_DOLLARS AND SENSE

“HIS WORST move was

~ guaranteeing a loan for 2
‘friend’s fireplace business in
the early. “88s. That cost him
$150,009.

‘But his’ best'n move helped him
forget that:loss. He developed
Cantax,. probably Canada’s most .
successful tax preparation com-
puter program. .

= After he'sold the business -—
and after his divorce —~ he ended
up with $3.5 million. .

Henry Zimmer, 49, father of *

: four children and a border colliz
puppy, has been a chartered ac- |
~ countant end lecturer since 1967.

Already an. ‘author, he recently

‘set up his own book publishing
s business as well:

. “t's nice not to have to worry
“ about manuscript rejection,” he

~ Zimmer Tow writes under the
: ‘pen-name  Cimmer (“because he
: tired of.seeing his books on the
‘bottom shelves of Canadian
; bookstores,’? say the cover notes,
-- citing this as ‘‘one simple example
of entrepreneurial thinking’’).
His two most recent titles are
The Wealthy Procrastinator and
The Wealthy Paper Carriers
“(Springbank Publishing, $15. 95
: each). |

Zimmer now is working on
“wealthy books for women and
seniors,

Lasked him the secret of his fi-
nancial success. And he responded
with a list of money management
tips which he said he has followed
at one time or another,

(The morat of his worst move:
“Don’t invest in anything unless
you are there to take an active
role,.’')
© Buy a home as soon as you
can, Rent out part of it to help
with the financing.

Make sure you arrange the
mortgage so you can pay it off in
no more than 10 years,

@ When the house is paid off,
maximize your RRSP program,
using the carry-forward rule io
catch up with missed contribu-
tions. Then start a monthly in-
vestment program with growth
mutual funds.

@ Quit smoking, cut down on
drinking (eating junk food, having
lunch out) and fearn the power of
compounding.

If you invest $200 a month in
mutual funds growing at 10% an-
nually for 20 years, you'll have
$150,009. After 35 years, you'll
have more than $750,000,

@ Avoid credit card debt you
can’t pay off monthly,

@ Avoid pension plans. You're
better off with your own RRSP,
iceally subsidized by your
employer.

@ Choose hobbies that can be
turned into profitable endeavors;
this is very important if your job
isn’t secure.

@ Use an insurance broker to
shop for the best life and
disability coverage while you're
building your assets.

@ Have a current will. Leave
more to relatives who really need
help.

Zimmer also suggested en-
couraging children to develop their

' entrepreneurial skills.

“It’s no crime to make money
and they would often be better off
in the long run investing their time
into their own business rather than

working for someone else," he
said.

“Unfortunately, they won't
learn this in school, where most
teachers are more interested in job
security and their pensions than
entrepreneurship.”

Zimmer suggests the following

. tips for teens.

© Get a job as soon as you can.
Becoming wealthy means giving
up sleep or sitcoms. Choose hob-
bies that could earn you money.
@ Avoid smoking, drinking, junk
foods and video arcades, If you
invest the money you save, you'll
be a millionaire before age 60.

@ Don't leave your savings in the
bank, Learn about growth mutual
funds,

When you are young, you can
afford to take some risks — but
stay away from stock tips and
get-rich-quick schemes.

@ Finish high school but don’t
necessarily think an academic
post-secondary education is the
only answer.

Today, many university gradu-
ates in the arts are waiting tables
in restaurants. Consider com-
munity colleges and choose prac-
tical courses that can eventually
lead into your own business.

@ Learn the basics of the Cana-
dian income tax system.

By the time you earn more than
330,000, the government will take
away more than 40% of all your
additional earnings.

But if you have a successful,
incorporated business, you can
pay as little as about 20% tax on
up to $200,000 income a year.
® Live at home as long as you

can stand it and invest your enrn-
ings,

When you do leave, buy a
house.

A fixer-upper will be fine if you
are handy. Rent out the basement
or spare bedroom to a friend to
help with the payments.

@ As you work and earn money,
reward yourself along the way
with little gifts, Otherwise,
becoming wealthy won't be much
fun.

@ Take a basic accounting course.
To get ahead, ft helps if you ure
familiar with business numbers,
Understand how compounding
works,

Mike Grenby is a North
Shore-based columnist and in-
dependent financial adviser who
works with individuals; he will
answer your questions as space
allows -— write to him c/o The
North Shore News, 1139 Lonsdale
Ave., North Vancouver V7M 2H4.

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in the trunk.

PROTECT YOURSELF.

ICBC AND YOUR LOCAL POLICE.

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