3USINESS

Setting realistic goals key
to a successful money plan

Michael

YOU KNOW it normally
takes a day to crive to a par-
ticular destination.

But let’s say you don’t have that
.much tinze,'so you set out to make
-the.trip in half a day. You might
succeed if there’s little traffic on the

ad, if the police don’t pull you

i -over for speeding and if you avid

having an accident.
:,. But most people realize trying to
sake the trip in half a day is unreal-
‘istic, and would be unwilling to
take the risks involved.
‘According to George Hartman,
whose book Risk ls A Four Letter
Word (Stoddart, $16.95) has sold
some 30,000 copies, you should
ipply the same thinking to your
‘financial planning.
“One of the keys to managing
your money successtully is to set
‘realistic expectations on what you

4 can achieve,” Hartman said in an

:

Bs

| interview. “For example, people

ho made 20% in the stock market

last year and counted on that
growth to continue are now disap-
pointed to find they have lost per-
‘haps five-to 10% so far this year.

/ “You must realize investing is
an inexact science — or art. There

fe too many forces over which you
have no control. To reduce your
anxiety, accept there will be devia-
tions along the way, and allow for
them in your plan.”

Presiden and CEG

he North Shore Credit Union has achieved
Strong growth (assels grew by 50% during
& the past five years to 3510 million). is

x

The North Shore Credit Union provides a full
range cf banking, trust, and insurance services
through its nine banking and four insurance
branches. It serves five affluent markets. including
North and West Vancouver. Howe Sound/
Whistler, North Burnaby, and Downtown
Vancouver. Member surveys indicate the service

r financially sound (measured against capital
equity, liquidity and delinquency targets). and
has a pesitive community reputation as
“Partners in your Community,”

And, he added, you must have a
written plan, or at least a mental
picture of what you are trying to
achieve.

“L suggest people close iheir
eyes and imagine what they will be
doing on a Tuesday afternvon six
months after they retire,” Hartman
said. “Then | ask them to figure out
how much the scenario they picture
— travelling, playing golf, garden-
ing at home —- will cost and how
they plan to pay those expenses, If
ihe road they are on now won't lead
te the necessary funds, what do they
plan to do?”

Hartman said an investment

- Strategy to reach the desired objec-
_tive could be as simple as saving an

extra $300 a month, or as complex
as mortgaging the house or other-
wise borrowing to create a broadiy-
based portfolio of investments.

66 Your challenge is
to decide what level of
risk you are willing to

take and then under-
stand the implications

of that choice. 9®

-— Author George Hartman

“You reduce risk by. diversifying
and holding your investments over
as Jong a period as possible,” he
said. _

Hartman emphasized there is no
risk-free investment. While stocks
are risky because their value can
fall as well as rise in the short term,
term deposits also come with risk
because they can iose buyiag power
over the long term once you
account for inflation and income
tax.

“Your chailenge is to decide
what level of risk you are willing to
take and then understand the impli-
cations of that choice,” he said.

Hartman, 45, spent $3 years in
lite insurance and six years in
mutual funds, dealing more with
managing and marketing than with
selling products. He then set up his
own business as a consultant and
self-published his book. He sold
15,000 copies before turning the
book over to Stoddart to publish the
second edition.

“Until about 10 years ago, |
didn’t think too much about my
own financial planning,” said
Hartman. “Like most people, I'd
procrastinate.”

But Hartman did buy a house in
Toronto in the *70s — “probably
the best move I made, although [
don’t know if you can expect house
prices ever fo go up again as much
as they did then.”

He has also invested in a variety
of mutual funds, both on a regular
monthly basis and with lump sums
“when [ had them and it was an
appropriate time.”

Hartman’s first wife died in a
plane crash in 1989.

“That made me review my prior-
ities,” he said

He marricd Jane in December,
1992, “and she’s also helped me
realize there are snore important
things than wealth, like health, trav-
elling, literature, music, the pursuit
of knowledge.”

Jane, 40, who has worked as a
consultant for mining companies on
investor relations, is more adventur-
ous in her investments than George.

“P’ve put my money into mining
stocks but I guess I’m what you'd
call an active and informed
investor,” she suid. “It’s very
volatile — i’ve had both gains and
losses of 1,000% in a year -— but
I’ve done well.”

The Hartmans have just sold
their clear-title Toronto house and
are moving to Vancouver. Their
company still owns a condo in
Toronto.

Mike Grenby is a North Shore-
based columnist and independent
financial adviser who works with
individuals. He will answer your
questions in this column as space
allows — write to him c/o 2444
Haywood Avenue, West Vancouver
V7V IYI.

NE NORTH SHORE
re CREDIT UNION

Ponta ingoun Communi

Working closely with the Board of Directors and
masagement. the President will establish a clear
direction to increase market share and enhance
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You have a proven track record as a leader and
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iy in the financial industry
you are knowledgeable of the functioning of

Russ Johnston
Senior Advisor

Marlena Quan
Senior Advisor

ESTATE PLANNING
SAVE TAXES,
HELP OTHERS

Despite harsh economic
times, Canadians remain a
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A new approach to financial
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Planned gifts fail into nwo
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Present gifts

Cash. This is the most com-
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Gifts in Kind. If you have
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The tax credit you receive
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ed assets.

Certified cultural property,
‘The tax credit for these gifts

Deferred gifts

Bequest uader will. Your
estate will be able to claim a
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to 20% of net income in the
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Gift annuity. This is a con-
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Residual interest. You donate
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Charitable remainder trusts,
This is a trust from which
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Get professional tax and
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property is not taxable.

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calling Russ Johnston at
351-8550 or Marlena Quan
at 644-7535.

#59 ROYAL
24 TRUST