ae 62 - Wednesday, December 14, 1988 - North Shore News | BUSINESS KNCW YOUR PRIORITIES Have debts paid off before retiring YES, THERE can be life after debt. (You will be pleased to hear that, as you credit card your way through last-minute Christmas shopping.) “Three years ago my husband and I went through bankruptcy,”’ writes a reader. “I am 57, now on my own and earning $24,000 a year. 1 owe nothing on my credit cards at ihe moment (they have $1,000 limits or greater) and oniy $600 on my car loan. And I have $10,000 in sav- ings. “}T have been thinking of buying a $60,000 home with monthly payments around $650. But that would take a bit of a squeeze as I now pay only $450 rent. I'd like to tetire at G5. ‘*What do you advise?’’ Ideally, when you retire you should aim for three objectives: (1) Own your own home. (2) Be debt-free. (3) Have replaced major dollars and sense Michael Grenby Po consumer and household items (car, appliances, renovations and so on). You have done well keeping out of debt. One point: if the interest rate on your car loan is higher than on your savings, consider paying off the balance of the loan. Another thought: now that you have re-established your credit, consider putting away your credit cards. Even though you usually pay them off in full, you will spend more with cards than with cash and cheques. Now, should you buy a home? The answer depends largely on the lifestyle you plan after you retire. Some people are hardly ever home, either travelling or out in the community every day. They are happy to rent a small place because they rarely do more than sleep there or use it as a base between trips. Others attach far more impor- tance to their homes. They find it rewarding both emotionally as well as financially to own their place. Financially, in a normal real . estate market, you usually come out ahead if you buy and stay in your home for at least five years — unless you rent instead and then invest the difference very suc- cessfully. You must also dec... on your priorities. Would you rather have more money to enjoy life for the next eight years, or manage on less now to provide more financial security after you retire? If you decide to spend now and rent later, you should probably be making maximum contributions to a registered retirement savings plan. You should learn how to invest your $10,000 as successfully as possible, aiming for the highest growth yet still being able to sleep well, When you retire, you should continue to learn how to manage and invest your money, to_make sure it lasts as long as you do. If you decide to buy, consider looking for a compatible partner to share the purchase price of a home. You might jind a place with separate living areas, to provide both more privacy and more home for your money. To help you choose the right route to follow, write down each option on a separate sheet of paper. Under each choice, list the pros and cons. Now, which choice looks the more comfortable — personally as well as financially? Even if you decide not to buy at the moment, you could change your mind in the future. If you do buy, try to have your mortgage paid off by the time you retire. kek Based locally, Mike Grenby writes a money column which ap- pears in newspapers across Canada. Although he also works as an independent financial ad- viser, ike will respond to readers’ questions and story ideas through the paper. Write to Mike Grenby, Money BC Rail posts earnings THE BRITISH Columbia Railway group of companies announces unaudited consolidated net income of $41.2 million for the first nine months of 1988, compared with net income of $39.9 million over the corresponding period in 1987. Railway operating income for the first nine months was $61.7 million, compared with $59.1 mil- lion for the first nine months of 1987. Revenues for the first nine months of 1988 totalled $247.0 million, against $243.4 million for the first nine months of 1987. Carloadings decreased three per cent from 175,205 to 170,050. This i’S AMATTER OF LiFe ANC 4) British Columbia Lung Association 906 West Broadway Vancouver, British Columbia V5Z 1K7 is attributable to larger individual car capacity, maximized loading of lumber products, lack of woodchip stockpiles and reduced shipments during mill modernizations. BC Rail Ltd., the operating sub- sidiary of the British Columbia Railway group of companies, an- nounces a net loss of $5.3 million for the first nine months of 1988, after interest expenses of $66.9 million primarily paid to British Columbia Railway Company and BCR Properties Ltd. This compares with a net loss of $1.7 million for the corresponding period in 1987. BREATH Columnist, North Shore News, 1139 Lonsdale, North Vancouver V7M 2H4. Mike cannot reply in- of your letters as possible in his dividually but will answer as many column. Everyone offers personalized mortgages. * Open or closed mortgages ¢ Flexible payment plan ¢ Pre-payment privileges ¢ Pre-approval Comm USE THE NE’ years. 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