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MM4 - 16-The Canadian Champion, Fniday, February 6, 1998 Balance and diversification _________are key to building wealth Doug Conley Retirement Specialist VP of Wood Gundy Private Client Investments More than 18 years experience in the investment industry! Robert Binnington B.Comm, CA Financial Consultant Retirement Specialist Providing ongoing financiai advicc 10 individuais and entrepreneurs since 1991 e' Strategies for doubling net worth in 5to 7years ~fTax & financial planning tips for entrepreneurs f12 RRSP planning points ~(1997/98 tax planning tips toe Secure investments offering higher returns than GICs ~/Protect investments from market corrections ~(1998 market forecasts v~Some of our "Best Ideas" Group of Fds,nnic MurtI WodG nd rve',ClientS n dj Lntisa'division ofCFIniCiood JComrce arond mbr IPFrJvsnnMaaecrn Once you are ready to make your RRSP contribution, either with your own funds or with the help of a Scotia RRSP Catch-Up Loan, you are faced with a decision about how to inveat the money. The beat approach is to make aure that al your RRSP money does not go into one basket. In the long run - which ia what RRSPs are ail about; a weii-balanced, diversified portfolio will both reduce risk and improve retum. This tneans that a selection of investments across the asset classes of Cash, Income, and Growth, is best. Studies show that such a mix- ture calied "asset allocation," accounts for as much as 80% of a portfolio's long-term performance. And yet, no single asset mix is right for everyone. The first step, therefore, is to determine what's right for your portfolio. 'his begins with the Scotia Investment Selector, a simple questionnaire from which your Scotiabank Personal Investment Manager or Personal Banking Officer can gather information about your financial status and your financial status and your attitudes towards investing. The end result? An investment mix tailored to your specifîc needs. Depending yon your age and the complexity of your circumstances, may be used to further refine your plan. If for example, you have 15 - 20 years left for retirement saving, for example, the Scotia RRSP Reaiity Check will show how much you must contribute every tear to achieve your retirement objectives. Whatever your optimum asset mix, almoat every portfolio in today's iow interest rate environ- ment requires some growth invest- ments, from as low as 10% to as high as 75% or more. To meet these needs, we have designed a number of growth-oriented equity products that can be taiiored to your necds. other Scotiabank diagnostic tools Provided by Scotiabank, Milton Do I have enough.? Thinking about retirement? Try this quick exercise to find out if you have enough accumulated savings to meet your retirement needs. Add up ail your assets, including house and other savings. Next, estimate how much money you would spend each year, if you had no other income (Le. - retired). Now, divide your accumulated savings by the annual expense number. Congratulations, you have just created a very rough financial planning ratio, called the Wcalth-to- Consumption Ratio, or WCR for short. Heres how it works. The premise is simple. Your accumulated wealth wiIli dissipate at the annual expense rate. For example, someone with a net worth of $ 150,000 and annuai estimated expenses of $30000 wilI exhaust the sav- inga in approximately 5 years ($150,000 divided by $30000). For someone who is 43 years of age, the above exampie is not very prrsmising. You would have exhausted your entire savings before you reach 50! So, lets assume you are going to work for a little whiie longer and allow those savings to grow. Try another simple financial technique - the 'rule of 72'. Pick a number that represents the annual intereat rate you expect to eamn on your accumulated savings. Then, divide that number mbt 72. The result is the number of years il will take for any sum, compound- ed annually, to double in value. For our example above, if we choose 8 as the annual interest rate and $ 150,000 as the sum lo be invested, then in nine years (72 divided by 8), $ 150,000 wiil have doubled to $300,000, At age 52, our WCR now stands at 10. Fast forward another 9 years to age 61, and our WCR ($600,000 divided by $30000) represents a more reasonabie 20 years before savings are exhaust- ed. Finaiiy, at age 70, the accumuiated amount is aimost $ 1,200,000 and our WCR is now 40, and sav- ings wiii no( be completeiy expcnded until age 112. The WCR and the 'Rule of' 72' are flot compiete planning bools. The above exampie excludes the effects of inflation and any eamnings during the period when savings are being drawn upon. It is intended as a rough guide that anyone can, in a few minutes, esti- mate if thcir current situation approximates future needs. Pro vided bY Bob Reid of Donaldson Bourgon. M ilton Make the most of il So you've got the RRSP message and your soid. Weli, its flot over - April means income tax time. 1 urge you to meet the April 3th fil- ing deadiine even if you can't afford 10 pay ail your outstanding taxes. You'Il owe Revenue Canada 5% of the taxes flot paid if you miss the deadline. And your debt to the feds wiii increase by i per- centage point for every fui! month thereafter. Plus you have 10 pay interest, compounded daiiy, on the unpaid taxes you owe. And that intereat, set quarteriy, can be rela- tively steep. Then, when you get your refund in a month or so, I urge you flot 10 blow it on frivolous expenses. You can use it to improve your finan- ciai picture in the foilowing ways: - Contribute to your RRSP. The more money you can get mbt your RRSP, the longer it will have to grow, tax-free. If you weren't able to come up with the maximum e*800 MOST 0F on 16 - MM4 Di o ro ieysefta ... Well February 29th is just around the corner. You need our heIp. Ta&k to the Experts. 693-1100 ?inaciaiAlllr MIDLAND WALWYN BLUE CHOP THINlCING- Spansored in part by: MIDLAND WALWYN CAPITAL INO. 18 A MEMBERI- hnuestors INVESTORS 1, GROUP FINANCIAL SERVICES INC. IT'S RRSP TIME* *Appointments Set at Vour Convenience (Cali anytime between Now and March 1, 1998) Cal!:r JIM G RDONOR DROP-IN JIM G RDON69 MAIN ST. 3S75-Il771 IEAsT< medicai m 1 1