16 ~ Wednesday, November 3, 1999 ~ North Shore News

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‘From previous Page.

north shore news

BUSINESS

AT first glance it looks
tempting: Hold your
mortgage in your
RRSP and make those
montnly payments to
yourself instead of an
outside lender.

And if you set a high
mortgage rate, won't that
build up the RRSP even
faster?

There is no simple answer.

So consider these two guide-
lines:

B How much is your
RRSP yielding at present? If
the mortgage rate (which
must correspond to current
lending, rates) would improve
your yield, then it could
make sense to hold the mort-
gage in the RRSP.

But if your RRSP is aver-
aging 10% a year and the
mortgage would yield only

This last point is partcular-

‘ly relevant for Canadian online °

shoppers. I’m ‘still reeling from
my Amazon purchase the

By the time the charges were.

ded to the:price and.con-
verted to Canadian fands, i

“could have picked up a com-
. plete anthology of Phil Collins:

it the local retail store and still
left over! a

Anan arte npt fo artract:
; Christrias; aan
many online stores are pro-.”.

_moting newly added features’

been successfully in place since
1982, So we know what we're.

All packagés include everything :
you need. Skils of board, boots,

. Showibeard Packages
From *399 tor 2 full scesoas

eee > will suppose
- pers often mention their ‘on- ©:
_cerns about privacy, sécu

“regards to the dreaded “ship-
:. ping and handlin, charges.

7%, it makes more sense to
pay an outside lender $7 for
every $100 borrowed while
your RRSP carns $10 tor
every $100 invested.

What happens if your
RRSP holds mainly (or only)
GICs and bonds in your
RRSP earning an average of
5%, for example, while the
mortgage would produce
7%? Well .

@ You must pay extra
administration and other fees
to hold your mortgage in .
your RRSP, both set-up and

Customer : service is.

and Web sho ping tools thar
a y improve <u cus-
tomers’ online shopping ¢
riences. My daughter is.we! pe
acquainted with some of these

“new tools. Many clothing sites :
. offer 3D visusls, and she can ~
, dress herself “virtually” in any

manner she wishes. It’s almost
a game, and I don’t have to

., drive to the mall and hang
’ . around like an impatient °

moron while she tries every:
thing on.

Many e-commerce sites are

finding that success is depen- .

. deat on that old “bricks and

mortar” virtue, customer Str-

vice. As competition in the vir- »

tual world heats up, live inter?

* action becomes essential to";
“group aré latc-to the game —
~anid as Interfiet consumers, °°

building a loyal customer base;

‘ generating sales and offering.

quality sales support," “<
The most innovative cl

“ment on a Web'site today

the notion of a “live person.”

“As you enter a site te featuring”

gage and RR

cngaing charges, This means
in the short term, it rarely
makes sense financially to fol-
low this route, especially if
the mortgage is viclding only
slightly more than the former
investments,

Over tie longer term,
however, a consistently high-
er yield produced by the
mortgage should gradually
ounveigh these extra costs.

The only way to see if you
should hold your mortgage
in your RRSP is to run the
figures, then compare those
projections with holding
other investments in your
plan while borrowing from
an outside lender.

To hold your mortgage in
your RRSP, your plan must
have the amount of the
mortgage in available or lig-
uid funds, which excludes
instruments like locked-in
GICs.

Ifthe $150,000 in your
RRSP is all tied up in your
mortgage, vou might have
trouble: drawing out any of
those funds in an emergency.
You'd need to switch to
another lender — nor casy if
you Were between jobs, for
example,

The rules aren't relaxed
just because vou hold your
own mortgage in vour RRSP.
In fact, if you don't make
payments, your RRSP -
which is a separate legal enti-
ty normally administered by
a trust company — could
foreclose on you.

Mike Grenby is a columnist:
and independent personal
financial adviser. He'll answer
questions in’ this column as ©
space allows but cannot reply
personally . Contact bim az

PO. Box 50029, Sonth® “Slope.

RPO, Burnaby, B.C. V5] -
5G3; email il mikeagrenty, com.

key to Web suce ess

this kind of customer service, a
small screen will pop up and |
“you will be invited to “chat”

“with a customer sales represen- -

_,_ tative. To view this new kind
“of real time virtual help visit

- cheep: //Awww! livepersen.com fe

/>.

As you begin to assault wee

your Christmas list, you may ~
want to consider the use of a a
Wels “bot.” This is your wet
based personal valet. Most: ©
“bots” are an Internet.com- --
parison shopping service that
search online stores, auctions,

classifieds and. buying groups ‘-..:
tor the gifts you may be con--

scene One'of the more

world: For ne, othe
_- phone number is'an pe
bility. Deal with:

reputable sites, look for the’
return and refund policies and
always pay with a credit‘card.

Wayne Flunter is president of.
the Noble Pacific Group, 8 me mm

. chant capital and fi

vices company. He bought bi
first computer in 1988 and is

an 1 expertenced "cybernaut".