43 - Wednesday, Mareh 7, 1990 - North Shore News

BUSINESS

Saving after 45 is riskier but still recommended

DAVID CHILTON, Carol (among others) are a litthe annoyed because | quoted Michael Ryan, who

and Nina Schaubs at me. And it’s all suggested there’s not

Young

much point saving until you are in your 40s.

**t have been a fan of yours for years,” writes Young. ‘‘But | am puzzled by two recent columns. First, you quote Michacl Ryan urging peaple under 45 not to save. Then you quote other advisers urg- ing us to save as carly as possible — a direct contradiction.”

Chilton, author of ‘‘The Wealthy Barber,’’ a chatty guide to managing money which has sold more than 30,000 copies, said:

‘*Along with hundreds of thou- sands of other Canadians, I con- tinue to enjoy your weekly col- umn, which makes financial! plan- ning not only understandable — a rare feat — but also entertaining.

“However, I must take excep- tion to the views of Michacl Ryan presented in a recent column. 1 think his advice to under-45s to

spend their money now and worry .

about financial planning later is unsound.

“‘In fact, I believe procrastina- tion is the major reason why so few Canadians ever achieve their full financial potential.”

Added Young: ‘‘I sure hope my daughter didn’t read that column, because when she's 45, she'll be starting to put two children through post-secondary educa- tion.”

And from Schaubs: ‘‘it is mis- leading advice tike this that gets young people off on the wrong foot when their finances are con- cerned.”

Ryan, vice-president of Leith Wheeler Management Lid.,_ in- vestment counsellors, said under- 45s rarely have enough experience or spare money to make effective decisions about the future of their lives and finances.

By the time you are 45, you usually have a clearer picture,

4. fees

persons who wrote.

J.D. Allan, Municipal Clerk 1990 March 02

THE CORPORATION OF THE DISTRICT OF WEST VANCOUVER

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Please be advised that on 1990 February 12 Coun- cil adopted a resolution banning outdoor residen- tial burning subject to a two year transitional per- mit system. Burning will only be permitted on days where meteorological conditions are appropriate and no fire hazards are present.

The bylaw currently being drafted will be available to the public on 1990 March 19 and forwarded to Council on 1990 March 26. It will contain details of:

1. when burning is permitted: 2. the maximum number of fires per year; 3. administration and inspection requirements;

5. notification process for neighbours;

6. materials allowed to be burnt.

A pamphiet on proper burning techniques and com- posting of material to reduce the waste stream at source is under preparation — as are discussions on chipping facilities with other Municipalities. Due to the very large volume of correspondence for- warded to the West Vancouver Council regarding the outdoor burning issue, this advertisement is in- tended to formally acknowledge and thank those

Ryan said. ‘‘You are more settled and can face the reality of what lies ahead."’

Young challenged me to “tell us what you really think’? instead of just quoting others.

dollars and sense

Michael Grenby

Personally, I feel people should get into the habit of saving as carly as possible, although probably for short-term goals like buying a home, paying off debts, taking a major trip, perhaps even helping with children’s education and building funds for emergencies, opportunities and paying large bills.

But | agree with Ryan that most people cannot — or will not — engage in serious financial plan- ning for retirement until they are in their 40s,

Sure, putting $1,000 a year from age 18 to 25 (total invested, $7,000) into an RRSP earning 10 per cent will grow to the same

amount as putting $1.000 a year into the same plan from age 25 to 65 (total invested, $40,000). But between ave 18 and 25 even 35 or 45 — retirement saving is rarely a high priority.

Chilton, who is now working on his second book, ‘The Ultiniate Guide to Losing Money,”’ points out the sooner you get into the habit of saving money, the easier it will be to accumulate wealth for the rest of your life.

“If someone is accustomed to living up to — or beyond — his or her means, it’s not easy to sud- denly become a super-saver,"’ he said.

Ryan said many people experi- ence major one-shot financial events (like inheritances) in their later lives.

“But that’s only the positive half of the picture,"’ said Chilton. “Other one-shot financial events include being laid off, early retirement, divorce and taking on a parent as a dependent.

“So it’s the person who doesn’t begin to save early who has to worry about an uncertain future, not the person who does save."

Chilton said people who start saving while they are young are often happier and more relaxed than their ‘“‘I°ll worry about it Jater’’ friends.

“Truc, non-savers will have a bit more money to spend than savers,’’ he said. ‘‘But if you know your financial future looks bright, you will have a feeling of security which more than compensates for the small amount of restraint re- quired monthly.”

Another problem with starting to save later in life concerns in- vestment risk, said Chilton.

If you have only a relatively short time to accumulate funds be- fore you need the money to sup- port your retirement, you might tend to favor guaranteed invest- ments (savings certificates, Canada

Savings Bonds, Treasury bills) with their relatively fower rates of return,

“The tradiuonally better returns offered by instruments like mutual funds, stocks and real estate are not guaranteed,” Chilton said. “These are better suited to people who don’t need to call on their in- vested funds for several years.’*

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