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Wednesday, February 9, 2000 THE OAKVILLE BEAVER Helping Clients Expand Their Possibilities UNIS Technology integration with expertise in e-Business, voice & data communications networks and security w w w .u n islu m in .co m The "No-Nonsense" A pproach to FINANCIAL INDEPENDENCE Strategies for DOUBLING NET WORTH in 5 to 7 yrs Photo by Barrie Erskine 12 RRSP planning points Protect investm ents from market corrections Year 2000 market forecasts Some o f "Our Best Ideas" How to develop a realistic financial plan Jelco Construction Ltd., officially opened its new offices at 1124 South Service Rd. W., last Thursday. Shown from left to right are Steve Rees, Northern Indemnity; Lorenzo Wallace, LJL Associates; Melissa Hamilton, Jelco; Angie Contento, CIBC; Glenn Roberts, Jelco; Ed Favot, accountant; Mayor Ann Mulvale; John Belsito, president o f Jelco; Loris Savio, vice-president, Jelco; Stan Kolenc, Jelco; Brenda Kecskes, Jelco; Joe M amarche, Jelco; and Barry Stasiewicz, Jelco. JE L C O GRAND OPENING: Tax & financial planning tips for individuals and entrepreneurs Year 2000 tax planning tips Secure investments offering higher returns than GICs Financial planning for future Financial planning is easy - it is anticipating your future needs that is the challenge. Research shows that people have a difficult time looking ahead and that can be a problem. How can you plan for something that you cannot imagine? Ideally, you want to look at your entire life and start planning young but if that is too daunting, one idea is to look at your current life stage in 10-year incre ments. Put in place now, the steps that will make you financially successful 10 years from now. When you are in your 20s, think what you will need during your 30s and start putting that together as early as possible. You may have just finished school, so while your financial responsibilities are limited, save hard now and put together a down payment for your first house. Though you may not buy the house for years, the compounding will make those mortgage payments smaller than they otherwise would have been. In your 30s, imagine what you will need during your 40s. Do you have young children who will be going to post-secondary education? It is much better to establish educa tion savings plans when your children are young. By taking advantage of the government grants on RESPs and the years of growth, the amount required now will be a small fraction of that need ed when the children go to university at 18. For example, if your child is two years old, you will need to save $ 120 per month now (assuming 10% returns) to pay for a four-year university degree. If you waited and paid during their tenure at university, it would cost approximate ly $ 18,600 per year or $ 1,550 per month. Now jum p ahead 10 years and imag ine what you will need during your 50s. With your children's education taken care of and your mortgage almost paid off, due to your valiant efforts during your 30s and 40s, you can now focus on retirement. Do you want to retire early at age 55 or do you want to buy a retirement prop erty? The expenses of having a family are still high but any money you can put aside now, however small, will have years to grow and compound, which will make a difference when you retire. For example, let's compare two situ ations where you save $20,000 at a growth rate of 8% per year. In the first case, you save $1,000 pr year for 20 years from age 40-60. At 60 you would have approximately $49,400. In the second scenario, you wait 10 years to start saving, then save $2,000 per year from age 50-60. At age 60, you would have approximately $31,300. In both cases you saved $20,000 but the extra 10 years made a difference of just over $18,000. As you enter your 50s, consider what you will need during your 60s. If you were successful in your forward plan ning so far, you will have a good foun dation of assets that will take care of your basic needs during retirement. What you need to do now is to save aggressively to ensure you can enjoy your retirement with all the extras you have dreamed about as well as build a sound safety net for potential problems you may face. For example, your career may be approaching the high-risk years when your company can replace you with a younger person for a fraction of the salary. Or you may be among the grow ing number of Canadians whose parents will turn to them for financial help to pay for retirement and nursing care. Any of these situations can seriously hamper you meeting your retirement lifestyle. During your 60s, you will look for ward to your 70s and 80s. How long will you and your spouse live? If you are both in good health, it is likely one of you will live into your 80s, if not 90s. Will you sell your home or keep if for your entire retirement? IF you choose to sell or are forced to sell due to financial constraints, the timing of the sale should be incorporated into your overall retire ment plan. You will also need to consider what type of investment portfolio you will maintain, now that you no longer gener ate earned income. If you are like most Canadians, you will need a certain amount of growthoriented assets like stocks or stock-based mutual funds to ensure your retirement assets last your entire lifetime. While ROBERT BIN NIN G TO N, B.C om m ,C .A . FINANCIAL CONSULTANT, RETIREMENT SPECIALIST PETER WATSON Dollars & Sense fixed income investments such as bonds and GICs are comfortable, they current ly provide rates of return so low that many investors begin encroaching on their capital, dangerously soon into their retirement. And there you have it, your basic life stages broken down into easy-to-manage 10-year increments. Once you have mastered the chal lenge of anticipating your future needs, you can set your goals and begin to plan accordingly. Peter Watson, M BA, CFP, RFP, is the president o f Peter Watson Investments -- an Oakville firm spe cializing in retirement planning, RRSPs, and investment planning. He can be reached at 842-2100. Providing ongoing fin a n cia l advice to individuals and entrepreneurs since 1991 TMTbe L e a d in g I n d ic a to r . Wood Gundy Private Client Investments is a division of CIBC World Markets Inc., a subsidiary of Canadian Imperial Bank of Commerce and Member CIPF. WE INVITE YOU TO ATTEND ONE OF OUR SEMINARS to be held on the following dates: For individuals: February 1, or February 15, 6:30-8 p . m . For entrepreneurs: February 2, or February 16, 6:30-8 p . m . OAKVILLE CHAMBER COMMERO a G ro w in g Y our H ome Based Business P le a se C a ll (9 0 5 ) 5 2 6 -4 7 9 9 , o r TOLL FREE 1 -8 0 0 -2 6 3 -2 1 6 7 to reserve your seat A ll a tte n d e e s w ill receive a COMPLIMENTARY COPY o f P e te r L yn ch 's th ir d b o o k le t f e a tu r in g COMMON SENSE INVESTMENT STRATEGIES NOTE: IFY0U WOULD LIKE A MORE I1VDIVIDUAL APPROACH, A PRIVATE MEETING CAN BE ARRANGED. MONTHLY SPEAKER SERIES Computerization for Success Log on with: Mike Haines Co-sponsored by: Lemarchand Foster, Small Business Advisory Group Inc. & Business Advisory Associates · User needs assessment · Hardware configuration · Software selection · Security, data back-up & more MIKE HAINES F e b ru a ry 5 th , 2 0 0 0 6 : 4 5 p.m . - 9 :0 0 p .m . Ramada Inn & Convention Centre 3BO Oakville Place Dr. FREE Admission & refreshments For All our RRSP Variable Rate Savings RRSP "Your Choice" Term Deposits ^ 5 Yr. Accelerater Term Deposit & Premium Choice Investment Certificates The Family Of Ethical Mutual Funds*' & 100 Of The Top Name Mutual Funds" ^ Index-Linked Term Deposits First Ontario Fund' ^ Performance.Com 5 Year I Equity-Linked Term Deposit The P o w e r of N e tw o rk in g Connect with: Donna M esser Co-sponsored by: The Halton Peel Enterprise Development Centre & Joel Munn, Market America ^ Needs · Why do you network · How to network · Where to network DO NNA MESSER M a rc h 2 1 , 2 0 0 0 6 :4 5 p .m . - 9 :0 0 p .m . Ramada Inn & Convention Centre 3BO Oakville Place Dr. FREE Admission & refreshments Media Sponsor: T h e O a k v il l e B e a v e r MY BANK has just made More Time for 6. 50% 5-Year A ccelerater Term Deposit 3 Year "Your C h o ice " Term Deposit GREAT R ates F rom Y our RRSP H ead q u arters 8.00 G u a ra n te e d 5 th y ea r rate. R ates su b ject to ch a n g e w ith o u t n otice. E. & O. E. W e've e x te n d e d our hours Oakville Place, Town Centre II, and Milton Mall Branches Monday - Wednesday Thursday & Friday Saturday 10:00am - 4:00pm 10:00am - 8:00pm 10:00am - 3:00pm To Discuss Your RRSP Needs Call Or Visit The Branch At 60 Lakeshore Road West 844-4881 AVESTEL F A M IL Y S A V IN G S C R E D I T U N I O N w w w .avestel.com **M utual Funds and Ethical Funds are offered through Credential Asset M anagem ent Inc., a w holly-ow ned subsidiary o f Credit Union Central o f Canada and are not insured nor guaranteed, their values change fre quently and past perform ance may not be repeated. *First Ontario Fund is a Labour Sponsored Investm ent Fund (LSIF). Im portant inform ation is contained in the prospectus available from your Credit Union. First O ntario Funds are not insured nor guaranteed. ® Registered trade mark o l Bank of Montreal. B a n k o f M o n tre a l