Business Preparing for financia Financial independence can prove expensive. But there are ways to lower that cost. “Financial independence sug- gests that you have enough money so you no longer have to work for a living,” says John Beaton in the first issue of Beaton on Financial Planning. “Being financially inde- pendent means you don’t actually have to quit work, but simply be able to if you choose.” Federated Press, which produces a series of publications on execu- live compensation, taxation and retirement (for details, phone toll- free 1-800-363-0722), says Beaton’s quarterly newsletter is “devoted to personal financial planning for executives,” but much of the information relates to anybody who wants the most from his or her money. Financial independence can be expensive “and the cost uncer- tain,’ warmed Beaton, who is an actuary and senior vice-president of The Alexander Consulting Group. He gave an example. Let’s say a 50-year-old man wants to retire, financially inde- pendent, and have an after-tax, inflation-indexed income of $50,000 a year: He can earn 10 per cent on his investments and he pays 40 per cent tax. If inflation runs at six per cent a year, he will need almost $1.5 million in non-RRSP funds to provide $50,000 a year of constant purchasing power for the rest of his life. “Tf he can earn only eight per cent interest and inflation runs at seven per cent (and his tax rate stays the same), then he'll need capital of $2.2 million,” Beaton said. If you dream of financial inde- pendence, you must be prepared to spend less today to have more income and independence tomor- TOW. “But make sure the tradeoff is worthwhile,” said Beaton. Enjoy- ing life less today might be a high price to pay if financial independ- ence turns Out not to be all you expected. Perhaps your health won’t allow you tO enjoy your money as much then as you could now — or perhaps you won’t even be around then. Spending time with your children is a one-time-only oppor- tunity; will you enjoy being with your grandchildren as much — assuming there are grandchildren? Perhaps working for money turms you on and is “your main - Information Line 1-800- 663-4242 Canadian Gancer-Society recsencET source of challenge and fulfill- ment. Financial independence takes the edge off that motiva- tion,” said Beaton. “Tf you achieve financial inde- pendence, you will need to find Financial independence gives you the opportunity to make choices. But you should prepare for this opportunity or it can prove a burden. Beaton posed several questions you should answer now: Should you continue work after you achieve financial independ- ence? If you stop, what will you do? If you continue, should your standard of living change? If so, how? Will that affect your rela- tionships with existing friends, relatives and acquaintances? ‘Choices like these are what can make large lottery wins mixed blessings for the winners’ “Choices like these are what can make large lottery wins mixed blessings for the winners,” said Beaton. How can you achieve financial independence sooner and more easily? Beaton suggests several approaches: ¢ Control further increases in your standard of living: the more you earn — and spend — before you Tetire, the higher a standard of Are you managing your money or | just managing to get by? Call me today to find out how Investors can help you start building your financial future. DIANE DOBBIN, B. Ed. _ 656-1004 Ei} Investors : froup Building fmessines 1940, 734 Broughton St. CAPITAL CONSULTANTS LTD. Personal - Corporate INVESTMENT ADVISORS FINANCIAL PLANNING ee pay Se _ Complete | Investors Service Lee Ann Weigold Financial Planning 334-8844 ae or 655-4105 Res. | independence living you are likely to want after you retire. And, said Beaton, that will be expensive: “For every additional $5,000 a year of income the man in Our earlier example wants, he will need another $156,000 or $220,000 in capital.” e Reduce your standard of liv- ing sO you won’t need as much income to become financially independent. “This can be difficult — but it is possible if your lifestyle is now driven by the value systems of your peers rather than your own,” said Beaton. « Modify your objective. Earn income from part-time work to supplement the income from your savings. If you could earn $25,000 after- tax with cost-of-living increases to maintain your purchasing power, you'd need to have only half the savings amounts mentioned earlier and could retire sooner. « Use tax planning, investment vehicles and pension plans to the best advantage. Saving, inside an RRSP or pen- sion plan, for example, can usually build up funds for financial inde- pendence more quickly than. inv- esting outside those tax shelters. “Still,” said Beaton, “control- ling your income needs can be as powerful a way of accelerating financial independence as control- ling taxes, investments and pen- sions.” Mike Grenby is a Vancouver- based columnist and independent financial adviser who works with individuals; he will answer your questions as space allows in his column — write to him clo The Review, P.O. Box 2070, Sidney, B.C. V8L 3C5. Superior mileage, smooth ride, excellent all- weather handling. The Advantage T/A® 1/2 PRICE | SALE Buy One Tire at Regular Price, Receive the Second Tire at Half Price. durability. sidewalls. TheReview Wednesday, June 12,1991 — A28 Bylaw to curb home heighis Artificially built-up lots will be eliminated in North Saanich under a bylaw given first and second reading by council May 21. Under the bylaw, the height of homes will be restricted based on the natural grade of the property. Director of services Jack Wil- loughby, who proposed the bylaw to council, said the change will end the present practice of artifi- cially filling a piece of property to improve a view lot. Building up lots can interfere with the views on existing lots, Willoughby said. The height restrictions on homes also prevent homes which tise in multiple stories at the rear when constructed on a slope, Wil- loughby said. Such homes can be difficult to protect in case of fire, he added. He said there were no homes now under construction prompting the bylaw, but said the fire department had expressed concern about exceptionally large homes. The bylaw goes to public hear- ing at 7 p.m. June 17. “Catch the Spirit of Change.” Join Clive TANNER and be- come a member of B.G.’s best choice - the New Liberal Party of British Columbia. For information write to: 210-2436 Beacon Ave. Sidney V8L 1X6 or phone 656-1687 STRAIGHT TALK | - ABOUT YOUR MONEY. Wan |Feb |Ma: | GURNEY SMITH & ASSOCIATES LTD. FINANCIAL CONSULTANTS ¢ LIFE UNDERWRITERS SUITE 6 - 9843 2nd St., SIDNEY (In Marina Court) 656-2411 1205 € Verdier Ave, (Brentwood Bay Shopping Centre) 652-1482 @Computer-optimized all- weather tread for excellent traction on all surfaces. @Sieel belts and polyester- body plies for rugged @Attractive styling with weather-resistant white sy