Tax-deferred growth

WithanRESP,youcansetasideupto$50,000inadedicatedplanwhereyourinvestmentswillgrowonatax-deferredbasis(althoughtheyaren’ttax-deductiblelikeRSPcontributions).

Whenplanearningsarewithdrawntopayforyourchild’spost-secondaryeducation,yourchild(ratherthanyou)reportstheincomefortaxpurposes.Inmostcases,littleornotaxisowed.Inaddition,yourcontributionsmayqualifyforanumberofgovernmentgrants,suchasthefollowing:

• The Canada Education Savings Grant (CESG).UndertheCESGprogram,thefederalgovernmentmatches20%ofthefirst$2,500contributedtotheRESPannually.That’spotentiallyanextra$500fromthefederalgovernmenteachyear.ThemaximumlifetimeCESGis$7,200perbeneficiary.Eligiblelower-incomeearnersmayqualifyforanadditional20%creditonthefirst$500contributedannually,givingthemanextra$100.

Give the gift of education by starting an RESP today

New name, even more great information!You’ll notice something different about this issue of your newsletter – we’ve changed the name from Money Finder to Scotiabank Investment Insights. The new name more accurately reflects the type of valuable information you can expect to receive with every issue.

Not only will we continue to provide investment information and strategies to help you be a smarter investor, but we’ll show you effective ways to make your money work harder for you.

continue page 2…

Scotiabank

Page 2: What the federal budget changes mean to you5 easy steps to effective investing

Page 3: Your year-end planning checklist

Page 4: Interest rates on the rise – what should you do?

Dedicated to helping you get ahead financially. Vol. 1 • Issue 1Fall 2007

Intoday’sknowledge-basedeconomy,ahighereducationcan

potentiallyleadtomorecareeropportunitiesandgreaterjob

satisfaction.AccordingtoStatisticsCanada,post-secondary

graduatesarelesslikelytobeunemployed1andmorelikelyto

havehigherlifetimeearnings.

Butwiththehighcostsofcollegeoruniversity,howcanyouensure

thatyourchildrenwillhavethefinancialbackingtheyneedtopursuetheirchosencareerpath?Oneof

thebestplacestostartiswithaRegisteredEducationSavingsPlan(RESP).

• Canada Learning Bond.IfyourchildwasbornafterDecember31,2003,andyoureceivetheNationalChildBenefitSupplement(availabletofamilieswhosenetincomeislessthan$37,178in2007),youmaybeeligibleforaCanadaLearningBond(CLB).Ifeligible,aninitial$500isdepositedintoyourchild’sRESP;plusyoucangetanextra$100peryearforupto15years,aslongasyoucontinuetoreceivetheNationalChildBenefitSupplement.

• Alberta Centennial Education Savings Grant (ACES).ThegovernmentofAlbertaprovidesaninitial$500RESPgranttochildrenbornafterJanuary1,2005,andwhohaveaparentlivinginAlberta.Eligiblechildrenreceiveanadditionalgrantof$100whentheyturn8,11and14—assumingthat$100isalreadyinvestedintheRESPwithinoneyearpriortothedateofgrantapplication.

Flexible alternatives

ScotiabankofferstwokindsofRESPs:familyplansandindividualplans.Withafamilyplan,theRESPcanhavemorethanonebeneficiary,providedtheyarerelatedbybloodoradoptiontothepersoncontributingtotheplan.

IfyouchooseanindividualRESP,ontheotherhand,thebeneficiarydoesnothavetoberelatedtoyou.However,therecanbeonlyonebeneficiary.

Whathappensifthechildyouopenedtheplanfordecidesnottopursuepost-secondaryeducation?InafamilyRESP,thatchild’sentitlementcanbeusedbytheotherbeneficiaries.InanindividualRESP,youmaybeabletonameanalternatebeneficiary,dependingonthespecificsofyourplan.

BecausecontributionsmadetoanRESParemadewithfundsthathavealreadybeentaxed,theycanbereturnedtothesubscriberatanytimewithnotaxconsequences(subjecttothetermsoftheRESPcontract).

Reaching your goals

Ifyou’dliketoopenanRESPforyourchildorgrandchild,talktoyourScotiaadvisor,whocanshowyouhowthepoweroftax-deferredcompoundgrowthandgovernmentgrantscanhelpyoureachthisimportantlifegoal.

Inthemeantime,tolearnmoreaboutRESPs,theCESG,andotherprograms,checkoutthefollowingwebsites:

• HumanResourcesandSocialDevelopmentCanada(www.hrsdc.gc.ca).

• TheCanadaRevenueAgency(www.cra-arc.gc.ca/tax/individuals/topics/resp/menu-e.html).

• StudentAwards.com(www.studentawards.com).

• GrantCanada(www.grantcanada.com).

What the federal budget changes mean to you.Here’s a quick summary of key proposals from the March 19th federal budget that have now passed into law:

Pension-income splitting. Couples receiving qualifying pension income can now elect to transfer up to 50% of it to their spouse.

RIF conversion deadline extended. You now have until the end of the year you turn 71 to convert your RSP into a RIF or other retirement income option.

New Child Tax Credit. Parents can now claim a non-refundable Child Tax Credit worth $310 for each child under the age of 18. This credit is available to all parents, regardless of income level.

Credits increased. The Age Credit has risen to $5,066 from $4,066 and the Spousal and Dependant Credits have increased to match the Basic Personal Amount ($8,929 in 2007).

Give the gift of education by starting an RESP today

1. Statistics Canada Back-to-school factbook, 2006

5 easy steps to effective investingJohnisafairlytypicalthirty-somethingCanadian.Hehasagoodjob,ishappilymarried,andislooking

forwardtobuyingahomeandstartingafamilyinthenextfewyears.

Johnwantstomakesmartinvestmentdecisionssoheandhisfamilycanhavethebestpossiblefuture.Buthefeelsoverwhelmedbythenumberofdifferentkindsofinvestmentstochoosefrom.Andtheadvicehereadsfromthe“experts”inthebusinesspagesofthenewspaperseemstobealloverthemap,leavingJohnmoreconfusedthanever.

Fortunately,John’sScotiaadvisor,Stephanie,understandswhathe’sgoingthrough.Sheexplainsthatunderneathallthefancywindowdressing,successfulinvestingisgroundedinfivebasicfundamentals.

1. Identify what you have

John’scareerisreallyjustbeginningtogetgoing,sohehasn’taccumulatedalotofassets.ButasStephaniepointsout,hedoeshaveaRetirementSavingsPlan(RSP)worthabout$30,000anda$5,000non-registeredaccountforemergencies.Andthat’sasolidfoundationtobuildon.

2. Know where you want to go and when you want to get there

Johnalreadyhassomeideaofwhathisgoalsare,butStephaniehelpshimbemorespecificandassigntimeframes.Hisfirstpriorityrightnowistobuyastarterhomewithinthenextthreeyears.Longer-term,heandhiswifewanttobeabletoenjoyafinanciallysecureretirement.

3. Know yourself

Johnlikestothinkofhimselfasarisk-taker.ButwhenStephanieaskshimhowhe’dfeelifhis$30,000RSPfellsharplyovernight,hereconsiders.Whilehe’sokaywithsomevolatility,healsoneedssomesecurity.

4. Start early

StephaniepointsouttoJohnthathe’salreadypractisingthisfundamental.HestartedhisRSPwhenhegothisfirstfull-timejobaftergraduatingfromuniversity.StartingearlyhasgivenJohntwoimportantadvantages:he’sbenefitingfromcompoundgrowth,andhehas

adequatetimetorideoutanyshort-termroughpatchesinthemarkets.

5. Invest regularly and stay invested

Here,Johnhasn’tbeenquitesodiligent.HisonlyinvestmentshavebeenmadethroughhisRSP,andhiscontributionshavebeensporadicovertheyears.Andheadmitsthatoverthepastyear,he’smovedinandoutofinvestments–ratherunsuccessfully–inanefforttomakemarketgains.

BythetimeheleavesStephanie’soffice,Johnhasawrittenplanthatincorporatesamixofcash,fixedincome,andequitymutualfundsthatareappropriategivenhisgoals,timehorizon,andcomfortlevelwithrisk.He’salsocommittedtoinvest10%ofhistake-homepayeverymonththroughtheScotiabankPay Yourself Firstplan.

How confident are you that you can reach your financial goals? To start making your money work harder for you, come into any Scotiabank branch for a Second Opinion.

Your year-end planning checklistCharitable contributions. In order to claim a Charitable Tax Credit for 2007, you need to make your donation by December 31.

RESP contributions. In order to qualify for the Canada Education Savings Grant (CESG) for 2007, Registered Education Savings Plan (RESP) contributions must be made before the end of the year.

Tax-deductible business expenses. If you’re self-employed or run your own business, you may be able to deduct a number of business-related expenses from your taxable income for the year. To claim the expense in 2007, be sure to pay by December 31.

Scotia Mutual Funds, including Scotia Selected Funds are offered by Scotia Securities Inc., a corporate entity separate from, although wholly-owned by The Bank of Nova Scotia. Commissions, trailing commissions, management fees and expenses may be associated with mutual fund investments. Please read the prospectus before investing. Copies are available through all branches of The Bank of Nova Scotia, Scotiabank and Trust, ScotiaMcLeod, and authorized independent dealers. Mutual funds are not guaranteed or insured, their values change frequently and past performance may not be repeated.

The information and opinions contained in this newsletter are intended to provide only a general commentary on areas which may be of interest or significance to readers. This newsletter is not intended to provide specific legal or financial advice or recommendations. Readers should consult with their legal, personal financial or tax advisor before acting on any information or opinions contained in this newsletter.

9040315 (10/07)

The Scotiabank Group refers to The Bank of Nova Scotia, The Bank of Nova Scotia Trust Company and Scotia Securities Inc. ™ Trademarks used under the authorization and control of The Bank of Nova Scotia. ® Registered trademarks of The Bank of Nova Scotia. Used under license by Scotia Securities Inc. and The Bank of Nova Scotia.ScotiaMcLeod is a division of Scotia Capital Inc., Member CIPF.

Interest rates on the rise – what should you do?

• GICs and savings accounts.Ifratesgoup,sowilltheinterestyouearnoninterest-bearingaccountsandnewissuesofGuaranteedInvestmentCertificates(GICs).

Giveninterestratefluctuations,it’sagoodideatoestablishaGIC“ladder”–holdingseveralGICsofvaryingmaturities,sothatyouhaveatleastoneGICcomingdueeveryyearthatcanbeinvestedatcurrentrates.

• Credit cards, personal loans, and mortgages.Whilecreditcardratesaresubjecttochange,theydon’tgenerallyriseandfallwiththebanks’primerate.Andifyou’reusingyourcardwisely,you’repayingyourbalanceeverymonthbytheduedate,soyoudon’tpayanyinterestatall.Ifyouneedtocarrydebt,consideralower-interestlineofcreditinsteadofholdinglargecreditcardbalances.

Ifyouhaveavariable-ratepersonalloanormortgage,yourinterestratewillrisealongwiththeprimerate,althoughyourregularpaymentusuallywon’tbeaffected.Ifyouhaveafixed-rateloanormortgage,theinterestwillstaythesameaswhenyousignedon,untiltheendoftheterm.Remember,however,thatatanygiventime,fixed-ratecreditcostsmorethanvariable-

rate—it’sthepriceyoupayforthesecurityofalwaysknowingwhatyourpaymentswillbe.

• Equities and equity funds.Generally,interestrateincreasestendtodepressstockpricesfortworeasons:theymakeitmoreexpensiveforcompaniestoborrow;andinvestorsmaybedrawnawaytofixed-incomesecuritieswithhigher,guaranteedrates.

Theeffectonindividualcompanies,however,canvarywidely.Aconservativecompanythathasnodebt,forexample,mayexperiencelittleornonegativeimpactifinterestratesgoup.Oneofthebenefitsofinvestingthroughanequityfundisthatthefundmanagersmakeanychangesnecessarytohelptoprotectthefund’svaluewheninterestratesrise.

Onewaytohelpmitigatetheimpactofrisinginterestratesonyourinvestmentsistoensuretheyarediversifiedacrossthemajorassetclasses,investmentstyles,geographicregionsandcompanysizes.Abalancedmutualfundsolution,suchastheScotia Selected®Funds,offersalloftheaboveintheconvenienceofasingleinvestment.

YourScotiaadvisorcanhelpyoumakeappropriateinvestingandborrowingdecisionsinanyinterest-rateenvironment.

Ifthepossibilityofhigherinterestratesmakesyouuneasy,you’renot

alone.Fromprospectivehomeownerstouniversitystudentscarrying

aloan,peoplefromallwalksoflifeareaffectedbyrisingrates.

Here’salookathowyourfinancialholdingsanddebtmaybeaffected

whenratesgoup.Inmostcases,asyou’llsee,aslongasyouhavea

diversifiedportfolioandamanageablelevelofdebt,you’llbejustfine.