money matters OPEN your wallet and say “ah”: Your financial planning checkup is the same as a rou- tine physical checkup. You need to pass both to keep both your personal and finan- cial lives in top condition. Cheek off what you have done, circle the “to do” items: Make a one-page fist of what you own and owe, of your income and outgo. Then write down why and what you want to change. the steps to take and the names of people who can help. Mi Track expenses. Then use a priority list to plan ahead so expenses never exceed take- home pay (or other after-tax income). This is particularly important when a major change occurs — like a new job or no job (a layoff, one partner stopping work to raise a family, retirement). @ Pay off debt more quickly. It’s risk-free and tax effective, and requires no investment skills. B Contribute to a registered retirement savings plan both for the RRSP’s inimediate tax relief and long-term tax-free growth. @ Can’: afford the home you want? Don’t like what you can afford? Then see if a family member or other investor will lend you money or share the purchase. Perhaps find a place with a suite so the tenant can help with the mortgage. If you Assess your patience From page 15 investments decrease in the + short term while you wait for the long-term payof? You < need to consider how com- fortable you will be if your... investment fluctuates a great - deal ona daily basis... : c+ Although stocks have out- performed other investments over the past.two centuries, there have been some scary © periods along the way. If you had bought stocks at their: high just before the crashin 1929, the value of your port- folio would have lost ‘almost 80% of its value in'a short’ ' period: The value of your oldings would have dropped. 25% in one day ini October 1987. Would you be able to” x hold on — and sleep nights — through such rocky. periods? .Financial institutions“. (banks and credit unions, for xample) offer different kinds |: f GICs, which’ provide'a fixed : return on the funds invested.’ Federal and provincial govern- _ ¢ bonds, which are ‘guaranteed by. the | govern- ienit: GICs and bonds repre There is no ‘similar g guaran: ‘te with ‘stock i investments that. | AVAILAB MONDAY TO FRIDAY EXCEPT HOLIDAYS ; - you invest in good businesses _and hold for the long term. Just remember that the safest road isn’t always the best or most rewarding one. Sometimes the only way to discover your true tolerance for investment risk is to try out a few trades to see how you feel. Once you have owned a few stocks and lived with the fluctuations in their value and the returns they can generate over time, you will come to realize one of three _ things: o] hati it really doesn’ t matter if -your stock drops or rises over . the course of a few hours or “days or weeks or even months, because you are investing for “the Jong term and believe in “the quality of the company; *. Eithat ifyou have a fast trading system and good discipline, you would be comfortable “shortening your time horizon and actively trading in and out ofthe: stock price movements, taking - advantage of the stock - price. momentum rather than’ the quality of the company; or Wi that stocks are outside your’ risk tolerance. and you might ". want’ to have. professionals manage your money for you. "A final important part of _ assessing your risk tolerance - means knowing your invest- : ent time horizon — when ORDERS MUST: BE RECEIVED BY 11:00 AM ; AND WILL 8& DELIVERED THE FOLLOWING DAY. SATURDAY DELIVERIES ARE AVAILABLE BUT = RDERS MUST BE RECEIVED BY 11:00AM M FRIDAY. fs Do you need the money next month, or 20 years from now? Your answer makes a big dif- ference to which investment vehicles you should choose. You should not invest any money in stocks if you will need your capital or initial investment back in the short- term. If you have a short time herizon, you shouid not invest have adult children, helping them buy housing could pro- vide personal and financial ben- efits all around — as fong as everybody feels good about the arrangement and it’s legally documented. @ Save and invest on a regular basis. Use automatic savings programs (at work or through your financial institution) to implement the “save first, spend what's left” approach. B Try to put money into as many as possible of the four basic investments: guaranteed (for safety), the stock market (possibly through mutual money that you can’t afford to lose. If you have a longer-term horizon, then you can afford to ride out the inevitable ups and downs that come when investing in stock markets. The second variable to consider is the amount of time you want to spend researching “investments and managing your portfolio. Do you want to spend five minutes at the end of each year checking the value of your investments in order to prepare your taxes? Sunday, September 24, 2000 — North Shore News - 19 —— BUSINESS — checkups needed funds), revenue property and a business. Consider internation- al investments, starting with foreign currency accounts, stocks of companies that do business outside Canada and foreign securities. @ Start a sideline business to provide extra income and claim deductions not ordinarily avail- able to employees. Perhaps you save tax by paying family mem- bers in a lower tax bracket to work in your business. Having a business could allow you to retire sooner and continue to work on your own at least part- time after retirement. Do you have four to six hours a week that would allow you to research and pick a few stocks? Or do you want to be a Day Trader and trade your portfolio as a full time job? If you don't want to spend much time thinking about your investments, then your best route would be to use a professional money manager or invest in mutual funds rather than do it yourself. . When managing your own portfolio, the amount of time & Review your security and protection, the insurance you have on your life, health (dis- ability as well as medical, dental and travel), home and rosses- sions, car, business and invest- ment property. & Have a current will and power of attorney. Mike Grenly is a columnist and independent _ personal financial adviser. He'll answer questions in this colunin as space allows but cannot reply personal- fy. Contact him at PO. Box 50029, South Slope R.P.O., Burnaby, B.C. V5] 5G3 or e- mail . you can dedicate to it signifi-. cantly influences the results you will have. Investor, know thyself —_ ° your risk tolerance and the - amount of time you want to spend on your investments mav be the best advice for anyone when determining an. investment strategy. : ‘ Rod Strects tsa - “ North Vancouver resident and head: instructor at Vancouver's Swift” Trade Securities, a day trading |. scheol and trading house. ©. : Help us raise money for pediatric cancer research and support programs © < for kids with cancer in BC. ms ; Support Your Cc Rider In: _ The Goal , This team - - spirited, community event involves. 20 riders’ “ona 6G day,600 km bike tour thoughout the Lower | Mainland. With your help, our goal is to raise $250,000 in order to. “support cancer research and child related cancer projects. "The Team Team Members are with RCMRMunicipal Police and. 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