Business David Chilton, Carol Young and Nina Schaubs (among others) are a little annoyed at me. And it’s all because I quoted Michael Ryan, who suggested there’s not much point saving until you are in your 40s. “1 have been a fan of yours for years,” writes Young. “But I am puzzled by two recent columns. First, you quote Michael Ryan urging people under 45 not to save. Then you quote other advisers urging us to save as early as possible — a direct contradic- tion.” Chilton, author of The Wealthy Barber, a chatty guide to managing money which has sold more than 30,000 copies, said: “Along with hundreds of thou- sands of other Canadians, I con- tinue to enjoy your weekly col- umn, which makes financial plan- ning not only understandable — a rare feat — but also entertaining. ~ However, I must take exception to the views of Michael Ryan presented in a recent column. I think his advice to under-45s to spend their money now and worry about financial planning later is unsound.” ‘| sure hope my aaughier didn’t read that column, because when she’s 45, she'll be starting to put two children through post- secondary education’ -Reader Carol Young Added Young: “I sure hope my daughter didn’t read that column, because when she’s 45, she’ll be Starting to put two children through post-secondary educa- tion.” And from Schaubs: “It is mis- leading advice like this that gets young people off on the wrong foot when their finances are con- cemed.” Ryan, vice-president of Leith Wheeler Management Ltd., invest- ment counselors, said under-45s But will it help? The provincial government announced recently that it plans to combat the effects of Cominco’s Sullivan mine closure in Kimber- ley by giving the town folks an Enterprise Centre In A Box and other advice-oriented help. The Enterprise Centre In A Box is a comprehensive, computer- based resource library that will be administered by the Kimberley Chamber of Commerce. In addi- tion, the regional and economic development ministry has hired local experts to provide business counselling. Regional and Economic devel- opment Minister Stan Hagen noted that all these wonderful things are happening “only three weeks after ihe premier’s visit.” Others were equally happy that so much was being done to offset the layoff of 700 Cominco employees. Columbia River MLA Duane Crandall said he is pleased that the community is already benefitting from the results of the recently-appointed task force. rarely have enough experience or spare money to make effective decisions about the future of their lives and finances. “By the time you are 45, you usually have a clearer picture, Ryan said. “You are more settled and can face the reality of what lies ahead.” Young challenged me to “‘tell us what you really think” instead of just quoting others. Personally, I feel people should get into the habit of saving as early as possible, although probably for short-term goals like buying a home, paying off debts, taking a major trip, perhaps even helping with children’s education and building funds for emergencies, opportunities and paying large bills. But I agree with Ryan that most people cannot — or will not — engage in serious financial plan- ning for retirement until they are in their 40s. Sure, putting $1,000 a year from age 18 to 25 (total invested, $7,000) into an RRSP earning 10 per cent will grow to the same amount as putting $1,000 a year into the same plan from age 25 to 65 (total invested, $40,000). But between age 18 and 25 — even 35 or 45 — retirement savings is rarely a high priority. Ryan said many people experi- ence major one-shot financial events (like imheritances) in their later lives. 9769 Fifth 1215 sq. ft. High visibility retail located next to Monks, Old Country Rentals between Beacon and Bevan on Fifth. Asking $13.5 per ft. _ =a ~ But that’s only the positive half of the picture,” said Chilton. “Other one-shot financial events include being laid off, carly retire- ment, divorce and taking on a parent as a dependent. So it’s the person who doesn’t begin to save carly who has to worry about an uncertain future, not the person who does save.” Chilton said people who start saving while they are young are often happier and more relaxed than their “Ill worry about it later” friends. “True, non-savers will have a bit more money to spend than sav- ers, he said. “But if you know your financial future looks bright, you will have a fecling of security which more than compensates for the small amount of restraint required monthly.” Another problem with starting to save later in life concerns inv- estment risk, said Chilton. If you have only a relatively Short time to accumulate funds before you need the moncy to Support your retirement, you might tend to favor guaranteed invest- ments (Savings certificates, Can- ada Savings Bonds, Treasury bills) with their relatively lower rates of return. “The traditionally better returns offered by instruments like mutual funds, stocks and real estate are not guaranteed,’ Chilton said. “These are better suited to people TmeReview = Wednesday March 21,1990 — A12 BT My readers write — with pens dipped in venom who don’t need to call on their invested funds for several years.” Mike Grenby is a Vancouver- based columnist and independent financial adviser; he will answer your questions as space allows in his column. Write to him clo The Review, Box 2070, Sidney, V8L 3S5 STRAIGHT TALK | ABOUT YOUR MONEY. 12% « Getting the most for your investment dollar is as easy as talking to the right people. 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