Seminars showed impressive level of investment smarts I AM pleasantly surprised to see how well people are managing their finances these days. i have just completed a series of money shows, speaking to more than 5,000 people over the past few weeks. These seminars have become annual events. But this year | was particularly im- pressed by the level of financial planning soohistication among the attendees, Yet when [I told some of these people — everyday folk thought they were doing very well, they were surprised to hear my comments. Take the young woman barely in her 30s. . “‘I have a very silly question,”’ she said almost apologetically. ‘I don’t really understand anything about most of the investments listed on your handout. How can I learn about them? “‘My husband and I have paid off our mortgage and don’t know what we should be doing with our money.” . First, | told her, you two have done very well to own a home without a mortgage so early in your lives. For most people, buy- ing a home is the first step in a financial plan and paying off the mortgage is the second step. “You may not think what you’ve accomplished is remark- able, but you’re well ahead of most of your contemporaries,”* I told the young woman. . She was pleased to hear my comments, but I could tell she still didn’t think what she and her husband had done was anything out of the ordinary. I went on to suggest she check adult education courses on in- vesting, read the weekend edition of The Financial Post or the Giobe and Mail (for its Réport on Business) and buy (or borrow) Canadian books on financial planning in general and investing in particular. Others at the seminars were in- volved in revenue property, Kiwanis receives funding THE KIWANIS Club of North Vancouver has received appreval of a $24,483 CO B.C. award to help purchase a van for transpor- ting the handicapped, Lois Boone, minister cf government services, has announced. Boone, minister responsible for GO B.C., said the club will pur- chase a wheelchair-accessible van to serve the intermediate care res- idents of the Kiwanis long-term care facility. The i6-passenger van will ac- commodate two wheelchairs and 14 walkers. ““The van will provide the senior residents with the mobility te attend social and recreational activities so necessary to maintain a higher quality of life,’ added Boone. “Many residents are am- bulatory and the van is equipped with special low steps and rails to assist in boarding.’’ GO B.C. is a provincial gov- ernment capital funding program which uses proceeds from lotteries to assist a wide range cf com- munity initiatives. Michael Grenby S a DOLLARS AND SENSE business and other investments. Many people had their own small compenies. Here’s a sample of some of the other questions that came up dur- ing the seminars. “Should | contribute to my RRSP or pay off my mortgage — especially as I can now postpone my RRSP contributions and catch up later?”” As a generalization, and without going through all the ca!- culations, I suggest contributing to the RRSP — provided you then use tax saved to pay down the mortgage. “Can I claim business expenses even if my business isn’t making any money yet?”’ As long as you have a ‘‘reason- able expectation of profit,’’ back- ed up by a sound business plan, g0 ahead. Ideally, you will operate as a sole proprietorship at this stage so you can then deduct these expenses as a business loss and claim them against your other in- come. “My wife started a business but has no other income so can’t claim her losses. Can EF go back and put the business in my name so I can claim the losses against my employment i:*ome?”’ North Vancouver +724 Lonsdale Avenue 980-3355, 1 wouldn't advise it. While Revenue Canada now allows you to go back as far as 1985 to re- quest a reassessment, | somehow think the department wouldn't took too favorably on this one. “Is this a good time to borrow against our home to invest in rev- enue property?*’ It’s always a good time to look, especially during uncertain times like these. Try to find an under- valued place you can fix up to generate more rent. The rental income (perhaps from several tenants) should cover all expenses. And find a place you’ll be happy to hang on to for up to 10 years, in case prices drop in the short term. “If I give my adult daughter a no-interest loan to help her and her husband buy a home, can that save me tax?’* You aren’t allowed to claim any deductions. But if you have less investment income, you will pay less tax. Be sure both daughter and son-in-law sign the pro- missory note or other debt obiiga- tion. “I receive a pension and am still doing some work.on the side. How much can J put into an RRSP?” For the 1992 tax year, you may contribute 18% of your earned income in 1991, up to $12,500. If you have a spouse, you may also put up to $6,000 of the pen- sion from your former employer {not CPP or OAS) you receive in 1992 into 2a spousal RRSP. “Can I really pay my 10-year- old $25 an hour to do computer work for my business?”’ Yes, if that’s what you’d pay an outsider to do the job. 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 Hi. Wednesday, February 26, 1992 - North Shore News - 37 ms) cocked with Black $/ i ge Ib. Bean Seuce “How do they manage to.do it?” WE MANAGE.TO OUTPERFORM. This chart represents the performance of Tamark Canadian Fund's 10 year average annual compound fate of retum to December 31, 1991 of 13.8%. 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