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Subject: persfin-digest V4 #6
Date: Fri, 14 Mar 1997 10:20:14 -0500 (EST)
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persfin-digest Friday, March 14 1997 Volume 04 : Number 006
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX REPLY SERVICE
Back from Aruba!
Re: Margin Interest Deduction
Thanks for the Correction
Interest Calculations Gone Awry
Interest Rate Strategy - Ethical or legal?
I've Also Had Great Success Buying Programs Off The 'Net
Re: Can I Open an IRA While Contributing to a 401(K)?
Re: How Excel 97 Stores Dates
Web Site for Microsoft Date Issues
Check Out Kiplinger's TaxCut's State Versions
Any Companies Sell One Share Of Stock Directly to an Individual?
Check Out Microsoft's File Transfer Utilities
Re: Buying the Latest Technology Builds Company Morale
Long Distance Divorce
Zip Drives vs. LapLink
Intuit Emphasizes Customer Service
DJIA composition change
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Date: Fri, 14 Mar 1997 09:18:52 -0500 (EST)
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------------------------------
Date: Fri, 14 Mar 1997 09:36:12 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: Back from Aruba!
I haven't published the Digest since Saturday because my wife and I
took a short vacation in Aruba. I'll be catching up with emails over the
next few days. For those who thought they had been unsubscribed or that I
was dead, fear not. You're still subscribed and the rumors of my demise
have been grossly exaggerated.
A few comments on Aruba. The weather is ideal - about 85 degrees
Fahrenheit, with a wonderful breeze that takes all the edge off the heat.
The island ("One Happy Island" as the license plates put it) is totally
geared to tourists spending their money. Food is expensive (plan on $30
per person for dinner). Lodging is expensive as well. It's basically a
beach destination.
Since this is a magazine concerned with saving money, if you'd like the
same weather for a bit less, consider either (1) the western coast of
Mexico (Puerto Vallarta or Acapulco), or (2) Puerto Plata (Dominican
Republic), or (3) South Florida. By mid March Florida's weather isn't so
bad and it's PR problems are, I think, a bit overblown. When a tourist
destination has PR problems, you can usually catch a bargain.
While we were there, a cruise ship (the Carousel) docked and all its
600 passengers were sent home. Seems about 200 of the passengers got sick
(the symptoms as described in the local paper sounded like Legionnaires
Disease) and the ship was "disinfected". Don't know if this news made it
to the States. I wonder how often this type of thing occurs.
Waiting for spring....
Ira
------------------------------
Date: Fri, 14 Mar 1997 09:37:16 -0500 (EST)
From: hrj@juno.com (Harold R Justice)
Subject: Re: Margin Interest Deduction
Rick,
You always give excellent advice but you shot from the hip on part of
your answer about deducting margin interest. You are correct that the
interest is deductible to the extent you have investment income but
incorrect that the allowed deduction is subject to the 2% of AGI floor.
The allowed deduction is put on line 13 of Schedule A and IS NOT subject
to the 2% limitation.
Harold
Part of Rick's post follows:
Assuming you used the proceeds of the margin loan to buy
non-tax-exempt securities, the margin interest is investment interest
and is a Sched A deduction to the extent there was investment income
and also subject to the 2% of AGI floor.
If the margin loan was used to buy tax-exempt securities, or was not
used to buy securities at all (to buy a car, for example), the margin
interest is NOT deductible at all.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Fri, 14 Mar 1997 09:37:44 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Thanks for the Correction
Thanks for the correction!
== Rich
------------------------------
Date: Fri, 14 Mar 1997 09:38:57 -0500 (EST)
From: "Rick Rosinski" <rosinski@concentric.net>
Subject: Interest Calculations Gone Awry
>Subject: Re: Paying Off The Mortgage
In my case, last year I make a total of about $12,000.00 in mortgage
payments & over $11,000.00 of that was interest. That's over 90% not
7%. Everyone thinks they have a 7 or 8% loan & after a few years the
interest will decrease but they should take a closer look. This 90%
interest has been going on for over 10 years & will still be going on
10 years from now. So it's a GUARANTEED 90% ROI and it is good
for years. You can't get a guaranteed INVESTMENT like that.
+++++++++++++++++++++++
The above analysis is completely inaccurate.
If one had a $100,000 loan and a 8% interest rate, the annual interest
would be approximately $8,000 (not counting for principal paydowns). That
comes out to 8%, and not 90% interest. If it was 90%, then the annual
interest would be $90,000, not $8,000.
You are trying to compare the interest you are paying to the amount of
principal being paid down on the loan. These are two completely different
calculations.
Using this same rationale, how would you account for the fact that if you
take out a Bank Certificate of Deposit, you EARN all interest and never pay
back any principal (unless you close out the CD). Are you earning 100%?
Of course not.
------------------------------
Date: Fri, 14 Mar 1997 09:39:36 -0500 (EST)
From: "Rick Rosinski" <rosinski@concentric.net>
Subject: Interest Rate Strategy - Ethical or legal?
>From: "Peter Palma" <rpalma@msai.mea.com>
>Start two loan applications with two different companies that
>have low initial application fees.
>Lock one and let the other float for the month (or until right before
>you need to close). Then, take the whichever loan has the lowest rate at
>the time.
>It's not illegal, and as long as you haven't signed some sort
>of penalty contract, it won't cost you anything except a lost application
>fee.
This actually MAY be illegal, depending on the documents you have signed.
If you lock a rate on a loan, most if not all, financial institutions will
have you sign some sort of "rate lock agreement." If you are approved for
the loan, this document may legally bind you to close that loan. There
would be nothing against refinancing it concurrently with another loan
elsewhere, but you should read all rate lock agreements carefully.
Another point is that again, most, if not all, loan applications ask if you
are applying or have loans for the same property at other places. You have
to disclose this, and the other financial institution, if smart, may
hesitate on taking a new loan application. Plus whoever takes your credit
report second-in-line will see that there has been another recent credit
report run, and they will (should?) question that.
Lastly, if you are able to get through all this with two offers of loans,
and you decline one of them at the last minute, I wouldn't try doing
business with the snubbed financial institution again. They will be quite
peeved.
Rick Rosinski
Freeland, MI
E-mail: rosinski@concentric.net
http://www.concentric.net/~rosinski
------------------------------
Date: Fri, 14 Mar 1997 09:40:26 -0500 (EST)
From: geneand@wtrt.net
Subject: I've Also Had Great Success Buying Programs Off The 'Net
Also had great success buying a program off the net.
Our county clerk's office recently started scanning public records. The office
would furnish a tape of scanned documents or a CD from past week.
Needed software to read and/or print these files.
Found Presto! and downloaded the program for believe $10 or $15 dollars.
Everything worked fine and the program did everything we needed and much more.
Gene Anderson (geneand@wtrt.net)
Credit Bureau of Hereford (TX) Inc.
------------------------------
Date: Fri, 14 Mar 1997 09:41:53 -0500 (EST)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Can I Open an IRA While Contributing to a 401(K)?
>From: dysart@pacific.tensornet.com (Derek Dysart)
>I have simple question regrading IRA's. I am 24, and I
...
>benefits. Currently I am making regular contributions to my
>company's 401(k) program. I contribute 6%, and my company matches
>3%. My question is, can I open an IRA while making contributions to
>a 401(k)? Would any IRA contributions be tax deductible? Is there
IRA contributions may not be deductible if you make over a certain
amount of money (or may be only partially deductible). If you
can contribute a higher amount to the 401k, (most seem to be up
to 15%), you might want to do that instead - the entirety of the
401k contributions will be fully deductible.
- --D
------------------------------
Date: Fri, 14 Mar 1997 09:44:01 -0500 (EST)
From: Gary Schwartz <gary@netcomuk.co.uk>
Subject: Re: How Excel 97 Stores Dates
Barry Rodin wrote:
> (Allan Spann suggested doing a 30 year bond calculation to test the Year
> 2000 problem.)
>
> Using Excel 97 I found the split to occur at a different point:
>
> 1/1/29 --> 2029
> 1/1/30 --> 1930
>
> This could be a problem if one were not aware of it.
>
> However:
> 1. If you enter a year as 4 digits, Excel will record it that way.
> 2. The problem only occurs upon *entering* data. Once it is entered,
> Excel records it internally as a 4-digit year, and it stays that way
> regardless of the passage of time or the change to a new version of Excel.
Actually, XL seems to store dates as long integers, meaning that one
can store a date in XL up to the date corresponding to the highest
16-bit integer - 65535 (the range is 0-65535, not 1-65536). On my machine
this corresponded to 154 dates past 12/31/2078, which was the highest
date I could get.
Interesting that a 32-bit application uses 16-bit integers? (I was using
Microsoft Excel version 7.0 for Windows 95.)
gary
------------------------------
Date: Fri, 14 Mar 1997 09:44:42 -0500 (EST)
From: Nick Lebredo <NLebredo@exchange.ureg.ohio-state.edu>
Subject: Web Site for Microsoft Date Issues
Barry H. Rodin writes...
>(Allan Spann suggested doing a 30 year bond calculation to test the
Year 2000 problem.)
>Using Excel 97 I found the split to occur at a different point:
1/1/29 --> 2029
1/1/30 --> 1930
>This could be a problem if one were not aware of it...snip
This is a web page that lists the upper year limits for Microsoft's
products...
http://www.microsoft.com/cio/articles/year2000faq.htm
------------------------------
Date: Fri, 14 Mar 1997 09:46:33 -0500 (EST)
From: lee@elvis.viewlogic.com (Lee Yee)
Subject: Check Out Kiplinger's TaxCut's State Versions
Ira,
I'm in a similar situation as yours, that is, being the unofficial tax
preparer for my family. However, I've been using Kiplinger's TaxCut.
One thing I like that isn't available from Intuit is a multi-state CD-ROM
version. Although I ordered it directly from Kiplinger, I've found it
available at CompUSA for $20. This is much less expensive than buying
multiple state editions of TurboTax at $25-30 each so don't discount
CompUSA and Egghead yet!
- -Lee
(Editor's Question - Can you buy and download it from Kiplinger's Web
site? No real need for CompUSA's or Egghead's cut. -IK)
------------------------------
Date: Fri, 14 Mar 1997 09:47:15 -0500 (EST)
From: Steven Klein <SKLEIN@snm.org>
Subject: Any Companies Sell One Share Of Stock Directly to an Individual?
Does a list exist of companies that will sell just 1 share of stock directly
to an individual? I know there are companies that will sell shares directly
after an initial purchase through a broker.
Steve
------------------------------
Date: Fri, 14 Mar 1997 09:48:14 -0500 (EST)
From: lee@elvis.viewlogic.com (Lee Yee)
Subject: Check Out Microsoft's File Transfer Utilities
Scott,
Microsoft has been including file transfer utilities with their
recent operating systems. If you are running DOS 6.x you can use
Interlink to connect two PC's. If both PC's have Windows 95, then
use the built-in direct cable connection utility. The latter has the
advantage of accessing CD-ROM drives. You'll still need to buy either
a serial or parallel "Laplink" or "Interlink" cable for $5-$10 (the
parallel is faster).
Lee
------------------------------
Date: Fri, 14 Mar 1997 09:50:03 -0500 (EST)
From: Michael E Kurela <mk87+@andrew.cmu.edu>
Subject: Re: Buying the Latest Technology Builds Company Morale
> Subject: Stay A Bit Behind Technology and You'll Save A Bundle
> We use a 486 with a 120MHz processor, and have increased RAM to 32MB.
We do > business software, internet access, Excel spreadsheets etc, and
with this
> configuration have had no problems. Sure, a faster computer might be
more > fun, but then again, so would a faster car.
One should not disregard the additional productivity brought about by
the increase in morale by getting new equipment. Our office stays on
the cutting edge, replacing at least 25% of our machines every year. It
instills a sense of pride in people who care about what equipment they
are using. Also, you'll find that your staff respond very well if you
purchase the equipment that they ask for, provided it is not hugely
unreasonable.
It sure is a joy to have 2mb spreadsheets snap onto the screen without a
wait. The frustration that a person feels from working with equipment
they perceive to be old and slow builds up. If spending an extra 1k here
or there removes that frustration and makes people happy, it's money well
spent.
Lagging technology does not always benefit over the long-term if you
consider software support, repairs, lost productivity, near zero resell
value, and low employee morale. You can take a 486 and donate (or sell)
it to a school where it will benefit you two ways: tax deduction (if
donated) and improving student access to technology.
> Computer manufacturers have succeeded very well in creating planned
> obsolescence. The leading edge of technology is always going to be the most
> expensive. My wife's father bought her a hand-held calculator for college in
> 1972, back when they were a new "toy", for $110. Two or three years later you
> could buy a calculator with the same power for $15.
I now have a 166mhz pentium and 32mb ram. I feel certain that it will
suit my needs for at least the next 6 months. However, with memory
priced as it is right now (approx $80 for 16mb EDO ram) I'll probably
increase it to 48 or 64. That calculator for $110 was undoubtedly
"worth" $110 to your father in law the day he paid for it. As it neared
obsolesence and demand decreased, of course the price went down. An
abacus works, but who wants one ?
> The processor is going to be the most expensive part of the machine. To my
> thinking, you will get much more bang for the buck by buying a slower
> processor, lots of RAM, a huge hard drive, and a 28,800 baud internal modem.
> Then later, if you just have to have that glitzy sexy super fast 600MHz
> processor, you can upgrade to that while keeping all of the other components.
We also use large, high quality monitors to reduce eye strain and
headaches. The monitors tend to run around $800 or more, depending on
the manufacturer.
We've found that monitor can be more expensive than the processor, but
lasts a lot longer.
The human brain processes visual and auditory information very quickly.
The better you match the tools you use to the speed at which you can
process information without creating attention deficits or sensory
deprivation caused by waiting, the higher your productivity will be.
> Stay a little behind the leading edge of technology. Save a lot of money.
>
> John Leipold
I would not lag technology by more than a year. If you are using a 486,
it's time to give it to your children, sell it, or donate it and upgrade.
> (Editor's Comment - I agree. Databases, for example, are disk
intensive. > Word processors simply don't
> tax the CPU. For spreadsheets, it's only a factor in recalculations. -IK)
Ira, not entirely true. When you queue up a large document with a few
graphics, the processor makes all the difference in the world.
Especially true with Power Point, Pagemaker, or Photoshop.
- --mk
Michael Kurela
Financial Analyst, University Planning
Flex-Time, Graduate School of Industrial Administration
Carnegie Mellon University
(412) 268-1002 : Office
------------------------------
Date: Fri, 14 Mar 1997 09:52:35 -0500 (EST)
From: Jim & Sue Richmond <richmond@nh.ultranet.com>
Subject: Long Distance Divorce
Dear Persfiners,
I have some questions about a rather tragic divorce (I guess they all
are?). The two parties are now living in different states.
Here are the facts:
-My aunt lived in CA for 25-30 years while married. She moved to MA
after an unofficial separation about a year ago (I believe this
will become permanent). Her husband still lives in CA.
-She had a part-time job but is now disabled due to symptoms
resembling altimers disease (no diagnosis yet, several doctors
visits, may be depression). She gets very small disability
payment.
she is often nearly incoherent and can barely take care of
herself physically, let alone deal with her finances.
-She has over 25k in credit card debt from before the separation.
It is unclear (she doesn't know) if the credit is in her
husband's name also. I think most of the charges were from
him using duplicate card but I'm not sure. Credit agencies have
located her and are becoming more aggressive. She has nothing to
give.
-Husband recently sold family residence in CA but there was little
or no equity.
-Couple has few assets which include a motor home, vehicles and
husband's retirement benefits. Value of his retirement is not
known.
He probably earns plenty as an engineer in CA. He is approx 60
years
old and worked for an aerospace firm for 25-30 years.
(He lives in the motor home now, wife lives with my mother in MA)
-Husband sends approximately $200 per month (not reliably) for
support.
-My aunt may not be capable of dealing with the reality of the
situation
and I think she is somewhat traumatized (of course) from the
ordeal.
She doesn't seem very eager to do much about the situation.
She has been to several doctors but nothing has been found. I
think the symptoms may be the result of the trauma of the
separation.
-My mom has limited resources to support herself, let alone someone
else.
She will continue to support her sister as long as needed but she
is reluctant to be too forceful in moving her sister to do
something.
My aunt's frail emotional state makes the subject difficult to
discuss.
Questions:
-Help! what should we do?
-Are there any women's resource center type places in MA that
could help us sort this out?
-If we convince my aunt to get a lawyer, do we get her one in MA
or CA? How do we go about doing finding a lawyer?
-Is there some research we should/could do to help the lawyer with
facts of case or should we leave that up to them? What should
we do to prepare for a visit to the lawyer? Is there any reading
that
anyone could recommend that would be appropriate?
-What form of payment will the lawyer require? If it's up front,
how
much might it be? Would it be wise for me or my mom to loan this
money or would it be better to have her try to work out a deal
where
payment comes later?
-In addition to dealing with the financial ramifications of the
separation,
my aunt may need help dealing with the emotional consequences.
How and Should we try to help her deal with this aspect of it?
Sorry for the long post and TIA,
Jim Richmond
------------------------------
Date: Fri, 14 Mar 1997 09:53:15 -0500 (EST)
From: "Smiley, Charlie/ATL" <csmiley@CH2M.com>
Subject: Zip Drives vs. LapLink
I believe the Zip Drives are more practical than a package like Laplink.
They come in 100MB(Zip) and 1GB(Jaz) sizes. That is plenty to copy
files from one machine, Swap the drive to the other machine and then
copy onto the other machine. In addition, they are small and portable.
------------------------------
Date: Fri, 14 Mar 1997 09:54:11 -0500 (EST)
From: "CSTEINBE.US.ORACLE.COM" <CSTEINBE@us.oracle.com>
Subject: Intuit Emphasizes Customer Service
Hi, Ira--
I just read your post about your good experience with Intuit. It doesn't
surprise me. I've been interested in working for that company (as a tech
writer), and my research bears out the fact that Intuit has a VERY strong
customer service orientation. Good company, good products; sure wish I could
get an interview there!
Also, thanks for all your good work on the persfin-digest. I really enjoy
reading it every morning.
Cheers,
Cathy
------------------------------
Date: Fri, 14 Mar 1997 10:11:56 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: DJIA composition change
A random tidbit...
Next week, Dow Jones & Co. is changing the makeup of the DJIA for
the first time since 1991, in possibly the biggest change since 1959.
Entering:
Travelers Group Inc.
Hewlett-Packard Co.
Johnson & Johnson
Walmart Stores Inc.
Leaving:
Westinghouse Electric Corp.
Texaco, Inc.
Bethlehem Steel Corp.
Woolworth Corp.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
End of persfin-digest V4 #6
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