 681-8964 OMAN Y timiten “Courtesy to brokers” Since 1902 A This advertisement does not constitute an offer to salt or the solicitation of an offer to buy the securities herein, which offer or solicitation can only ~= Secund Flour, 750 West Pender St., Vancouver, B.C., Canada VGC 1B5 Bf bo mads ny offyring memorandum. For a copy contact the atove.