Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #17
Date: Fri, 4 Apr 1997 20:58:45 -0500 (EST)
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persfin-digest Friday, April 4 1997 Volume 04 : Number 017
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX BROADCAST SERVICE [Oppenheimer Software <Connect-]
Emergency Fund Update [Michael Remily <remily@open.org>]
"Jim" Straw's $100 course on how to be a finder (Phlander Corporation) ["]
Re: US Divorce Rate Is Misstated [balaji@juno.com (Balaji V Ramanathan)]
Signature Loans For Debt Consolidation? [Kennbu@aol.com]
Re: Divorce Statistic - Another View [Les Moskowitz <lmoskowi@mail.bcpl.l]
Tax Brackets ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
Form 2210 Loophole ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
Quicken vs. Quickbooks ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
Debt to Income Ratio? [ktjensen@juno.com]
Re: Paying Penalty for Taxes Due [Tom Gaffney <tgaffney@kent.edu>]
Re: Buying a Stock Before Or After A Split? ["Gary M. Oppenheimer" <00021]
Re: Is the Amazon.com IPO A Good Investment? [Rich Carreiro <rlcarr@anima]
Re: Tax Brackets - When Do They Get Taxed at Different Rates? [Rich Carre]
Looking for Someone Has the Experiences with the Pampered Chef [Trung_Ngu]
Re: Late Estimated Taxes [cweidner <cweidner@home.com>]
How Do I Evaluate Title Insurance Policies? ["Edward R. Fickenscher" <gra]
re: Tax Brackets - When Do They Get Taxed at Different Rates? [Scott Mabe]
Managing Credit Card Debt while in Business School ["Kleinheksel, Brent" ]
Tax Avoidance Strategies ["Schafer, Rick" <schaferr@eng1.otis.com>]
Single stock buying ["dan pearson" <danpearson@ibm.net>]
Protecting Inheritance in Divorce Cases [Jacqueline.D.Richardson@Hitchcoc]
Re: Late Estimated Taxes ["Lester M. Levy, MD" <llevy@hoflink.com>]
Re: Buying a Stock Before Or After A Split? ["Lester M. Levy, MD" <llevy]
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Date: Fri, 4 Apr 1997 20:03:22 -0500 (EST)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
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------------------------------
Date: Fri, 4 Apr 1997 20:04:41 -0500 (EST)
From: Michael Remily <remily@open.org>
Subject: Emergency Fund Update
Earlier we wrote:
We're currently building our emergency fund and hope to have it completely
established by August 1997. We plan on keeping 50% of it in a moneymarket
fund - low interest but easily accesible.
We were thinking of keeping the other 50% in Treasury Bills ( no state taxes
- - -- currently 9%).
- ---------------------
(Editor's Question - Is this insurance against job loss or disability, or
do you have a more specific purpose for the money? -IK)
This fund is to be established for job loss, diability, and maybe major home
repairs if necessary (replace furnace, etc...)
We will be debt free except for our mortgage and hope to have $25,000 plus
in the market. At that point we are planning to go to one income and can
save about $350-500 a month for investments/etc. We do carry a balance of
$1000-2000 in our checking account most months... due to our own budgeting
system.
We figure $10,000 is a good cushion for emergencies.
------------------------------
Date: Fri, 4 Apr 1997 20:06:26 -0500 (EST)
From: "Stahl Enterprises" <stahlenterprises@hotmail.com>
Subject: "Jim" Straw's $100 course on how to be a finder (Phlander Corporation)
Has anyone had any experience with Mr. Straw's company or "course?"
Is it worth the price?
Thanks for comments, from anyone except Mr. Straw.
Donald E. Stahl
St. Louis, MO
stahlenterprises@hotmail.com
------------------------------
Date: Fri, 4 Apr 1997 20:07:51 -0500 (EST)
From: balaji@juno.com (Balaji V Ramanathan)
Subject: Re: US Divorce Rate Is Misstated
>Subject: US Divorce Rate Is Misstated
>
>This is an often quoted figure, with no basis in fact. The actual
>divorce rate is probably much closer to 10% than it is to 50%. The 50%
>figure is determined by taking the number of divorces in a year, and
>dividing by the number of marriages _created_ in a year. The proper
>divisor should be the number of marriages that existed. Unless a couple
>was both married and divorced in the same year, there is a problem here.
This issue led to a very popular joke in which a scientist
divides the number of deaths in a year by the number of births, and
comes to the conclusion that only 80% of Americans die!
All these rates that are quoted as gospel are very ambiguous
and one has to understand exactly what the rate means and how it
was arrived at before drawing any conclusions. I am also reminded
of the joke in which a person who is new in town asks someone what
the birth and death rates were around there. The reply: one per head
like everywhere else!
bye/balaji
------------------------------
Date: Fri, 4 Apr 1997 20:08:46 -0500 (EST)
From: Kennbu@aol.com
Subject: Signature Loans For Debt Consolidation?
Where can one obtain a legitmate signature loan for $50-100,000 to
consolidate debt when the credit history is perfect?
------------------------------
Date: Fri, 4 Apr 1997 20:09:33 -0500 (EST)
From: Les Moskowitz <lmoskowi@mail.bcpl.lib.md.us>
Subject: Re: Divorce Statistic - Another View
>
> The really correct way to measure the divorce rate would be to go 100
> years into the future, count the number of marriages that existed this
> year, count the number those marriages that ended in divorce, and then
> divide the latter number by the former number. Barring time travel,
> however, this is not possible. So the 50% figure is a pretty good
> approximation of the real figure, assuming both the marriage rate and
> the divorce rate are more or less constant across years.
Very well stated. The confusion is one of semantics.
I view the question as: "A couple gets married this year. What is the
probability that the marriage will eventually end in divorce?"
And the answer to that question is apparently approximately 50%.
It may be a misnomer to refer to that as the "divorce rate". By that
reasoning the "death rate" would be 100%.
But the 50% figure answers the question which is of interest.
Les
------------------------------
Date: Fri, 4 Apr 1997 20:10:49 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Tax Brackets
There are five tax brackets: 15%, 28%, 31%, 36% and 39.6%, but for "net"
long term gains only, it is the maximum 28%.
- --
Louis J. Schwarz, CFP, RFC
Silver Spring, MD
sfc@deafcfp.com
------------------------------
Date: Fri, 4 Apr 1997 20:11:34 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Form 2210 Loophole
If you know how to fill Form 2210, you may be able to reduce the cost of
penalty by using Turbotax's Form 2210 and trying the annualization
method because you may receive larger income during the last part of the
year. I do that frequently for my investors.
- --
Louis J. Schwarz, CFP, RFC
Silver Spring, MD
------------------------------
Date: Fri, 4 Apr 1997 20:12:02 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Quicken vs. Quickbooks
Being a faithful user of Quicken and Quickbooks for many years as well
as to encourage my clients to use either one, let me suggest, if it is
for personal usage or investment analysis, stick to Quicken. If it is
for sole propiership or one person-owned business, Quicken will be
sufficient. For better business viewpoint, Quickbooks or Quickbooks
Pro will be better choice. Also, for those who submit quotation bids or
hire some employees, Quickbooks will be most feasible one.
Only difference is that Quickbooks consumer more disk space as well as
memory space - a bit slower than Quicken.
If you are serious investor, stick to Quicken.
- --
Louis J. Schwarz, CFP, RFC
Silver Spring, MD
------------------------------
Date: Fri, 4 Apr 1997 20:12:34 -0500 (EST)
From: ktjensen@juno.com
Subject: Debt to Income Ratio?
I was wondering if someone can clearly explain how to calculate Debt to
Income Ratio?? Also I realize that the ideal Debt is zero, but what is
the typical upper limit that someone should be concerned about if they
reach it? What do Banks get concerned about when a consumer reaches??
Please email any responses directly to me in addition to posting in
PERSFIN. Thanks in advance!!
ktjensen@juno.com in Louisville, Kentucky
------------------------------
Date: Fri, 4 Apr 1997 20:14:49 -0500 (EST)
From: Tom Gaffney <tgaffney@kent.edu>
Subject: Re: Paying Penalty for Taxes Due
It is unlikely, (from my past experiences), that if you do pay your tax bill
on April 15th, the IRS will never send you a bill for any penalties. This
is just an observation.
(Editor's Comment - That's because the Form 2210 penalty will already be
included in your tax bill. If you pay the tax, you won't incur any
additional penalties but you already have been penalized. -IK)
------------------------------
Date: Fri, 4 Apr 1997 20:18:40 -0500 (EST)
From: "Gary M. Oppenheimer" <0002180241@mcimail.com>
Subject: Re: Buying a Stock Before Or After A Split?
If I own 500 shares of a $100 stock, and it splits into 1000 $50 shares,
then the value of the stock remains the same.
However, since brokerage houses tend to charge commissions based on a
number of shares purchased or sold, the cost of the sale/purchase of a
stock would be cheaper before the split than after the split.
Take Care,
Gary
(Editor's Comment - Actually, there is no standard way of calculating
stock commission. Some brokers do it on the total dollar value of the
trade, others on number of shares. One I know of (Fidelity) actually does
it 3 ways (these 2 plus one other way) and charges the commission in the
middle! If you want to have some fun, phone up Fidelity and ask them to
explain their commission formula. -IK)
------------------------------
Date: Fri, 4 Apr 1997 20:20:36 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Is the Amazon.com IPO A Good Investment?
>I read today that amazon.com is going the IPO route. I was wondering
>whether anyone thinks it's a good idea to participate. Usually, we don't
Well, it's probably a moot point. Aside from Amazon employees, I'd be
utterly shocked if any "ordinary" people get a chance at the IPO. Between
funds and big money customers of the underwriter, I can't see any shares
being left for the average Joe. And if there were, I'd then be very leery
of buying it because when IPOs are available to the small investor, they
are often dogs.
Rich Carreiro
rlcarr@animato.pn.com
(Editor's Question - What should Amazon's market cap be? Their assets are
a few computers and some software. They're basically a book broker. -IK)
------------------------------
Date: Fri, 4 Apr 1997 20:21:26 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Tax Brackets - When Do They Get Taxed at Different Rates?
>At what dollar figure do salaries get taxed at different rates? For
>example, salaries that range from $a to $b are taxed at c% and
>salaries that range from $d to $e are taxed at f%, etc. I'm just
>trying to find out what bracket I'm in and how close I am to the next
>bracket.
It depends on what either income you have. The bracket system is
unified -- it applies to all taxable income. Basically, you total up
your wages, investment income, etc. and subtract out your deductions
(standard or itemized) and exemptions to get your taxable income. You
then compute your taxes based on that. The brackets are laid out on
the final page of the Form 1040 (and probably other forms)
instructions. The bracket rates are 15%, 28%, 31%, 36%, and 39.6%,
but the breakpoints change according to filing status.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Fri, 4 Apr 1997 20:22:16 -0500 (EST)
From: Trung_Nguyen@stratus.com
Subject: Looking for Someone Has the Experiences with the Pampered Chef
Hi,
I would like to talk to someone who has the experiences with the
Pampered Chef (one of the MLM selling kitchen tools).
You can email or call me at 508-229-4126.
Trung
------------------------------
Date: Fri, 4 Apr 1997 20:23:25 -0500 (EST)
From: cweidner <cweidner@home.com>
Subject: Re: Late Estimated Taxes
I believe that if "some" of your estimated taxes come from with-holding
(even a small amount) you are relieved from timely rule (if done before
end of tax year) Maybe even if done by Jan 15th of next year.
My technique is if i perceive a problem (although retired and no
salary) is to have my IRA make me a distribution, and the trustee can
take the withheld taxes (both state and federal) out of the
distribution. My trustee can even make the distribution 90% fed and 10%
state in case i really don't want cash. Also, if not enough in IRA, my
profit sharing pension plan distribution can be rolled overinto the IRA
to access the money. (PSP won't make withholding.) Hope this helps. May
want to confirm solves problem with CPA or IRS. (If CPA on line would
appreciate confirmation).
------------------------------
Date: Fri, 4 Apr 1997 20:24:13 -0500 (EST)
From: "Edward R. Fickenscher" <grants@cs.wustl.edu>
Subject: How Do I Evaluate Title Insurance Policies?
I'm in the process of buying a house, and the lender requires "Title
Insurance," which I suppose most people know, protects me and the lender
if there is a future cloud (such as an undiscovereed lien) on the title.
My question is, how oes one evaluate a policy? From what I can tell, all
the title companies are linked with lenders, and their prices don't vary
by more than 5% from each other.
Any thoughts?
Thank you.
Ed Fickenscher
Washington University
St. Louis, MO 63130
------------------------------
Date: Fri, 4 Apr 1997 20:25:07 -0500 (EST)
From: Scott Mabel <sco@snowhill.com>
Subject: re: Tax Brackets - When Do They Get Taxed at Different Rates?
Robert, I clipped a chart from USA Today titled "1996 Tax Rate Schedules
It says, "for single taxpayers:"
INCOME: TAX Of amt more than:
- ---------------------------------------------------
0-$24K 15% 0
24K - 58,150 $3600 + 28% $24000
58150-121,300 13,162+31% $58150
121,300-263,750 32,738 + 36% $121,300
263,750- 84,020 + 39% $263,750
"For married taxpayers filing jointly:"
0-40 15% 0
40-97,000 6K + 28% 40
97-148,000 22K + 31% 97K
148K - 263,000 37,700 + 36% 147K
263K - 79,445 + 39.6% 263k
Remember, this is for "taxable" income.
HTH,
Scott
------------------------------
Date: Fri, 4 Apr 1997 20:27:17 -0500 (EST)
From: "Kleinheksel, Brent" <Brent.Kleinheksel@Grubb-Ellis.com>
Subject: Managing Credit Card Debt while in Business School
Note: I think he implied that his Stafford Loan is for tuition and living
expenses, and he is looking for an outlet to help manage his credit card
debt? I am entering the MBA program at the University of Notre Dame, In
addition to the Stafford Loan, there is the MBALoans program which is a
credit based program. After reviewing fellowships, financial aid, etc..
the MBA Loans program will loan x amount based on your past credit
history.
I would be interested in additional sources of financing as well. I have
not yet received notification of the amount of my financial aid award - so
I am in a state of limbo. If any have heard of other, perhaps, smaller
programs / scholarships that may be available please let us know.
Thanks,
Brent M. Kleinheksel
------------------------------
Date: Fri, 4 Apr 1997 20:28:19 -0500 (EST)
From: "Schafer, Rick" <schaferr@eng1.otis.com>
Subject: Tax Avoidance Strategies
I've just received 3 books on tax planning (ordered thru Ira Krakow's
Bookstore, BTW -- nice links, Ira),, but while I'm reading I thought I'd
pose my 'problem' to the persfin group.
In 95 my wife & I bought some rental properties. We have 9 units. Now
they are beginning to be profitable. After taxes '96 I had a $6k
positive cash flow; this year I may have $15k. That;s about as much as
we'll see each year unless we buy more property (a possibility). I work
full time, my wife is home with 2 young kids. The $6k puts us in the
28% marginal tax bracket.
I'm looking for recommendations about how best to handle this income
w/out incurring a large tax increase. I do need the cash on hand for
now as I want to build a 6 month reserve (about $30k).
Thoughts?
Rick Schafer
------------------------------
Date: Fri, 4 Apr 1997 20:28:55 -0500 (EST)
From: "dan pearson" <danpearson@ibm.net>
Subject: Single stock buying
Hi Kristina,
There are a number of ways to get that first share, and a number of
services that also offer information specifically on stocks with DRIPs.
I have invested a good deal in DRIPs and have assembled some links to some
of these newsletter/services at:
http://members.aol.com/danp37/drips.htm
I love investing this way...I really don't have the cash to buy positions
in everything I'd like to own. This way I can send off my measly $50/$100
per month to whichever company seems to be the current value.
...dkp...
------------------------------
Date: Fri, 4 Apr 1997 20:29:26 -0500 (EST)
From: Jacqueline.D.Richardson@Hitchcock.ORG (Jacqueline D. Richardson)
Subject: Protecting Inheritance in Divorce Cases
With all this talk lately of divorce statistics it has brought to mind
something that has been on my mind for some time now so I thought I would bring
it up in this forum and see if anyone had any suggestions.
My husband and I are working very hard to create a secure (early) retirement
for ourselves. We are well diversified in mutual funds and have bought our
first multi-family house and are looking for more good ones. By the time we
die there should be a tidy collection of property and investments that will go
to our two sons. Our oldest son is married to a girl who admits that if she
has a nickle in her pocket she can't rest until she spends it and that she has
champaign tastes on a beer budget. Our other son isn't married, but his
girlfriend has a much better financial head on her shoulders.
Once our kids come into their inheritance I would hope they managed it well,
but my concern is if there should be a divorce after we die. Now there are
those that say what should I care - I won't be around, but my feeling is that I
have worked very hard in order to provide for retirement and my children and
grandchildren are the ones I want to get the benefit of it once I'm gone - not
some former wife that will blow it.
Anyway, I would like to educate myself on various trusts and/or other ways to
handle these things (such as the irrevocable trusts, etc.) and was wondering if
there are any good books anyone could recommend that I could read or other
places I could find this info. Once I get a little background info I would
then go to the appropriate lawyer to do whatever needed to be done, but I don't
want to go to the lawyer before I have a firm background knowledge of what is
available.
Thanks for any suggestions you may have.
jackie
Jacqueline.D.Richardson@Hitchcock.org
------------------------------
Date: Fri, 4 Apr 1997 20:30:18 -0500 (EST)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Late Estimated Taxes
"Barry H. Rodin" <brodin@pica.army.mil> wrote:
Since Form 2210 is rather complicated, why not just wait until the
IRS sends you a bill?
The IRS doesn't know how your income, and deductions were spread out
over the tax year. They will assume that they are uniformly distributed.
If the bulk of your income was toward the end of the year, there will be
a real advantage to filling out the schedule A1 on the third page of
form 2210,(as well as page one and two), and selecting the annualized
method at the top of page one. It's complicated and tedious, but can
have real benefits over what the IRS will come up.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Fri, 4 Apr 1997 20:31:04 -0500 (EST)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Buying a Stock Before Or After A Split?
Mary Thompson asked whether to buy a stock before or after a split...
I think there's some statistical data that shows that stock prices
tend to go up after a split, although there's no fundamental reason
why they should. Possibly people who can't afford 100 shares of the
original stock are buying when the stock is cheaper? It's possible
that since this information was released the trend has changed with
more people trying to buy before a split. All in all it's not likely
to make a huge difference if you're planning to hold the stock a long
time.
- - -Francesca (not a professional)
A stock split per se does not change the value of the equivalent amount
of stock. However, there are at least two factors which modify the
situation:
1) Stock splits often are accompanied by an increase in dividends. In
this case, when the split and the dividend increase are announced, there
often is an increase in price before the actual split.
2) There is some evidence that reducing the price of a stock by
splitting the stock makes it easier for future purchases.
Psychologically, and financially, people are much more apt to buy 100
shares of a $50 stock, that 100 shares of a $100 stock. That means that
a company like microsoft or general electric that seem to split when the
stock moves above $100, make it easier for a good market to be
maintained in the stock and facilitate future price increases.
If you prefer not to spend $10,000 or more for a 100 share block, then
wait until after the split.. but it won't make any difference in the
long term... and you could have bought 50 shares before a 2 for 1 split
and end up with 100 shares.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
End of persfin-digest V4 #17
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