When it comes to debt, all your eggs do belong in one basket

1. Mark Huber, CFP SetForLife Financial Services Tel: 604-207-9970 mhuber@HowToBeSetForLife.comhttp://www.HowToBeSetForLife.com When it comes to debt, all your eggs do belong in one basket

2. Conducted through the IFID Centre by Moshe Milevsky & Maritz Research 1,261 Canadian homeowners surveyed between September 15 – 21, 2005 The research study The survey by Maritz Research conducted between September 15 – 21, 2005 of Canadian homeowners has a margin of error of +/-2.73 per cent, 19 times out of 20. The number of Canadian homeowners surveyed was 1,261.

3. 55% of Canadian homeowners surveyed have household debt Many with different Types of debt Interest rates different Creditors Maritz Research survey

4. By spreading out debts at different interest rates Known as “Space diversification” Canadians are losing money

5. Consolidate at one low interest rate Only 33% had tried this approach Nearly 40% thought there was no advantage to consolidating How you can stop losing money

6. In one line of credit, combine debts and short-term savings Don’t let money wait in low interest accounts while debt accumulates in higher rate accounts Known as “time diversification” Another key to the most savings

7. Two families with identical debt Each family Owes $94,709 Contributes $1,000 toward repayment each month Case Study Part 1: Diveronicas vs. Consuelos

8. Diveronicas payments *Based on 20 year amortization period and an assumed fixed three year term interest rate

9. Consuelos payments

10. On average, Consuelo family will owe $929 less after year 1 $970 less in the second year Which family is better off?

11. Would still see significant benefits in years 1 and 2 After the 3rd year of increase, this ends Debts best kept separate if: Short-term interest rates are above mortgage rates What if interest rates go up?

12. Eliminate space and time diversification Complete consolidation strategy All the eggs in one basket

13. Same debt - $94,709 Same monthly payment amount - $1,000 Difference: Diveronicas maintain a savings account with a $2,700 balance Case Study Part 2: Diveronicas vs. Consuelos

14. After year 1, the Conseulos will have $3,763 less debt Overall, the Conseulos will be better off by: $1,063 after year 1 Additional $1,289 at the end of 2 years So which family is better off?

15. Consolidate all your debts at as low a rate as possible Make sure you don’t have excess cash sitting around Make sure to pay down your debts, and in a sense, earn a much better after-tax rate of return Learnings from the study

16. Thank you • For a full report of the study conducted by Maritz Research, visit www.ifid.ca/research.htm • Thanks to the IFID Centre for all references made to the study findings.

17. Important note • The commentary in this presentation is for general information only and should not be considered investment or tax service to any party. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situation. • Manulife Investments is the brand name identifying the personal wealth management lines of business offered by Manulife Financial and its subsidiaries in Canada. As one of Canada’s largest integrated financial services providers, Manulife Investments offers a variety of products and services including: segregated funds, mutual funds, principal protected notes, annuities and guaranteed interest contracts. • Manulife and the block design are registered service marks and trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.