Wednesday, October 25, 2006 · Page 12 There's nothing more comforting than rice pudding for breakfast, a snack or dessert. 3/4 cup 3/4 cup 1/4 1/4 cup 1 leftover cooked rice, preferably basmati or jasmine almond milk teaspoon ground cinnamon sliced almonds, roasted teaspoon honey Quick Cinnamon-Almond Rice Pudding From: Her Desk Drawer Jim Augerman B.A. B.Ed CFP FMA CSA Certified Financial Planner Kingsville Tamara Cooper Clarica Advisor Cottam & Essex Why do interest rates matter? Q. Jim and Tammy, interest rates have continued to rise over the past year. How big of an impact does this make on the average person like me? A. Interest rates matter to all of us savers, spenders, businesses, creditors and debtors. Think of it this way: the interest rate is simply the cost you pay to borrow someone else's money or what a bank, credit union or insurance company will pay you for lending them yours. Let's say you borrow $10,000 and the interest rate is 5 percent. You will have to pay roughly $500 in the first year in interest, in addition to beginning to pay down the original $10,000 loan. If you are a saver and you can earn 5 percent on your investment, your institution will credit your account for $500 for the year in return. The higher the rate, the more you pay or get paid! Now, let's extend this to a bigger purchase such as a $175,000 mortgage. If you were able to borrow for, as an example, 5.5 percent today and locked in for five years, your bi-weekly mortgage payment would be $492. At the end of the first 12 months, you will have paid a total of $12,802. Of this amount, $9,417 is interest and only $3,385 has gone against the principal. At the end of year five, your original mortgage balance would be down to $156,077. But, if interest rates have climbed just 2 percent to 7.5 percent, your payment increases to $574 at renewal, for a new annual total of $14,924. This is why interest rates matter: just a small increase in rates can cost a lot more out of your pocket than you may realize. At 5.5 percent over 25 years on a $175,000 home, you will have paid $175,000 principal plus $145,064 interest for a total of $320,064. At 7.5 percent over 25 years on that $175,000 home, you will have paid $175,000 principal plus $208,426 interest for a whopping $383,426. Microwave instructions: Combine rice, milk and cinnamon in a microwave-safe serving bowl. Cook on full power for 1 minute, then stir and cook 1-2 more minutes, until milk is thicker and rice is a bit creamy. Top with almonds and drizzle with honey. - News Canada Combine rice, almond milk and cinnamon in a small saucepan. Turn heat to medium and bring to a simmer, stirring occasionally. Reduce heat to medium-low and simmer gently for 4 to 5 minutes, until milk is thicker and rice is a bit creamy. To serve, place in a bowl, top with almonds and drizzle with honey. Think it pays to shop around on your mortgage?! But again, on the savings side, what if you put just $100/month in an RRSP every month from age 25 to 65 (40 years)? At an average 6 percent rate of return, you will have $191,696 at retirement. Just a 2 percent better average over those 40 years equals $324,180. Who would think 2 percent could equate to greater than $130,000! Again, it pays to shop around and have someone pay close attention to your savings rates and program. Interest rates do affect all of us, just in different ways and in different amounts. They also affect the value of the Canadian dollar but that's a discussion for another time. Jim Augerman and Tammy Cooper are your local, "home-town" Clarica advisors. 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