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Money Management Steve Dafoe is a finan- cial planner with Mutual Life and Mutual .Investco of Canada. He is qualified by degrees in finance, eco- nomics and political science. Dafoe was appointed to service the Terrace Bay- Schreiber communities. He believes the information provided in these articles is an integral part of money management and he hopes that it will provide what he believes is an important ser- vice to people in our area. If you have any questions or would like to write con- cerning these articles, please contact the News at 825-3747 or write to the News, P.O. Box 579, Terrace Bay, POT 2WO. These articles will appear on a regular basis. Cash Flow Analysis This is the third in a three-part series on money management. In part one we discussed the advantages of preparing a net worth statement. In part two we discussed the preparation of a cash flow state- ment and described some of the steps in preparing the statement. - Now let's offer some comments on the value of a cash flow analysis. ; If your income and cash on hand at the end of the month exceed your expenditures, you have a positive cash flow; other- wise, your cash flow is negative. A positive cash flow means you have funs available for sav- ings or other uses while a negative cash flow means you are depleting your capital or increasing your debt. This information is available at a glance on the cash flow statement. Consider the case of James and Donna, a hypothetical cou- ple. Assume they have a mortgage of $100,000 and deferred annuities and bonds amounting to $30,000. Their cash flow statement may appear as follows. References to income tax in their statement are based on rates in effect at the time of writing and have en rounded. as Ow Statement Income Salary $67,000 Interest 3,000 Less: Income Tax 23.100 Net Disposable inccme $46,900 Expenditures Living Expenses $32,703 Debt Retirement 11,550 Tax Deferred Savings (i.e. RRSP or Pension Plan) 2,000 $46,253 Cash Flow $ 647 At first glance it would appear they are doing a good job of organizing their financial affairs and the positive cash flow con- firms the view. Can the cash flow be improved? At least three ~ basic options are available. R mo: in ff loans. a. Pay monthly mortgage payments based on the reduced mortgage. b. Continue monthly mortgage payments based on the former mortgage. c. Increase monthly mortgage payments by the amount for- merly paid on the bank loan. it n nt inv n Let's consider one of the options. They could use the existing investments to pay down the mortgage by $30,000 while paying monthly payments based on the reduced amount. The following chart indicates the present and revised cash flow statement. nnuiti n Income Present Revised Salary $67,000 $67,000 Interest 3.000 -- $70,000 $67,000 Less: Income tax 23,100 22,100 Net Disposable Income. $46,900 $44,900 Expenditures Living Expenses 32,703 32,703 Debt Retirement 11,550 8,085 Tax Deferred Savings 2,000 _ 2.000 Total Expenditures $46,253 $42,788 Cash Flow $ 647 $ 2,112 The realignment of investments and debt has resulted in an ---- in cash flow from $647 to $2,112; an increase of 1,465. The example has been structured to indicate the result of debt restructuring. Even if your income is not as high as our example, proper planning can still have good results. There are, however, other factors such as tax planning and the allocation of emergency funds which should be considered. ee ee ee By Ken Lusk The News The Lions Club has been reju- venated and there now exists the new Terrace Bay-Schreiber Lions Club. Members met on Sept. 17 at the Boy Scout Hall to hear guest speaker Walter Mianowski, past- district governor of the Lions. Mianowski is also the mayor of Grand Marais, Minnesota. The members are: Gary Callaghan, president, Tom Dickson, treasurer, Colin Crown, secretary, Mike Gould, Ist vice- president, Lucien Bilodeau, Bill Fell, tail twister, Gordon Darling, Bits and Bites By Helene Ballard Hello Everybody! Sorry I missed last week's.edi- tion but I was down for the count with an attack of "gout". I thought that was just for rich old men; well I'm not a man and I'm not rich but somehow I got it any- way. This month seems to be a bit more active; on the 9th we had our "Oktoberfest" party in the rec room, and needless to say, we all had a good time. Our "Ladies" Auxiliary to Birchwood" were the. hostesses for this event and as always, they were so very kind. These ladies give of their time and effort to make life more enjoyable for all the residents and it is with a deep sense of gratitude that we say thank-you. Looks like our weather is turn- ing colder, but I guess it's that time of the year; no use to com- plain. It's also the time to be careful for fires.as we turn on the heat; it's a good idea to check and clean the furnace to make sure it is safe for another winter. I would like to say welcome to Dr. Marc Marion who will be practising at the McCausland Hospital clinic. We wish him well and hope he will like our town of Terrace Bay. We also welcomed a new resi- dent to Birchwood; Madame Gabrielle Gauthier, and we hope she will enjoy staying here. I will have more news next week,.so I'll close with this "wee bit". "At the peak of the cold and virus season, the busy doctor tacked this notice to the door of - his inner office- "To save: time please back into the office'. I hope this brings a smile to our dear doctors. -- Until next time, "Cheerio". October is UNICEF month Terrace Bay-Schreiber News, Wednesday, October 14, 1987, page 3 Lions club formed Bob Jacko, Jack Chapman, 2nd vice-president, Roland Gander, lion tamer, Joe Commisso and Clem Fewer. Bilodeau, Darling, Jacko, Commisso and Fewer make up the board of directors. Gould, Chapman and Gander make up the committee that is looking after the plans for the Olympic Torch Relay, in conjunc- tion wth the Township of Terrace Bay. People are urged to contact any of the members if interested in joining the club. The News learned that the club became defunct about two years ago. Joe Commisso is a past offi- cer of the original Lions Club back in the early '80s. The official installation of members will be on Saturday, October 17, and meetings are every second and fourth Tuesday. oad ff TERRACE BAY OFFICE Simcoe Plaza 825-9379 or 9395 Monday to Friday 10:00 a.m. to 5:30 p.m. LAW OFFICES OF i EDWIN W. (TED) PAGET BARRISTER & SOLICITOR ' located at SCHREIBER OFFICE 302 Scotia, 2nd Floor 824-3122 Every Tuesday 10:00 to 4:30 p.m. = = Major Appliance Repairs Servicing done in your own home to ranges, washers, dryers, dishwashers, fridges, electric hot water tanks and electric heating units. Parts on hand for most makes and mocels. Bill Campbell Electric a 824-2743 or 824-2574 * Servicing Jackfish, Terrace Bay, Schreiber, Rossport and Pays Plat. GRANNY'S FOODS Terrace Bay Unblanced Almonds whole 1 000. 1 a 69 Hersheyetts 1009-9 1 29 Unbleached Flour Kilo -99¢ Pretzels 100 g. .63¢ Long Grain Rice Cammomile "S Rosehip & Tea (uk) Baking <Hibisas Tea 1009. 3-09 Punenes sede $2.1 9 Tomato Cream of Vegetable eeroum Soup 63 oup : Dried 100g. 59¢ Fruit 825-3858 Hazel nuts (filberts) thes $1 49 ugar & Salt Free Candies 100 $1.68 Corn Flour Kilo $1 49 > Spanish Peanuts} Salted 100 g. .59¢ Sale Runs: Wednesday October 14, 1987 to Saturday October 17, 1987 WHILE QUANTITIES LAST STORE HOURS 9 a.m. - 5:30 p.m. - Monday to Saturday Thursday 'til 8 p.m.