By Tony Wanless
The Province
May 12, 2002

About this time of year, most people drag the family car down to the garage for its annual spring tune-up. Oddly, most of the same people told to the same for their income.

I'm not saying you have to drag yourself and all your papers down to some financial planner garage, although that wouldn't be a bad idea. But if you're concerned enough to ensure your car is running optimally, why not ensure your income-earning engine is doing the same?

Generally they are three areas involved:

Tune-up your tax situation

Now that you've just finished doing your taxes, or had someone do them for you, go through the whole shebang and look for tax saving opportunities. If you can't do it yourself, pay someone for an analysis.

Refresh your retirement goals and what you'll need to live on. You may find its less, or more, than you thought.

Vancouver financial adviser Adrian Mastracci, of KCM Wealth Management, suggests you look over your investments from a tax point of view. Perhaps you're investing inappropriately for your needs.

If you're throwing all your money outside an RRSP into GIC's or bonds, you're paying more tax than you should. Try tax-favoured capital gains instead. If the situation's the reverse, perhaps you should reverse your strategy as well.

Get your bookkeeping in order. Start collecting those receipts you'll need now. If you have a business, you'll need them. If you're claiming medical expenses, etc, you'll need them as well.

Now's also the time to plan tax-favoured charitable donations, political contributions, childcare expenses, alimony, maintenance, professional dues and moving expenses.

Start your RRSP contributions right away. That way you won't have to come up with a lump next winter.

Tune-up your investment portfolio

Like Elvis, the gyrating stock market has left the building. Get used to get. Stop waiting for those absurdly overpriced, then absurdly falling, stocks to go back up. Dump them and cut your losses.

Nortel is not going to reach $100 again in my lifetime or yours. Okay it might, but we'll be so old we won't care.

Recognize that the stock markets are going to languish for some time and put more (some would say most) of your money into boring income vehicles like bonds or GIC's. They may not pay much but five percent is better than zero.

Tune-up your career

How's your job going? Stagnating? Coasting? Sinking? This is important because your job is the generator of all the income that's involved in the other areas. Generally, the economic system is based on the belief that you will gain increasing income every year.

Sadly, these days that's not necessary the case any more. So you're going to have to make it the case. Open a side business, or get some extra training that will make you more desirable -- to your current boss, or another one.

It may mean more money for you. That's the point, right?
 

NOTE: The information provided above is intended for general informational purposes only. It does not constitute advice for anyone's specific situation. Everyone should always first consult directly with their advisors to determine the appropriateness of any information contained above before taking any action. KCM Wealth Management Inc. assumes no responsibility for any loss or damage arising from the use of, or reliance upon the above information.