38 _ Sunday, January 29, 1995 — North Shore News

MONEY MATTER | Climb to the Top

. ith a Solid |
Debt reduction a Foundation.

wi Se f fe yest rm e nt It's sways a smart move to rely on a CGA to

do the job right. Our ranique five year professional
PAYING OFF Paying off an outstanding credit
your debts is as y card balance —~ which could be a
effective as any fi costing you us much as 12.9% it managers who are superbly qualified to handle
sophisticated tax ae vestmient in 86% interest responsibility, challenge and change. CGAs have
and. investment : before tax if you are in risen to the top in industry, commerce,
strategy. the 41% tax bracket. government and. public practice wherever
A certified There is no possi- ;
general accountant . ble way to earn that
(CGA) explained } sort of interest, short
how income — tax ee _, Of loan sharking.
relates to debt reduc- If you-are in the
tion. . : lowest tax bracket of
“The concept is simple.” she * about 27% (that is, your
said, “Paying off a 10% debt is like . taxable income is below
earning 10%.after tax; this applies about $30,000), paying
whatever the rate. Finding any other . off those credit cards is
no-risk way to earn a guaranteed — still worthwhile. How else can you
10% after tax is far from easy.” _ earn 45% interest before tax?
For: example, if you eliminate a If. you are (or become) a suc-
$1,000 debt.on which you are pay- cessful investor, only then should
ing .10% interest, one year from. you consider other investments
now you will have an extra $10G in instead of paying off debt.
your pocket, compared with carry- The rule, said the CGA, is you
ing that debt for another year and ~ must earn a higher, after-tax rate of
paying $100 in interest. ; return than the interest rate on your
Why is that so effective? If you debt.
invested $1 ,000 and wanted to end |
up with $100 in your pocket a year’
“. later, "you'd ‘have-to earn’ perhaps
“17% interest. You’d declare the
‘$170 interest, pay 41% tax (if your,
taxable income is’ between about -
*°$30,000° and'-$60,000) and. that
“would leave. ‘you with $100 after.

program produces highly skilled financial

sound nancial dei

in this case, paying off a 10%”
‘loan i is the same as investing ’ at
” 17% - before, tax,” the CGA
7 -explained. . “You cannot find
any risk-free investments
yielding 17%.”

4 re : Certified General Accountants Association
+1.9:9 4 BUNDAY »* WEDNERGDAY + FRIDAY . : _ at Britisti Columbia

' .

‘We are pleased to present the completely independent and objective | .

Show opens 1 00pm - Seminar starts 2:00pm
Tickets $7.00 (includes GST)

Mike Grenby ©
Ba Msc CFP REP

"Tickets available:

we

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