The Rural Voice, 1998-03, Page 18"There is only one
important item in an RRSP!"
IT'S
YOUR
MONEY
By Paul J. Rockel
Chairman, Regal Capital Planners Ltd.
(NC) — Saving taxes! It's my bet that
the biggest majority of Canadians put
money annually into an RRSP
(Registered Retirement Savings Plan) to
save taxes. They think that is the most
important element in their RRSP.
In fact, a friend of mine often states
that RRSP's should not be called by that
name, but rather as-RSP's," namely
REBATE Savings Plan, because most
people use them to get a rebate on their
taxes.
Yes, we don't deny that saving taxes is
an important reason for using an RRSP
But your future retirement is also
important, and the amount of dollars
available for that retirement are equally
important (and maybe even more
important than just saving taxes).
The reasoning the Government used
for setting up RRSP's was to encourage
you and I to save dollars for that future
retirement. The incentive used to get us
to save was the tax -deductibility of those
RRSP savings. After all, if all of us used
RRSP's and became wealthy for our
retirement (which is possible for all of us),
then the Government would save millions
and billions of dollars by not having to
pay us the Guaranteed Income
Supplement (which over 50% of retired
Canadians need) which is paid over and
above the Old Age Pension to everyone
who is retired and existing at the poverty
4 REGAL
CAPITAL
PLANNERS
LTD.
406 Wallace Ave. N
Listowel, ON N4W 1 L3
level
Saving taxes is indeed important, but
you save the same amount of taxes
whether you put your RRSP dollars
where they earn 10%, or where they earn
12%, or 15% or better. The tax savings
are not related to what you earn, but in
relations to the amount you invest and
the rate of tax on your income.
To me, rate of return is equally
important as the current tax savings. If
there were three neighbours each saving
$2,000 per year, each 30 years old, and
investing that $2,000 yearly through to
age 65, if one earned 10% she/he would
be worth $596,253, the one earning 12%
would be worth $996,926, and the one
achieving 15% would be worth
$2,026,691.
Wow! Rate of return is important,
maybe even more important than the tax
savings.
111 take the $2,000,000 ($2 million) any
day, rather than the $596,253, or
$966,926. And, I feel confident I can
achieve 15% average per year, because
some good mutual funds have long-term
records equalling that, and better.
Paul J. Rocket is the author of the best
seller "Why I Invest In Mutual Funds' and
Chairman of Regal Capital Planners
Limited, a 29 -year-old financial planning
company with offices from coast to coast
in Canada
Bus. (519) 291-1353
1-800-291-1353
Res. (519) 347-2569
Susan Carter
Financial Consultant
SOME OF OUR PRODUCTS AND SERVICES
Top Paying RICs, Tax Saving Strategies, Mutual Funds, Labour
Sponsored Mutual Funds, RRSPs, RRIFs and Annuities
(The above list represents only a few of the many financial services available
through your Regal Financial Centre.)
This is No. 1188 in a series of articles that have been appearing in newspapers and
magazines across Canada for more than 15 years. For Paul J. Rocket's book "WHY I
INVEST IN MUTUAL FUNDS" contact your local bookstore or Regal Capital Planners
Ltd., telephone 291-1353.
SERVING CANADIANS SINCE 1968
14 THE RURAL VOICE
Grain Markets
Prices historically
good but seem low
By Dave Gordon
A number of events happened over
the past month that have had, and will
continue to have, a great affect on
grain prices in Ontario. First of all the
Canadian dollar made a low not seen
for over 100 years at just over 68
cents U.S. Secondly, the USDA is
"stepping down" the export figures
for corn and, to a lesser extent, soys.
Thirdly, South America has started to
harvest their soybean crop and the
first soys are now reaching export
position. Finally, South American
corn from Argentina has been
purchased by North American users.
None of these factors are positive
for Ontario grain prices. In fact, in
Canadian funds, we may have already
seen the highest basis levels of the
year, especially if the Canadian dollar
makes a strong rebound.
CORN
The USDA finally droppcd
exports by a significant amount and
will likely make another reduction in
the March supply/demand report.
They slightly offset the export
reduction by increasing domestic
usage. But one has to question
whether livestock numbers can be
maintained throughout the balance of
the year.
In Ontario, basis levels peaked in
late January with old crop corn
reaching $1.10 over March futures
and new crop topping out at 95 cents
over December futures. Recently, the
old crop basis dropped to 90 cents
over May futures which, when
converted to U.S. funds is equal to
the earlier basis from January when
our dollar was hovering around 69