Business TheReview Wednesday, May 15,1991 — A27 |- Time for a spring safety check It’s time for a spring safety check — of your savings and investments. » The problems of Standard Trust - should prompt you to review just ~ how safe your money is. Check That's a total of $480,000 cover- age potentially available from one institution — which could be dou- bled if that company had an asso- ciated CDIC member, as most of _ that you can live with any money” — at risk. Perhaps redistribute some - funds to lower risk levels. Start by taking out your pass- “books and statements for deposits _ you have at the various financial institutions. On a sheet of paper, list: the amounts at-each place.-= =~ eee _ Banks, trust some savings and I Insurance Corporation (CDIC). CDIC has a toll-free number (1- ~ 800-461-2342) but following the Standard Trust failure, the lines are almost constantly busy. However, you can pick up a CDIC informa- tion leaflet at any member institu- tion. Highlights: The insurance limit is $60,000 per person per institution (not branch) for each class of insurable deposit (Canadian currency only). For example, you could have $60,000 coverage for your total savings and chequing accounts and term-deposits (maximum maturity: five years). Your spouse could have another $60,000 coverage. Jointly held deposits qualify for yet another $60,000. Your RRSPs invested in insura- ble instruments (term deposits but not mutual funds, for example) have $60,000 coverage. So do your spouse’s. Your RRIFs are covered up to $60,000. And so are your spouse’s. If you have an incorporated family business, its deposits would be covered for $60,000. Bie oe =f css caffe i! HPYSSIA [el] Steak, Ribs, Pizza & oy Spaghetti House [al B GREEK CUISINE FREE on minimum (el (el [Tell ial fell fa (el (el (rel lel [fell el [el] DELIVER] (re lel [| ial (el [| [el {fe {rel [el (el ial Bs 656-596 THE ONLY | CHOICE Saanich North & The Islands BOWCOTT PROVINCIAL INDEPENDENT CANDIDATE We need more thoughiful, decisive and open government. 658-1232 anies and: © “companies are members of Canada Deposit: - the major financial institutions do. Important: The $60,000 limit includes interest as well as princi- pal. So if you have a $60,000 term deposit, your interest is uninsured. Credit union deposit coverage varies from province to province. In B.C, the limit is $100,000; pick up the most recent Credit Union Deposit Insurance Corporation leaflet (revised earlier this year) from any credit union. Or phone CUDIC at the B.C. Financial Insti- tutions Commission, 660-2947. The life insurance industry recently established CompCorp, which covers life insurance com- pany deposits up to $60,000, annu- ity payments up to $2,000 a month and life insurance policies up to $200,000: For more details or a brochure, phone 1-800-268-8099. The Canadian Investor Protec- tion Fund covers your cash bal- ances at a member brokerage house up to $60,000 and your total account up to $250,000. Check what coverage non-CIPF members might have through the provincial secunties commission. Mutual funds should be set up separately so unless fraud is involved, that money is as safe or Tisky as the investments in the fund. That brings us to a review of the non-insured instruments. Canada Savings Bonds, Trea- sury bills and Government of Can- ada bonds are as safe as the federal government's guarantee. If Ottawa reneges on its obliga- tions, the economy and most other investments will be in trouble, too. The risk level of other securities varies widely. Bonds or preferred shares issued by major companies have far lower risk than ‘shares in Consolidated Moose Pasture. Does the risk level of the various secunties you own suit your per- sonal and financial situation at this Stage of your life? Real estate forms a major part of many investment portfolios. Land in a resort area is riskier than revenue property in an established urban area. The higher your mort- gage (in relation to total value), the higher your risk. With both the stock market and Teal estate, the longer you can hang on to your investment the less the risk. The long-term approach ena- bles you to ride out price drops and wait until the market recovers. What about tax shelters? Risk level tends to be high: the tax breaks are usually provided to help offset the risk. But there’s no point saving some tax if you lose all the investment. Investing money in a business, whether your own or somebody else’s, tends to be at the higher end of the risk scale. Gold, other precious metals, commodities, collectibles — all require specialized investment knowledge to help reduce the oth- erwise fairly high risk. Now, what does your risk pic- ture look like? Your savings and investment “pyramid’’ should have a solid base of insured, guaranteed instruments (plus your own home and adequate insur- ance) with the riskier instruments on top. The less time or other income you have to help you recover from investment losses, the broader the base should be. Mike Grenby is a Vancouver- based columnist and independent personal financial adviser; he will answer your questions as space allows in his column — write to him c/o The Review, PO. Box 2070, Sidney, B.C. V8L 3C5. ‘Land in a resort area is riskier than revenue property in an established urban area’ CAPITAL CONSULTANTS LTD. Personal = Corporate INVESTMENT ADVISORS - FINANCIAL “/BLANNING) 7 Complete : Investors Service Lee Ann Weigold Financial Planning 384-8864 or 655-4105 Res. 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