24 - Wednesday, January 1, 1992 — North Shore News BUSINESS Money show will focus on tax tips and traps STEP RIGHT up, folks, it’s showtime once again! Come on your money, while your debt is ning books. Protect yourself against an un- p 8 ’ cheque or claiming a refund when * For example, simply paying off -debt invalves income tax principle. see the daredevil financial advisor balance not one, not two, but three — count them, three — budgets with a single $7.99 calculator. Watch tax collectors jump through flaming hoops — and come up empty-handed. Marvel as low-risk investments produce amazing profits. All this excitement will take place at The [992 Mike Grenby Money Show. With its theme of 33 Tax Tips and Traps, the semi- nar — which covers far more than just income tax — could easily save you hundreds if not thou- sands of dollars over the years. Co-sponsored by the North Shore News ard The Certified General Accountants Association of B.C., this annual event will also feature a variety of invest- ment and tax experts. They will explain iheir products and services on an individual basis and, par- ticularly in the case of the CGAs, answer specific income tax ques- tions. Revenue Canada is always a part of your life, whether you are starting your first job, planning to buy your first or next home, start- ing or raising a family, saving or borrowing for a major purchase, ‘running your own business, plan- ning your retirement or worrying about how much tax you pay now you are retized. So you need to be aware of both the tips and the traps inherent in tax planning. A special feature at this year’s money show will be a simple chart you can use to help pinpoint your risk tolerance in the investments you are planning or already have made. If you have a personal/ financial partner, you should complete this chart separately and compare the results. - The seminar includes a slide presentation and a handout (available only to those who at- tend) which summarizes the 33 tax . tips and traps. The 1992 money show will be held Saturday, Feb. 8 at Carson Graham Secondary School, 2145 Jones Ave., North Vancouver. More than 25,000 people have at- tended these shows, which often sell out. As | said, there’s far more to : income tax than sending Ottawa a you file your return each spring. If you have an extra $1,000 (which you don’t plan to spend), Program explores N. Shore THE NORTH Shore Neighbour- hood House (NSNH) is hosting a weekly organized walking program Wednesday evenings from 6:30 to 7:30 p.m. beginning Jan. 8. The group Jeader will take par- ticipants on a walk around the neighborhood starting from and ending at NSNH. Besides maintaining fitness, this program provides an excellent op- portunity to enjoy the North Shore, explore the neighborhood and meet new friends. Everyone is welcome. The walking group is an ongo- ing program with a drop-in fee of $2.50. Participants who have an Active Living/Fitness membership from the North Vancouver Rec- Centre can attend at no cost. For more information phone 987-8138. NSNH is located at 225 East 2nd St., North Vancouver. Michael Grenby DOLLARS AND SENSE you might wonder whether to in- vest the money or pay off some of those bills you ran up with your holiday spending. Paying $1,000 on a credit card account is the same as earning 18 to 33% on your money —- after tax. And that’s the same as earn- ing a guaranteed 30 to 56% inter- est befcre tax if you are in the 41% tax bracket (with taxable in- come between about $29,000 and $58,000). Since you can’t earn 30 to 56% interest — or even ‘‘only’’ 17% interest if you are paying off a 10% mortgage — you obviously should pay off your debt, right? Well, not always. In these uncertain times, you might be worried about your job security. Or perhaps you have taken the offensive and are starting up on your own. If you lost your job or ran into difficulties with your business, you might have a tough time bor- rowing. In this case, keeping your $1,000 in reserve might make more sense that paying down on your debt. You earn only 4 or 5% after tax sull costing you 10 to 33%. The difference in the rates is like an insurance cost: if you do run into financial problems, you know the money will be there. If your job is secure and you see an investment prospect that could well provide an after-tax return higher than the cost of your personal debt, you might be tempted to use your cash for that investment. Once again, you should proba- bly pay off the debt first. Then you could take out another loan and use these borrowed ftinds for the investment. Now, because you borrowed to invest, you might be able to deduct the loan interest — which you couldn’t have done be- fore with your personal loan. As you can see, not only do you need to consider income tax prin- ciples when you make a decision as simple as whether to save/ invest money or pay down debts, you also have to watch out for a possible trap if you follow what appears at first to be a tax tip. Paul Starita’s 10 Command- ments of Investing are made for New Year's resolutions. You migit like to review these points followed by his and my comments (Starita is president of Royal Trust Investment Services) to in- spire you to choose the ‘‘com- mandment’’ you are most likely to follow which will, ideally, produce the most rewarding results. @ I must establish my goals in writing. Be specific: not just you want to have more money but that, for example, you will have your financial institution automatically transfer $100 or $1,000 to a spousal RRSP every month, Write down steps to take and deadlines. | @ I will understand the basics of investing. Read the business news in the paper, borrow or subscribe to financial papers and newslet- ters. Attend seminars. Buy or borrow “‘how to’’ financial plan- @ [ must combat the evil of infla- tion. Look for long-term invest- ments that give you a chance of keeping ahead of inflation. @ 1 will always minimize taxes. Use tax shelters like RRSPs and RESPs (registered retirement and education savings plans). Take advantage of the $100,000 capital gains exemption (while it’s still around) and the dividend tax credit. Shift income to family members in lower tax brackets. @ I will always pay myself first. Set up an automatic savings pro- gram and live on what’s left. @ | promise to make maximum RRSP contributions early — or feast on a monthly basis. @ I will difersify my portfolio. predictable future. @ I won't rely on the govern- ment. And while you're at it, check your company pension plan too. @ I won’t procrastinate. @ (will ... — and here Starita suggests you give something to the community — morally, materially, financially — ‘‘to add soul’’ to your financial planning. 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 2H4, (at our new iocation since March 41990) 655 W. PENDER (Rogers Bidg.) SALE CONTINUES — ‘681-6811 ¢ WHITE CROSS © CELEBRITY SELECTION OF e HELENA SANDALS Reguiar to : SALE. $98.00 648 s7900 8469 OPEN 9 A.M. - 5:30 P.M. MON. - SAT. INSTANT DISCOUNTS _ON ALL MAYTAGS!