Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #28
Date: Sat, 26 Apr 1997 15:20:32 -0400 (EDT)
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persfin-digest Saturday, April 26 1997 Volume 04 : Number 028
IN THIS ISSUE:
ADVERTISEMENT: domainTNG [Oppenheimer Software <Connect-Sales@mcimail.co]
individual life insurance expense NOT deductible on US return ["Thomas J.]
Re: Where should a retired couple invest IRA in [BOB FORD <BOB_FORD@compu]
Why Many Doctors Prefer Capitation [BOB FORD <BOB_FORD@compuserve.com>]
How to fight your HMO [BOB FORD <BOB_FORD@compuserve.com>]
marriage tax penalties - How Can I Fight Them? [ldignan@cmp.com]
Precut Houses - DeGeorge Home Alliance or Miles Homes Service [ktjensen@j]
Early distribution from retirement account for House Down Payment? [Gary ]
Has Iowa Dropped State Inheritance Taxes? ["Jim Reed" <jreed1@airmail.net]
Re: Deducting term-life insurance premiums? Major Gotcha! ["Louis J. Sch]
Re: Best currency exchange rates - Charge Everything ["Louis J. Schwarz, ]
Re: Best Exchange Rates - Beware of Fine Print [hrj@juno.com (Harold R Ju]
Re: Cash gifts for a disabled child ? [Rich Carreiro <rlcarr@animato.pn.c]
Re: On-line Banking and On-line Bill Payment? [Somesh Rao <somesh@syl.nj.]
Re: Paying off Debt? [David Meyers <dmeyers@panix.com>]
Currency exchange rate & potential credit card problems ["Peter Palma" <r]
re:Deducting term-life insurance premiums ["rip west" <rip@montrose.net>]
re:investment clubs ["rip west" <rip@montrose.net>]
On-line Banking and On-line Bill Payment ["rip west" <rip@montrose.net>]
Re: Best currency exchange rates - Charge Everything [Jonathan Corbet <c]
Investment Clubs - My Experiences [Mirin Lew <mirin@scmkt.sr.hp.com>]
Variable Adjustable life Insurance.... [Nikhil Subhash Sarpotdar <nikhil@]
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Date: Sat, 26 Apr 1997 08:38:27 -0400 (EDT)
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------------------------------
Date: Sat, 26 Apr 1997 08:39:31 -0400 (EDT)
From: "Thomas J. Stevens" <amadan@ziplink.net>
Subject: individual life insurance expense NOT deductible on US return
Hi All!
I've recently re-subscribed to persfin after an extended break and saw
Jeff Salisbury's question about "...if term life insurance premiums are
deductible on [personal] income taxes?"
Short answer: NO
Long-winded answer:
I'm not a pro nor a CPA but I am a seasonally-employed paid tax preparer
and I think that the best way to answer Jeff's question is to point out
that the IRS instructions for Schedule A in the form 1040 packet list
"Life insurance and income-protection premiums" as being NOT deductible.
In fact, if your employer is over-generous (in the eyes of the IRS) with
non-contributory life insurance taken in your name then some of the
employer-paid premiums could appear on your form W2 as a taxable
benefit.
Remember that generally all income is taxable unless otherwise
specifically exempted; likewise you need to have something specificied
as being deductible in order to be legally able to use it to reduce your
taxable income. Nothing like that for life insurance expenses on
Schedule A, sorry.
There ARE cases where life insurance premiums could be deducted. One
example would be if you had your own business and paid for life
insurance for employees, but still would not be on Schedule A.
Your benefits administrator may have confused health and life insurance
premiums. You CAN deduct the cost of your health insurance and payments
or copayments for office visits, transportation, treatments,
prescription drugs, medical aids (glasses, hearing aids, canes, etc.)
and so on after meeting the 7.5% adjusted gross income exclusion.
Despite having a kidney transplant and many $$$ in out-of-pocket costs,
etc., I have YET to meet the 7.5% AGI exclusion - much in part to
thankfully having good insurance. That brings up one more point...
If your company offers such a plan, get a pre-tax payroll reduction
payment of your health care premiums and beat the 7.5% exclusion
entirely. You can also use the pre-tax deductions to set up a
reimbursement account for anticipated medical expenses, but you
can't recover excess contributions so you therefore have to be
conservative in estimating anticipated medical expenses.
If you ever exceed the 7.5% AGI exclusion and the total itemized
deductions are still less than the Federal standard deduction, check
your state tax laws (I know this is true for Massachusetts) as it may be
beneficial to file a schedule A with your Federal return in that case to
get the added benefit of deducting the medical expenses on your state
return. This would work only when the difference between the higher
Federal standard deduction and your lower itemized total is less than
the benefit added by the extra medical deduction on the state return.
I assume you've filed for 1996, so if I've misunderstood anything or you
later find something left out of your return to have been deductible,
don't forget that you have 3 years to file a corrected (amended) tax
return using form 1040X.
Sorry for the long-winded answer...I didn't WRITE the tax laws.
Tom
------------------------------
Date: Sat, 26 Apr 1997 08:40:49 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Re: Where should a retired couple invest IRA in
FRED
With regards to your friends mother's IRA. The best thing she can do is
become educated about investments. I know that takes time but it is time
well spent.
If she can not or will not learn about investments, consult a fee only
financial advisor. Tell the advisor up front that all you want is
financial advice.
You will not buy anything from them or any one they recommend.
Have the financial advisor give investments and their risk. Then an
intelligent decision can be made.
Bob Ford
------------------------------
Date: Sat, 26 Apr 1997 08:48:35 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Why Many Doctors Prefer Capitation
>A candid discussion with a physician (or even more tellingly, with a
>physician's business manager, to cite my source) will reveal that
>capitation is, from the doctor's point of view, often superior to
>traditional fee-for-service payments.
THAT IS THE PROBLEM. Of course the doctors like this arrangement. The
faster they can get rid of you as a patient, or not see you at all, the
more money they can make. The less they work, the more money they make.
Isn't that just backwards of the way it should be. Perhaps I could start a
SMO (Software Maintenance Organization). You pay me X dollars each month
to update your software with new releases and fixes. I decide when to do
the updates and whether you need them. Could I get your business?
Also, why does the doctor have a business manager?
> The capitation check appears automatically each month: no delays, no
>billing expenses, no bad debts.
This is good for the doctor but does it have anything to do with getting me
high quality medical care? I don't think so.
>True, the doctor is likely to give short shrift to patients who
>appear frequently with minor complaints,
How does the doctor know a complaint is a minor complaint unless he/she
examines you and does the proper tests? Lets say you have frequent
headaches.
Is it a minor problem or a brain cancer? Your doctor can not tell
without proper and sometimes expensive tests. Short shrift could be
malpractice.
> but doesn't it make social and economic sense to discourage unreasonable
>demands on a limited resource?
Who decides what is unreasonable, the patient or the doctor? The doctor
has a financial incentive to say my complaints are unreasonable. Is that
good for my medical care? Also what limited resource are we talking
about? It surely can not be doctors. There are plenty of doctors.
>People who seek medical aid only when it is genuinely needed,
>yet receive shoddy treatment, have the option of switching to another
>doctor.
If the other doctor is in the same HMO as is usually the case, why would
the other doctor give any better treatment?
>Traditional forces of competition still apply; all it takes is
>a toll-free phone call to deny money to an inadequate physician.
How do you know this is the case? I believe the doctors have a contract
with HMO'S that they must get paid no matter what a patient says. Has
anyone on this list every prevented a HMO physician from getting paid?
>Similarly, specialists who agree to accept drastically reduced fees from
>HMO's do so primarily because they know they will get swift and sure
>payment.
Will excellent doctors accept drastically reduced fees to get swift and
sure payment? I doubt it. There are medical billing systems available to
process insurance claims and guarantee payment in three weeks for $5 per
claim. These systems make a good case for NOT reducing doctors fees to
get paid.
>Given the appalling sums spent on administration and
>bookkeeping in our health care system, this alternative strikes me as an
>excellent way to shed unnecessary costs.
How about the appalling sums spent on HMO administration and salaries for
HMO executives. Add to that dividends paid to stock holders.
>HMO's are also especially well equipped to help people with common
>chronic conditions, like diabetes or heart disease.
How can this be? Diabetes and heart disease require the most hospital
stays of almost any disease. They are the LAST people HMO's want as
patients. HMO's loose money on these patients. HMOs are a business to
make a profit not lose money. Their management knows that if they do not
make a profit, they will be looking for another job in the near future.
Would that give management an incentive to cut corners?
>The companies use their bargaining leverage to drive down the costs of
>medications
They also use the cheapest drugs for an illness. Most HMO's have a list of
drugs that can be prescribed. If the BEST drug for my illness is not on
their approved drug list, the HMO physician CAN NOT prescribe it because
it usually cost more than one on their approved list. Not prescribing the
best drug for an illness seems to be a case of malpractice to me. Anyone
with legal training care to comment?
>and medical equipment, often including the medication in their basic fees.
>Anyone who takes a prescription drug regularly may well be able to save
>money by switching to an HMO
.
You may save money on prescriptions but how much do you save by not seeing
a specialist when you need to? How much do you save if you are out of
work for a week when you would not have been if you got prompt correct
care for your medical problem?
>At the same time, I readily concede that HMO's seize every opportunity
>to shave costs. In an age of "downsizing" and cost-cutting, however,
>this trend seems inevitable and irresistibly.
Why is this trend inevitable and irresistible? Most people want excellent
medical care for themselves and their family. If that means higher
insurance rates to get excellent medical care, people will pay it. If one
doctor gave you fair medical care and another one gave you excellent
medical care, who would you take your sick child to?
>All it takes is a quick look at the costs and availability of "old-style"
>insurance to see what I am talking about.
Insurance cost are up because medical care costs are up. No dispute there.
The thing that must be kept in mind is "IS THE INSURANCE WORTH IT TO YOU".
>The best defense against this trend is not a romantic evocation of the
>horse-and-buggy era but a vigorous application of modern consumerism.
True but not in the sense you probably were thinking about. You have to
find out where you get the BEST medical care. The BEST medical care is
ALWAYS THE CHEAPEST IN THE LONG RUN.
>Patients can no longer afford to sit in the office and meekly assent to
>whatever the doctor says. They must become actively involved in their
>health care, gain a general understanding of the recommended tests and
>therapies, and knowledgeably consent to it all.
How about also knowing what tests should have been done and were not done
and asking your doctor about them. Anyone with access to the INTERNET can
get online information about any illness and become an informed patient.
Often you can become more educated about your disease than you doctor.
The INTERNET can tell you how to contact support groups for your disease
which can be very valuable to you.
>They will then be prepared to argue with the HMO about any questioned or
>denied payments;
Do you really want and need to argue with your only medical care provider,
your HMO, about questions and denied payments. What will happen on your
next visit? More problems and denied payments. Isn't this one problem
area you can do without when you are sick.
>as always, it's the squeaky wheel that gets oiled. (In my experience,
>one or two firm complaints by phone can almost always solve a problem.)
Why should you have to do this. Wouldn't if be nice if you had a problem
with your medical care provider to just go to another medical care
provider?
>Most significantly, they will take charge of their own bodies and their
>own futures, and force the medical prfoession to give us all better
>treatment.
How to you propose to make the medical profession give us all better
treatment if you are in an HMO? The only people that can make HMOs give
better treatment are the stock holders. They would have to say, I want
less dividends so the HMOs can spend more money on treating their members.
Do you think that will happen? If you are in a fee for service and you
get bad treatment you can just go to another doctor? How often can you
switch HMO's?
I recently saw the results of a survey of thousands of physicians. They
were asked a simple question. "If you were seriously ill, where would you
go for help". NOT ONE PHYSICIAN choose an HMO. Here is where these
physicians would go if they were sick.
JOHNS HOPKINS
MAYO
MASS GENERAL
SCRIPPS
UCLA
DUKE UNIVERSITY
CLEVELAND CLINIC
BRIGHAM AND WOMEN'S
M.D. ANDERSON CANCER CENTER
UNIVERSITY OF WASHINGTON MEDICAL CENTER
BARNES HOSPITAL
MEMORIAL SLOAN KETTERING
STANFORD UNIVERSITY
Bob Ford
------------------------------
Date: Sat, 26 Apr 1997 08:51:18 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: How to fight your HMO
>that you can't wait until your appointment with him/her to get a referral
>(I know that sounds bad but that's the only way).
Yes, that is the way it is and that is the problem. Should you have to
exaggerate your illness to be seen by your physician?
Suppose you waited the 6 months to see a foot doctor (Podiatrists) and were
told by the podiatrists that you had a fast spreading cancer of the foot
and it had to be removed. The podiatrist would probably tell you that it
is too bad he/she did not see you sooner so your foot could have been
saved. How would you feel about your HMO then?
I firmly believe that the best medical care is ALWAYS the cheapest
Bob Ford
------------------------------
Date: Sat, 26 Apr 1997 08:52:13 -0400 (EDT)
From: ldignan@cmp.com
Subject: marriage tax penalties - How Can I Fight Them?
I've been reading up on the marriage tax penalty and was wondering if
there's anything you can do to prepare for it. I'll be getting married in
September and my fiance and I make about the same amount a year. We don't
own a home because we live just outside New York City. 1) We're not sure
we want to stay in the area, 2) Probably couldn't afford a house anyway.
That means a home deduction is out.
I've heard horror stories from some friends who say they owed a lot
because they got married. I also read a quick blurb about it the other
day in the Wall Street Journal.
My questions are: 1) Is this marriage tax penalty as severe as it sounds
2) Short of my fiance or I quitting our jobs, is there anything we can do
to prepare
3) Should we file jointly, or separately and does it matter.
Any help, or previous experiences would be appreciated,
thanks,
Larry
------------------------------
Date: Sat, 26 Apr 1997 08:52:59 -0400 (EDT)
From: ktjensen@juno.com
Subject: Precut Houses - DeGeorge Home Alliance or Miles Homes Service
Does anyone have any experiences good or bad with the company by the name
of DeGeorge Home Alliance (formerly called Miles Home Service)? I am
thinking of buying a precut house kit from them.
They have a financing service that requires only a very small downpayment
(10% on the land only). I will be the general contractor with their
guidance during the building process. I know there are many pitfalls to
this, but I would love to hear from someone who has gone through this
already.
Please forward this to anyone who you know has done this. Thanks in
advance for any responses.
Responses should be sent directly to me as well as posted to the persfin
list.
Kevin Jensen
------------------------------
Date: Sat, 26 Apr 1997 08:55:56 -0400 (EDT)
From: Gary Schwartz <gary@netcomuk.co.uk>
Subject: Early distribution from retirement account for House Down Payment?
Hi Persfiners,
I've seen a lot of good answers to good questions on this list,
and so I hope someone can provide good advice for my first
question to it.
My situation is as follows: I'm a US citizen, living in London.
At the moment, I'm barely making ends meet, paying what I consider
to be far too much on rent for a small one-bedroom flat (about
1000 pounds/month). If I were to purchase a similarly sized flat,
I could get a mortgage for about half to 60% of my rent.
However, I don't have the down payment readily available.
The amount required is available in my retirement accounts,
(an IRA and a Keogh), however. So I'm thinking that it might
make sense to take an early distribution on these accounts
and pay the penalty. Since I'll have no other income taxable
in the US (all of my UK income falls within the $70K
exclusion), I'll likely be liable only for the 10% penalty and
be in the 15% tax bracket. I'm thinking about a 10K pounds
down payment (about 16.5K dollars), which would mean about
a 5.5-6K dollar tax hit. As that's about 4K pounds, I'd make
up the difference within about 8 months, certainly within
a year.
My question to the group is, is there anything I'm failing
to consider here? And are there any other options that might
make more sense? (yeah, that's two questions :-)
Thanks very much in advance for any replies.
Regards,
gary
------------------------------
Date: Sat, 26 Apr 1997 08:57:07 -0400 (EDT)
From: "Jim Reed" <jreed1@airmail.net>
Subject: Has Iowa Dropped State Inheritance Taxes?
Hi....I heard recently some unverified information that the State of
Iowa had dropped (or were dropping) its state inheritance taxes.
I was wondering if someone might be able to verify this?
Thanks,
Jim, in Texas
jreed1@airmail.net
------------------------------
Date: Sat, 26 Apr 1997 08:57:55 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Re: Deducting term-life insurance premiums? Major Gotcha!
If you do deduct life insurance premiums or if any life insurance
premium is deductible from your before-tax earning, then the death
proceeds to your loved ones will be a taxable income.
Therefore, do not ever think of deducting such premiums - even the IRS
does not allow such deductions for personal reasons.
- --
Louis J. Schwarz, CFP, RFC TTY 301-587-5996
Schwarz Financial Concepts FAX 301-587-5997
814 Thayer Avenue, Suite 301 Voice Relay 800-735-2258
Silver Spring, Maryland 20910-4500 Mailto:sfc@deafcfp.com
------------------------------
Date: Sat, 26 Apr 1997 15:04:12 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Re: Best currency exchange rates - Charge Everything
Last winter when my wife and I spent a vacation in St Maarten/St.
Martin, I have discovered that using the credit card for either French
Francs or Dutch Guilders give me more realistic and lower U.S. $ rather
than for U.S. Dollars just because the merchants mark up roughly 10% to
be protected from the dollar flucutations. Therefore, whenever going on
Foreign land, it is adviseable to demand charges in their own currencies
to prevent them from taking advantages of making money on foreign
exchange.
- --
Louis J. Schwarz, CFP, RFC
Silver Spring, MD
------------------------------
Date: Sat, 26 Apr 1997 15:05:06 -0400 (EDT)
From: hrj@juno.com (Harold R Justice)
Subject: Re: Best Exchange Rates - Beware of Fine Print
I agree with other posters that the best exchange rate is with a Visa or
Mastercard. However, cash advances on most credit cards carry an
additional fee above the ATM transaction fee. I used a cash debit
card(Cirrus or Alert network) on a trip to Europe and avoided these extra
fees. However, I didn't read the fine print in my cash debit agreement
which limited me to getting $250 per day. I got about $200 one morning in
France and tried to get some more later that day in Austria and could not
use the card to get as much Austrian money as I needed. So be aware of
your daily limit.
Harold
------------------------------
Date: Sat, 26 Apr 1997 15:06:56 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Cash gifts for a disabled child ?
[Disclaimer: this is my opinion, not advice. I am not a professional.]
The problems of putting it in the kid's name are:
(1) The money legally belongs to the child. If the money is in a regular
savings account or CD, the kid could take the money out at any time.
If it is in an UGMA/UTMA, the kid has full title and control of the
assets when he turns 18 or 21 (depends on the state).
(2) And since the money legally belongs to the child, there is always the
chance (though admittedly not likely) that the child could later sue
if the parent used money in the child's account. If the money is held
in an UTMA/UGMA and money is removed for improper uses (and it is NOT
proper to use UGMA/UTMA money for necessities) the custodian could get
in trouble with the IRS as well as the kid.
(3) Under current finaid policy, only about 5.6% of parents' assets are
expected to be used, but about 35% of the child's assets are expected
to be used. If the money is in the kid's name, he'll be expected to
ante up 6 times more of it than if it was in his parents' name.
Now, you do get a tax break by having it in the kid's name (but not as
much as you used to). While the kid is under 14, the first $650 of
investment income is tax-free, the next $650 is taxed at 15%, and
anything else is taxed at the parents' bracket rate. So if the
parents are in the 28% bracket, putting the money in the kid's name
will save around $267/yr in taxes at most (though the amount saved
will rise with CPI as the two $650 amounts index upwards with
inflation). When the kid turns 14, he becomes a wholly separate
taxpayer in his own right and investment income past $1300 (indexed)
is no longer taxed at the parents' rate. In any case, over 18 years I
figure you might save $5000-$6000 in taxes which will immediately be
eaten up by the 33% vs. 5.6% finaid "tax", not to mention the issues
of control over the money.
In summary, then, I don't think putting serious money in the kid's
name is a good idea. However, I do think that getting him an
UGMA/UTMA in a mutual fund and putting *some* money in it *is* a good
idea, to help start him on the investment road (but have it be money
you really consider to be "his" that you are fully prepared to see him
do with as he pleases when he reaches the age of majority).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 26 Apr 1997 15:07:29 -0400 (EDT)
From: Somesh Rao <somesh@syl.nj.nec.com>
Subject: Re: On-line Banking and On-line Bill Payment?
Jim Yount has asked...
>I would appreciate feedback regarding people's personal experience with
>using the "On-line Features" of Quicken... both positive and negative.
I have been using this for about a couple of months and I love it.
I wonder how I did without this before. I have both the online
transactions and bill payment.
My book-keeping has been reduced to about 40% of what it was before.
Now, an hour a week and I am done.
No more check writing, mailing, writing it in the paper register,
then enter in the Quicken register.
No more calling the bank up to find out the transactions in my
account.
All of this happens in one phone call. I do not know the actual
number called, but it probably is an 800 (or local) number as I have not
seen anything on my phone bill.
Costwise, it costs about $5.40 for the online bill paying (upto
20 checks, more than that, it it $.50 per check). This is great
for me as I mail out less than 20 checks. So, the postage that
I would have paid for pays for this. The transactions on line
is about a couple of dollars. Also, the first three months
may be free at your bank (ask them!). It was free for me.
You can write checks to anyone, not necessarily to just
companies. In fact, the first online check that I wrote was
to our esteemed editor, and a week later, I had an email
conformation from him.
Oh, one more thing. One more on-line feature that I have used
in quicken is the stocks/mutual-fund price updates. This phone
number is in my area, but is not local and I have to pay a
price for it. This is quite nice for the first year since
it is free, but I do not plan to pay for this service when
the year ends.
Somesh
------------------------------
Date: Sat, 26 Apr 1997 15:08:35 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Paying off Debt?
>From: WRobinette@aol.com
>
>This brings up a question I have. Everyone on the list is just about in
>agreement about paying off credit card debt with liquid assets, but what
>about other debt like cars? What if someone owes $5000 on a car and has
>$8000 in the bank for example? This really hasn't been discussed in as much
>depth, and not too many of us are _completely_ debt free.
This discussion always goes this way -- which debt to pay
off first, and whether to prepay some of it off or not.
The standard answer is to always pay off your credit cards
first with the possible (depending on your point of view)
exception of building an emergency cash reserve first.
The next debt to look it is your car loan if you have one.
Finally, we look at your home mortgage.
Inevitably, the answer is, outside of the warm-fuzzy feeling
on gets from being debt-free, to look at the effective
rate of return on paying off the debt. If your credit
card is charging you 18% interest and that interest is
not tax deductible (as it is not!), you have to _earn_
at least 18% / (1 - tax-rate) to make a better return
elsewhere. Supposing you have a marginal tax-rate of
28%, you'd need to earn a pre-tax return of 25%, and
if you know a place to get that kind of return, please
let the list know!
Next is your car debt - again, you don't get the tax
break on the interest payments - suppose your car loan
is at, say, 9%. Do you know some investment which
will return 12.5%, pretty much guaranteed (any debt you
pay down is _guaranteed_ to reduce your interest costs
by that much!)? Again, if you do, please share!
When you get to your mortgage, the question is not
quite as obvious. Suppose you have an 8% mortgage,
and you pay no income taxes on the mortgage interest.
You only need to get a pre-tax income of 8% to beat
it. That's not _as_ difficult, though finding that
return _guaranteed_ may be.
>My personal feeling is pay off the credit cards, but not necessarily autos or
>other big ticket debts. My reasons are that the interest rates on these
>items are not much higher than what you might make in a money market (3-3.5%
>difference) and you can not always get your money back out in an emergency
>(as you can with a credit card). I would be interested in what others have
>to say.
The difference in return looks like a good bit more than 3%
to me on that car loan, but it depends on what loan rate
you negotiated. If you got a lower rate at time of
purchase in exchange for not getting cash back or a lower
price on the car, then prepaying that car loan will
effectivly be giving away that discount you negotiated.
My feeling is that one ought not borrow money to buy
anything which will not go up in value at least at
the rate at which you borrow. That leaves basically
three things for which to borrow money - a house,
an education, and a business. The only way I can
see a car fitting in is if it is necessary for the
business, or to get a job. (Oh, and as far as the
house goes, maybe the house won't go up in value
at the rate at which you pay the mortgage, but you
do get immediate use of it - which is quite valuable,
as otherwise you'd probabaly be paying rent!)
The question of whether you have enough emergency money
or not, of course, is separate. Regardless of the rate
of interest, that cushion is essential.
- --D
------------------------------
Date: Sat, 26 Apr 1997 15:10:38 -0400 (EDT)
From: "Peter Palma" <rpalma@msai.mea.com>
Subject: Currency exchange rate & potential credit card problems
You can get a good exchange rate using credit cards because the
transaction goes through the banks without "middlemen" taking
fees, but:
With cash advances, most credit cards start charging interest right
away. This isn't good if you're out of the country for months at
a time.
When I was out of the country for a few months, I "prepaid" several
thousand dollars on my credit card so I already had the bills covered as
they came due. The credit card company wasn't happy about it, but there
was nothing they could do.
Second problem: you can pay for a hotel stay on June 9th when the
exchange rate is 10x to the dollar. The bill is 1000x so you think
the stay is costing you $100. If the hotel holds the credit
card charge until June 27th when the exchange rate is 5x to the dollar,
you just payed $200 for the stay and won't know it until you get
the credit card bill. That's an extreme example but rates do fluctuate.
I did frequently have bills posted to my credit card account a month
after I charges something.
Another problem is many places in other countries don't accept credit cards.
Japan, for example, is a mostly cash society. Other countries sometimes
only accept one type of credit card. A restaurant in France may take
Visa but not Mastercard. No has ever heard of Discover or American Express
in most places.
Often, the places that do accept credit cards are expensive (catering to
businessmen on expense accounts) or set up for tourists. You'd
miss many interesting travel experiences if you only
shopped/ate/stayed at places that take credit cards.
Another way to get a good rate is to use an ATM machine. Cirrus is a
worldwide network. You take cash directly from your bank account at
home so you know the exchange rate immediately and there aren't any
interest charges. You just have to find an ATM and be able to go through
the menus in a foreign language =-).
Taking $1 bills is pointless unless you're going somewhere like China
where the currency is controlled (and it's illegal to "exchange" money
on the street there).
No one will exchange $1 bills. Most places have a minimum limit of $50
or $100 and they only exchange round numbers.
Peter Palma
rpalma@msai.mea.com
------------------------------
Date: Sat, 26 Apr 1997 15:11:24 -0400 (EDT)
From: "rip west" <rip@montrose.net>
Subject: re:Deducting term-life insurance premiums
Jeff Salisbury said......
<<
Does anyone know if term life insurance premiums are deductable on income
taxes? If so, where on Sched A?
<<
Term life (and whole life, for that matter) are not deductible on your
individual income tax return.
rip
------------------------------
Date: Sat, 26 Apr 1997 15:13:26 -0400 (EDT)
From: "rip west" <rip@montrose.net>
Subject: re:investment clubs
A recent post said.....
<<
Anybody belong to an investment club? If so, how did it work out? Was it
a lot of work? Did everybody agree on which stocks to buy?
>>
Investment clubs can be very helpful. There are some great success stories,
the Beardstown Ladies being only one example. Sorry, I can't tell you that
they do not involve work. Successful investing does require time.
I wouldn't even consider starting an Investment Club without checking with
NAIC (National Association of Investors Corporation). The tools and
principles of this organization have benefited many starting clubs. You can
reach them at http://www.better-investing.org.
rip
------------------------------
Date: Sat, 26 Apr 1997 15:14:02 -0400 (EDT)
From: "rip west" <rip@montrose.net>
Subject: On-line Banking and On-line Bill Payment
Jim Yount said.....
<<
I currently use Quicken 6 for Windows to keep track of my personal
finances. I've never used the On-line Banking or On-line Bill Payment
features, but I'm considering setting them up.
I would appreciate feedback regarding people's personal experience with
using the "On-line Features" of Quicken... both positive and negative.
>>
I use On-line banking and on-line bill payment and am wildly enthusiastic
about both. I set up my online account with CoreStates, mainly because they
were absolutely free for both checking charges and online bill paying. To
obtain free checking I did have to maintain a minimum balance (I think
1,000)
When bills come in, I enter them, put down the date I want them paid, and
forget them. I can see at anytime what checks and deposits have cleared the
bank. The checks prepared by the bank are attractive and professional. I
use online payments for everything including vendors that I am convinced I
will never use again. The ease of it is just so much easier than writing a
check, addressing an envelope, putting the stamp on, and recording the
transaction.
Any specific questions, let me know.
rip
------------------------------
Date: Sat, 26 Apr 1997 15:15:26 -0400 (EDT)
From: Jonathan Corbet <corbet@stout.atd.ucar.edu>
Subject: Re: Best currency exchange rates - Charge Everything
> (Editor's Question - How about taking a stash of $1 bills? That way, if
> you have to exchange money (and you'll need to do that for things like bus
> fare), you won't have to exchange too much in local currency - unless, of
> course that currency is stronger than the dollar - but then you'll still
> loss on the exchange back. -IK)
Ah...but there is almost always a per-exchange commission. Exchanging
small amounts of money is almost never a good idea.
I agree that charging is the right way to go in most countries -- but be
careful in small, unstable places with variable or bogus exchange rates.
In Nicaragua in the mid-80's the official exchange rate was around 25
Cordobas/dollar; at the bank we got around 600. In a situation like that
you don't want to risk seeing what the credit card folks might do to you.
A variant on this: it's increasingly easy to find ATM's in other countries
that accept US-style (i.e. "Plus" or "Cirrus") cards. Using these, you can
easily pull as much cash as you need anytime. Don't count on the machines
being there unless you know for sure, but chances are good you can find
them. I believe the banks can tell you where the machines would be. I've
made heavy use of ATM's in Ireland, France, and Australia.
jon
Jonathan Corbet
National Center for Atmospheric Research, Atmospheric Technology Division
corbet@stout.atd.ucar.edu http://www.atd.ucar.edu/rdp/jmc.html
------------------------------
Date: Sat, 26 Apr 1997 15:16:06 -0400 (EDT)
From: Mirin Lew <mirin@scmkt.sr.hp.com>
Subject: Investment Clubs - My Experiences
>Anybody belong to an investment club? If so, how did it work out? Was it a
>lot of work? Did everybody agree on which stocks to buy?
I belong to a club at work which just turned a year old. So far it's been
pretty good, although we've only bought 3 stocks. We have a stock selection
committee, and it's their job to recommend the next stock. There is a
new committee every time we make a purchase to spread the work around,
although there may be carry-over members to keep some continuity if people
don't mind. Anyway, a committee typically takes about 3 meetings (1/month)
to recommend something. We're long-term investors, not timers. The whole
club votes to accept or reject the committee's recommendation, so that's
how we decide what to buy.
Mirin Lew
------------------------------
Date: Sat, 26 Apr 1997 15:16:48 -0400 (EDT)
From: Nikhil Subhash Sarpotdar <nikhil@mozart.ee.umn.edu>
Subject: Variable Adjustable life Insurance....
Hi!!
Hope every one is doing great.
I had a question about Variable Adjustable Life Insurance. One of my
acquaintances said that it is a very good investment since it grows tax
free and all the withdrwals are tax free. Moreover unlike a typical
insurance policy you are allowed to invest your money in various
aggressive investamenst like mutual funds etc.
So in effect it becomes something SIMILAR to a 401(k) except
that there are no taxes at withdrawal and also has higher fees due to
death benefits of the insurance. This is my understanding.
I was wondering if you people had any thoughts on this subject.
I would appreciate any commenst or maybe any pointers towards URL on
this subject etc.
Thanks
Nikhil
------------------------------
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