Times-Advocate, 1999-02-03, Page 54
Exeter`' ► to
Wednesday, February 3, 1999
Defining
what the
terms
mean
Assets: Things you own
which have value in
financial terms.
Beneficiary: A person
who is intended to receive
the value/benefits of a
savings/investment plan
or some other asset.
Bonds: Offered by gov-
ernments and corpora-
tions, bonds are invest-
ments in which you lend a
sum of money to the
issuer for a set amount of
time at a fixed rate of
interest. You receive a
certificate from the issuer
of the bond.
Canada Education
Savings Grants: Program
recently introduced by the
federal government
whereby it will invest, in
the form of grants, along-
side parents who save for
their children's education
through RESPs. The gov-
ernment will top up con-
tributions made to an
RESP by 20 percent up to
a yearly maximum of
$400 per beneficiary.
Capital Gain or Loss:
The difference between
the price you paid for an
investment and the price
at which you sell (in other
words, the profit or loss
you make). Investments
that earn capital gains or
losses include equity and
growth funds.
Compounding: Refers to
earning income on your
income. For example, on
fixed income investments
that pay interest over
time at periodic intervals,
compounding means
making Interest on your
initial investment and also
on the interest as it builds
up (i.e., earning interest
on your interest).
Contribution: An
amount of money you put
into a
savings/invest-
ment plan.
Dividends:
Company
earnings that
may be paid
out to share-
holders accord-
ing to the number o
shares or stocks they
hold. Dividends can be
earned on stocks and cer-
tain mutual funds.
Guaranteed Investment
Certificate: An investment
in which you deposit
money over a fixed period
of time and are paid a set
rate of interest.
Income -Splitting: A
financial strategy for tax
purposes. Splitting
income refers to the
process of shifting income
from the hands of one
family member to another
who is in a lower tax
bracket and will therefore
pay tax at a lower rate.
This helps reduce your
family's overall tax bur-
den.
Informal Trust: Also
known as in -trust account
or "bare" trust, this is an
investment account regis-
tered in an adult's name
in trust for a child. The
account is used to
save/invest funds for of
child, and the funds must
be reserved for and used
by the beneficiary child.
Interest: From a saver's
standpoint, interest is a
type of income that you
earn from an investment.
You place an amount of
money (called the princi-
pal) into an interest-bear-
ing investment and in
return, the institution,
government or corpora-
tion offering the invest-'
ment pays you a specified
percentage of interest in
exchange for the use of
your money. Interest
savings plans that grow
tax-free until a child is
ready to pursue a post,
secondary education, at
which time the money is
withdrawn to help finance
the costs.
Registered
Retirement
Savings Plan: A
savings strategy
.for your retire-
ment that
allows you to
save on a tax-
deferred basis.
Return: Any
i>ecrease in value or in
income you earn on an
investment,
Stocks: Traded 1 a
stock exchangeth re
shares in a t. lny•
Essentially, you pat chase
shares in exchange for
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rew wET�wti�■$NT
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•e is
aMutual
183 Main Street South - Mutual Group
Exeter ON NOM 1S1 prij
(519) 235-1344
Licensed with Mutual Life of Canada, Iead'company of The Mutual Group.
owning a part of that
company.
Tax Shelter: A tax shel-
ter is a savings/invest-
ment plan which offers
significant tax savings.
Term Deposit: An
investmentproduct in
which you deposit a fixed
sum of money for a set
period of time and are
paid interest.
CANADIAN BANKERS Assoc.
Unused
Contribution
On RRSPs
A lot of people who
reach 65 believe their
RRSP contribution days
are over because they've
reached retirement age.
Not true. If you have
unused contribution room
accumulated during your
working days, you can
still use this room for a
contribution to a spousal
RRSP-an important point
in any income -splitting
strategy you may adopt
later.
You can claim the con-
tribution as a tax deduc-
tion against any pension,
interest inconie, capital
gains, dividends or, in
fact, anyform of income
on which you pay taxes.
Your income does not
need to be tied to the
earned income rule that
normally applies to RRSP
contributions.
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Invest in Your Community With Your
CREDIT UNION RRSP
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Your RRSP deposits are used to assist our borrowers who are your
friends and neighbors in the community
t
RRSP Loans at
Prime
RRIF's Also
available
Each RRSP and RRIF contract is insured individually for up to
$60,000.00. Other R.S.P. options available, inquire at branch
Index Linked Term Deposits
They offer the appeal of an
above-average rate of return
from participation in stock
market appreciation, and
also have the safety of a
guaranteed return of
principal like a G.I.C.
No Fees RRSP Eligible
CLINTON COMMUNITY CREDIT UNION LTD.
118 Main Street 48 Ontario Street
Exeter, 235-0640 Clinton 482-3466
clintoncu@odyssey.on.ca exetercu@odyssey.on.ca
165 Main St. W.
Dashwood 237-3777
Tues. 10 a.m.-3 p.m. Fri. 2-7 p.m.
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LET US HELP YOU RETIRE
IN COMFORT AND STYLE
—income is earned on
banking accounts, GICs,
bonds, term deposits and
money market funds.
Investments: Something
you put your money into
in order to make money.
Investment Income:
Income earned on invest-
ments you make.
Investment income
includes interest, divi-
dends and capital' gains.
Mutual Fund: An invest-
ment product in which
your money is pooled with
the money of many other
investors. A professional
manager uses the pooled
money to buy a . portfolio
of investments or securi-
ties and monitors each of
the investments on an
ongoing basis. There are
many varieties of mutual
funds, each with specific
objectives. By investing in
a mutual fund, you pur-
chase units of that fund.
The value of your units
can go up or down,
depending on the type
and performance of the
mutual fund.
Portfolio: A collection of
investments.
'Registered Education
Savings Plan: Education
Tax
Refund
Cheques
Revenue Canada will pay from
$2,900 to $4,000 as a refund to the
RRSP investment of $5,000.
Sign up for your cheque today.
For information call 519-236-4784
RRSP loans starting at prime.
Catch up loans available.
Ralph .Geiger
519-236-4784
Financial Licence sponsored by Ten Star Financial
rDonThompson Lawrence Beane
I Financial Consultant Manager
Check out our RRSP and RRIF
plans designed to meet your needs.
R.R.S.P. Deadline Marche 1/99
t -
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YOUR INVESTMENT SHOPPERS
303 Main Street S., Exeter (519) 235-3368
5 Rattenbury St. Clinton (519) 482-9924
58 Ontario St. Grand Bend (519) 238-5014
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(here's an example, just to get you thinking)
1. BORROW $15,000
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2. GET BACK $6,000 ON YOUR TAX RETURN AND PAY DOWN YOUR
LOAN.
• (Assumes 40% tax bracket. Yours might be different)
3. Pay Back $170/Month to repay.)
(Seem possible? If need be, you can take up to 15 years
4. Watch your RRSP grow to $20,996 In 5 years and 4 months,
when your loan Is paid out below.
5. In 25 years, you'll have $72,415. See assumptions
This year it's your turn.
The Scotia RRSP Catch-up
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way to take advantage of
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Scotiabank www.scotiabank.ca
What's right for you? 280 Main St.S. Exeter 235-1142
Assumptions: 1) - loan is amortized over 10 years and is subject to applicable credit criteria. Loan rate over
the life of the loan is calculated based on 6.5%, Scotiabank's 5 -year average Prime rate.
• Rate is fixed for each term of the loan. 2) - Tax refund is used to pay down principal at the fourth month.
3) RRSP investments eam an average annual compound retum of 6.5% in a diversified portfolio.
▪ ®Registered trade -marks of The Bank of Nova Scotia TMTrade--m���� Bank of No��ti,�ay_y_y,�y�,��
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