Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #29
Date: Mon, 28 Apr 1997 21:13:21 -0400 (EDT)
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persfin-digest Monday, April 28 1997 Volume 04 : Number 029
IN THIS ISSUE:
ADVERTISEMENT: LAN ACCESS TO MCI MAIL [Oppenheimer Software <Connect-Sal]
Persfin Digest Archives! [amstk@hamster.slip.net (amstk@slip.net)]
Re: Currency exchange rate & potential credit card problems [kahless@ns.w]
Second-to-die Term Life Insurance? ["Jim Reed" <jreed1@airmail.net>]
Re: Early distribution from retirement account for House Down Payment? []
Re: marriage tax penalties - How Can I Fight Them? [Rich Carreiro <rlcarr]
ATMs in other countries ["Mark Hamann" <hamann@myk.ilc.or.jp>]
Variable Adjustable life Insurance.... ["Cal Lester C.L.U." <Cal_Lester]
the moderate marriage penalty / Pay Down Your Credit Card Debt! [William ]
long-term care insurance for near-seniors [William Jones <bill.and.ginny@]
Re: Online Banking with Quicken [colston@viagrafix.com (Lloyd Colston)]
exchanging foreign currency [David Martin <dmartin@seabreeze.hc.ti.com>]
NJ taxes [David Martin <dmartin@seabreeze.hc.ti.com>]
Re: Paying off debt [ktjensen@juno.com]
Best currency exchange rates - Charge Everything [Tony_Babb@notes.pw.com]
Investment Clubs - Our Experience [mabrams@santafe.cc.fl.us]
Re: On-line Banking and On-line Bill Pay [agray@acceltech.com (Andy Gray)]
Re: Becoming a Good Bank Customer ["Mr. Brown" <sbrown@getonthe.net>]
Re: Paying off "big ticket" items with cash? [johnel@ix.netcom.com]
NJ state income tax and property tax [BOB FORD <BOB_FORD@compuserve.com>]
Re: Paying off debt [BOB FORD <BOB_FORD@compuserve.com>]
re: online banking & bill paymrent [Randy Barnes <rbarnes@atl.mindspring.]
Re: Books as deductible expenses? [Scott Barnett <sab@newton.crisp.net>]
Re: marriage tax penalties - How Can I Fight Them? [Avrum Lapin <avrum113]
Re: Major Caveat In Using Charge Cards ["Narasimhan, Seshadri" <Narasimha]
College money in minor's name... [Jon King <kingjo@CS.ORST.EDU>]
Phone bill question + a complex divorce question [CHRISTY_ROHRIG@hp-santa]
Re: How and where to get the best currency exchange rate? [energo@fwai.or]
Tax breaks for renting one room [Kurt Nosack <KNOSACK@novell.com>]
Re: marriage tax penalties - How Can I Fight Them? [jimm@hi.com (Jim McGr]
Re: HMO's, insurance [David Martin <dmartin@seabreeze.hc.ti.com>]
Social Sec OVerpayment ["David F. Cameron" <dcameron@stu.harper.cc.il.us>]
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Date: Mon, 28 Apr 1997 20:06:21 -0400 (EDT)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: LAN ACCESS TO MCI MAIL
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------------------------------
Date: Mon, 28 Apr 1997 20:09:20 -0400 (EDT)
From: amstk@hamster.slip.net (amstk@slip.net)
Subject: Persfin Digest Archives!
The Ameristock Mutual Fund is pleased to announce the birth of the Persfin
Digest Archives!
Each issue of Ira's Persfin Digest since Feb 20, 1997 to today is being
archived AND indexed at:
http://www.ameristock.com/
or
http://www.ameristock.com/pda/persfin_home.htm
Look up any topic discussed by subject for now and by author in the future.
Please let me know what you think or how this FREE service can be improved.
Ira, please add a link to this service and let your readers know about it.
Thank you.
- - Nicholas Gerber, Portfolio Manager
Ameristock Mutual Fund
(Editor's Comment: I'm pleased to announce the availability of the
archives. This will be a welcome addition to Persfin-Digest. Thanks,
Nicholas! -Ira)
------------------------------
Date: Mon, 28 Apr 1997 20:23:42 -0400 (EDT)
From: kahless@ns.waymark.net
Subject: Re: Currency exchange rate & potential credit card problems
Peter said this about getting a good exchange rate using credit cards:
>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.
I'm curious. How did the credit card company express their
displeasure at your sending them money that wasn't owed
(yet)? How can this be a negative to them considering that
they can now earn interest from your money until you actually
spend/charge on the card. I've done this twice in the past
year with not even a peep out of the credit card companies,
even though several thousands of dollars were involved at
one point. In fact, I negotiated the removal of the yearly dues/
fees by pointing out their income potential should I continue
to send them money they haven't yet earned.
Sam
I wonder if people just forget that the card holder is the
income generator for the credit card company. This is
a distinct advantage in any negotiations necessary.
------------------------------
Date: Mon, 28 Apr 1997 20:35:08 -0400 (EDT)
From: "Jim Reed" <jreed1@airmail.net>
Subject: Second-to-die Term Life Insurance?
Hi, I've been studying the pro's and con's of term life insurance as it
pertains to my particular situation.
>From what I've found out, term life insurance of the second-to-die type is a product that does not appear to be available from any insurance company..
With all the various insurance products available, it would appear that
some insurance company would be interested in offering a term life
product that would only pay when both husband and wife dies.
This would appear to be a good product for some couples in certain
situations where term life was not needed at first death but, a second
death, it was needed to pay taxes.
Can anyone offer any enlightment on this?
Kindest regards,
Jim, in Texas
jreed1@airmail.net
(Editor's Comment (not an estate planning professional): For people with
estates above $1.2 million, second-to-die life insurance is a way of
using both spouse's $600,000 estate tax exemption, in conjunction with a
testamentary trust.
Without this insurance, say the husband dies. The wife gets everything
with no estate tax (unlimited tax free transfer to spouse). When the wife
dies, only $600K of the estate is shielded from estate tax. The husband's
$600K deduction is gone.
If instead the husband had set up, in his will, a trust (I believe it's
called a "credit trust") which is established on his death and funded with
a second to die life insurance policy with a death benefit of $600K and
the children as beneficiaries. When the wife dies, the children receive
the $600K with no estate tax. There's also no income tax on the $600K
because it's a life insurance distribution.
The wife should have the same provision in her will, since you can't
predict who will die first.
OK, I'm not an estate planner, but I've read innumerable discussions of
this and have gotten confused any number of times. How close did I get?
- -IK)
------------------------------
Date: Mon, 28 Apr 1997 20:35:45 -0400 (EDT)
From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: Re: Early distribution from retirement account for House Down Payment?
> ......................
> 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
> ..................
Are you sure you will be in the 15% tax bracket? By that, I mean it is
possible that the applicable tax bracket is the marginal tax bracket on
your worldwide income -- even though you don't have to pay tax on the
foreign EARNED income (up to $70K)
Lily Chen
am302@freenet.buffalo.edu
------------------------------
Date: Mon, 28 Apr 1997 20:36:24 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: marriage tax penalties - How Can I Fight Them?
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>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
Depends what you mean by the "marriage tax penalty." If you mean being
massive underwithheld in the year of marriage because of the increased
tax liability, then both of you should submit new W-4 forms to adjust
your withholding to make up for this.
If you mean that in many two-income marriages the total income tax is
more than it was than the combined tax on the two spouses when they
were single, even though nothing else changes, then there's nothing
you can do about it (other than to scream at your congresscritter to
fix it).
>My questions are: 1) Is this marriage tax penalty as severe as it sounds
It depends. In fact, if you and your wife earn widely disparate
amounts of money, you'll probably pay less in total income tax than
you did when single.
>2) Short of my fiance or I quitting our jobs, is there anything we can do
>to prepare
Other than to adjust yor withholdings so you aren't hit with an
underwithholding penalty, there's not really anything you can do.
>3) Should we file jointly, or separately and does it matter.
For most people, filing separately would in fact increase your taxes
even further. Separately is usually a win when one spouse has a lot
of itemized deductions relative to that spouse's income. The only
real way to know what's better for you is to do your taxes both ways
and see which way leads to lower taxes.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 28 Apr 1997 20:37:26 -0400 (EDT)
From: "Mark Hamann" <hamann@myk.ilc.or.jp>
Subject: ATMs in other countries
I have some experience using ATMs in another country. I lived off an ATM
card in Japan for 6 months.
First, you may be able to get a list of ATM locations from your bank. My
bank gave me a Cirrus list with every world-wide ATM at that time.
Next, you can increase the daily minimum that you can withdraw. My bank
originally said that the limit was fixed for my own protection, but when I
said I will have to open another account and get another ATM card they
admitted that the limit is changeable and set it higher. This can be
especially important when the machine dispenses only large bills. At 100.5
yen to the dollar, two 10000 yen bills cost about $199. At 99.5 yen to the
dollar, two 10000 bills cost $201. If your limit is $200 as mine was, and
the machine only dispenses 10000 yen bills as mine did, the amount you can
withdraw goes from 20000 yen to 10000 yen when the yen dollar rate goes
from 100.1 to 99.9.
Finally, be aware that the machines may not accessible when you think they
are. In Japan, ATM's are still mostly only found in banks and department
stores. The ATM's in banks stay open a little bit longer than the banks
themselves, but not very much longer. The machines in department stores
sometime stop working before the store closes. Also Japanese department
stores often have a day of the week that they are closed, so it makes
planning a bit more difficult for the tourist. It isn't as simple as
deciding to stop at the Takashimaya Department in Kyoto on Wednesday for
cash, because you don't know what day of the week Takashimaya is closed.
Though you can reasonably sure that it is a Tueday, Wednesday,or Thursday.
People in the Unites States are lucky that 24 hour ATM's are found all
over. Japan has ATM's that count the coins you deposit, iron the paper
money you deposit, and let you deposit money into other people's bank
accounts, but they are harder to find, open late, close early, and may not
open at all.
Mark Hamann
------------------------------
Date: Mon, 28 Apr 1997 20:38:51 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@msn.com>
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 withdrawals are tax free.
>>>> Variable Adjustable (Variable Universal) Life is NOT, and I repeat
NOT an investment vehicle. It is designed to provide a Life Insurance
Death benefit for the beneficiaries of the insured. It does offer, as does
ANY Life Insurance policy, a Tax Deferred growth of the Cash Value Account
( NOT TAX FREE), and under current IRS Reg's, Withdrawals, up to basis,
are Income Tax Free, as long as the policy has NOT inadvertently become an
M.E.C. policy. Any withdrawal over and above the amount paid in , to date,
in premium, is Income Taxable.
Moreover unlike a typical insurance policy you are allowed to invest your
money in various aggressive investments like mutual funds etc.
>>>> True, in most Variable Life policies, the Insured is given the
opportunity to direct the investment of the Cash value Account, in one or more
of " a basket of mutual funds" or a fixed interest account. However in doing
so, the Insured then assumes the full responsibility for the value of that
account. If his/her investment choices do not pan out, then there will NOT be
a sufficient amount in the account to support the policy, which would then
require that he/she put in more premium to maintain the policy.
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.
>>>> No it is NOTHING like a 401K, it IS a Life Insurance policy, with
"generally" much higher overall costs involved than other types of Life
Insurance. It should only be purchased IF you NEED additional Life
Insurance. True it does offer much more potential gain, but do not ignore the
increased risk on your part, as well as the possibilities of loss. Remember,
only those withdrawals "up to basis" will be income tax free. ALL withdrawals
after that point ( until it becomes a Death Claim) will be 100$ Income
Taxable.
Cal Lester CLU
Insurance Course CoOrdinator
Broward Community College
------------------------------
Date: Mon, 28 Apr 1997 20:40:04 -0400 (EDT)
From: William Jones <bill.and.ginny@worldnet.att.net>
Subject: the moderate marriage penalty / Pay Down Your Credit Card Debt!
Larry asked, "Is this marriage tax penalty as severe as it sounds?" The
answer is generally NO. Its worst effect is when both incomes are about the
same. It can be determined by looking at the 1040 tax tables for $5900 less
than the common income (AGI), comparing the single column with the married
filing separately column. If each has an income of $25,950 or less, the
penalty is $98 each (15% of the $650 difference in standard deduction). If
each has an income of between $30,000 and $54,000, the marriage penalty is
only $612 each (28% of the $3950 difference between the 15/28 border, plus
the $98). For other incomes in the high 20's, the marriage penalty is
between those two figures. Schedules X and Y-2 make this difference clear.
Although I personally feel that this marriage penalty is quite unfair, it
is not onerous. And other benefits that accrue to married couples as
opposed to unmarried couples, such as health insurance through the employer,
social security benefits, and the highly valuable spousal exemption from
estate tax, tend to cancel it out. Besides, if the two salaries are very
different, the marriage tax penalty becomes a marriage tax bonus.
If we assume that Congress makes tax laws to encourage certain behaviors
(such as IRAs to encourage retirement savings), then clearly Congress is
saying to people with roughly equal incomes and adequate health insurance on
the job, "Live in sin until you are ready to have kids, then one of you
reduce your working hours to get the marriage tax bonus".
David Martin says a person should not pay off a credit card with emergency
assets. I disagree. If I experience a sudden necessity to buy something
for $3,000, I figure that is what the emergency cushion is for. So I use
the cushion for it instead of letting it ride on the credit card. Of
course, I immediately begin building up the emergency cushion again.
Emergency cushions are for emergencies in general, not only in case one
loses one's job. Most anyone who consistently carries a balance on a credit
card is either financially incompetent or experiencing an emergency.
------------------------------
Date: Mon, 28 Apr 1997 20:40:53 -0400 (EDT)
From: William Jones <bill.and.ginny@worldnet.att.net>
Subject: long-term care insurance for near-seniors
I have a question that I hope someone can answer. I am considering buying
long-term care insurance. The level annual premius for the coverage I want
($109,500) is $382 at my current age of 53. Or I could wait 1 year and get
the same coverage for $409 annually; or $436 at age 55; or $612 at age 60;
or $877 at age 65; etc. My question is, should I buy now or wait?
I developed the following analysis, with which I can see nothing wrong,
but I would appreciate constructive criticism. The cost at age 53 is one
30-year T-note costing $7579 and paying 7%, which is 5.04% after tax, which
is $392. I would then use the interest to pay the premiums. When I die or
otherwise cancel the policy, I get the $7778 principal back (plus or minus
interest fluctuations).
The cost at age 54 is $409/(7%*.28) = one T-note costing $8115 next year.
The present value of this is more than the age-53 policy: I can buy my
$7579 T-note now, which will give $392 in after-tax interest by next year at
this time, which is only $7971, so it will cost me $144 additional to wait
one year (actually only $137 extra in present value).
But, you say, this way of comparing costs leaves out some factors! Yes,
it does. (1) I might die in the next year (0.5% probability), in which case
I cancel the insurance and I am out only $382 by buying now. (2) I might
need long-term care in the next year, in which case I am piles ahead by
buying now. (3) My health, though good now, might deteriorate in the next
year to where I cannot get long-term insurance, in which case I am well
ahead by buying now.
I figure that the chance of coming out ahead (case (2) or (3)) is about
the same as the chance of coming out behind (case (1)) and the payoff is
much better when I come out ahead (tens of thousands instead of $382), so I
should buy long-term insurance now. Also, the annual premium jumps by 7 to
8% for every year I wait up until age 67, which is more than the 5% annual
after-tax increase in value of a T-note with reinvestment.
Unfortunately, this contradicts the advice I have read in several
sources, saying to wait until your mid-sixties. So what have I missed?
Note: don't bother to tell me I should get a higher face value or get
inflation protection; that question is separate (the pluses and minuses for
buying it now or later are relatively the same).
from: Bill Jones, bill.and.ginny@worldnet.att.net
------------------------------
Date: Mon, 28 Apr 1997 20:46:35 -0400 (EDT)
From: colston@viagrafix.com (Lloyd Colston)
Subject: Re: Online Banking with Quicken
I use Checkfree with Quicken and like it.
Sometimes the technology does not work but Checkfree bends over backwards to
help when it is their fault. Most of the time, it is not their fault but
rather the vendor to whom you wish the payment to go.
I can recommend them. If you need further information about their service,
please call 800 297 3180
Lloyd Colston
Pryor, OK USA
Internet business group: http://www.isbc.com
Services for small and home business
http://www.viagrafix.com/colston/comm.htm
------------------------------
Date: Mon, 28 Apr 1997 20:47:31 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: exchanging foreign currency
> (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)
Usually, it is best to exchange all of your money at once
because there is usually a fee per exchange. Also, if you carry a lot
of American currency, it is that much easier to have it stolen.
I usually get all of my foreign currency through my local bank
ahead of time. That way, I have what I need the moment the plane
touches down. I always take more than I think I will need, and when I
leave, anything I didn't spend is used towards the hotel bill (but
don't forget to take enough to get to the airport!). That way, I only
get hit one way on the currency transaction. I usually save a few
coins for emergency bus fare, pay phones, etc. These make good gifts
for young cousins, children, etc.
Of course, as George pointed out, use a credit card as much as
possible. But verify that you can use the credit card _before_
purchasing the service/item. In some countries, the Mastercard/VISA
logos are nice pictures, not indications of how you can pay.
In some countries, people actually prefer US dollars over the
local currency. If you go to such a country, you might not even need
to exchange currency. Of course, you will probably be charged the
"rich American tourist" price rather than the local price.
-David Martin
------------------------------
Date: Mon, 28 Apr 1997 20:47:56 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: NJ taxes
Bob asked:
>Could anyone tell me what the state income tax rate is in NJ? Also, is
>there a personal property tax on cars?
There is a 6% sales tax when you buy a car in NJ. There may be
a fee to pay of you bring in a car from out of state. I haven't had my
car in NJ for more than a year, but I think they charge you a fee each
time you register it that is proportional to the car's weight. I
believe it is usually on the order of $30 or so.
NJ has a graduated income tax. For a single person, it is 1.4%
of anything under $20,000; 1.75% of the next $15,000, 3.5% of the next
$5,000; 5.525% of the next $35,000; and 6.37% of the anything over
$75,000. There are almost no deductions allowed. For most people, the
effective tax rate is fairly low compared to other states in the
region. (like MA, where I used to live.) There is a disability
insurance tax which maxes out at about $112 per year. NJ taxes all
sorts of income the same; capital gains are taxed the same as regular
income.
You can get all of the NJ forms through the
http://www.1040.com/ web site.
-David Martin
------------------------------
Date: Mon, 28 Apr 1997 20:48:43 -0400 (EDT)
From: ktjensen@juno.com
Subject: Re: Paying off debt
You are doing fine. You need an emergency fund no matter what debt you
have. That is the first priority!! I have heard three moonths of
salary. Well on a $30 to $40,000
job that is around $9000.
Here are some better what ifs:
1. You get into a car accident and cannot work
2. Your house or neighborhood is in some naturel disaster.
3. (Most Likely) Your car is totalled or has a major engine
problem.
Good Luck.
------------------------------
Date: Mon, 28 Apr 1997 20:50:22 -0400 (EDT)
From: Tony_Babb@notes.pw.com
Subject: Best currency exchange rates - Charge Everything
When travelling abroad I charge major items (hotels, restaurants, car
rental etc) but for cash (which you need for taxis, tips, etc) I use my
ATM card. I get a better exchange rate than at a currency exchange shop.
You are charged the same fee that you would be charged for using it at
another (not your own) bank in the US and so far they don't add any
additional fees for the bank that owns the machine.
You may want to check with the network (Plus, Cirrus etc) that is on your card
to see that they have machines in the country you're visiting. FYI I've used
mine in Australia, Hong Kong, Canada, UK, Denmark, Holland, Guatemala and
probably some others I've forgotten. Only had one problem when 400 Quetzals was
charged as US$400 but I kept the receipt and the error was quickly fixed.
(Trivia question Where is the Quetzal used and what is a Quetzal?). I
have also found a couple of machines in Mexico City with the Plus symbol
but they wouldn't give me any cash - I don't know why.
Also, take a few $1 bills as in many countries(especially developing
countries) people are willing( and sometimes prefer) to take them as tips
and also for taxi fares.
Be careful when you pay in dollars and they give you change in local currency.
To reduce rip-offs in Mexico City they have introduced a system where you buy a
ticket at the airport for a taxi ride downtown(about $10 I think). I gave a
US$20 bill and received change in pesos. I checked the change and discovered he
had used an exchange rate of 5 pesos to the dollar (the exchange rate was not
posted anywhere in sight and is currently almost 8 pesos to the dollar). When I
complained he gave me the rest of my change - this exact same incident has
happened on my last two visits to Mexico City. The moral - know the exchange
rate of the country you're going to before you get there and calculate
approximately how much change you expect to get when doing one of these
multi-currency transactions.
------------------------------
Date: Mon, 28 Apr 1997 20:51:26 -0400 (EDT)
From: mabrams@santafe.cc.fl.us
Subject: Investment Clubs - Our Experience
(MoneySecre@aol.com wanted to know about investment clubs.)
Our investment club was established by following NAIC (National
Assn. of Investment Club) guidelines. They have the process
down pat after about 40 years experience. We're in our 3rd
year, our portfolio value has doubled, and its working out
very well. Yes, it's a lot of work to get started...at least
more than I anticipated. This is partially due to the fact that
you will be establishing a legal partnership. With one exception,
we've had a unanimous decision on every stock we bought. The
exception was on an animal rights issue but one member. Its'
a great learning experience and builds confidence to buy
stocks. Do it! Marjorie.Abrams@Santafe.cc.fl.us
------------------------------
Date: Mon, 28 Apr 1997 20:52:00 -0400 (EDT)
From: agray@acceltech.com (Andy Gray)
Subject: Re: On-line Banking and On-line Bill Pay
Jim Yount <jimyount@ix.netcom.com> wrote:
>I would appreciate feedback regarding people's personal experience with
>using the "On-line Features" of Quicken... both positive and negative.
My experience has been mostly positive. For me, Online Banking has a lot
more value than I originally gave it credit for. I still enter all of my
transactions myself, but the Online Banking is a nice double-check, and
reconciling the checking account monthly literally becomes a 30-second
operation, since checks are marked cleared as the bank clears them,
instead of in a big batch by hand when the statement arrives in the mail.
You have the opportunity to compare the transactions that bank clears
with your register and resolve any discrepancies. It's also nice to be
able to transfer money between accounts directly from Quicken, and you
can easily know your account balance on any given day.
The Online Bill Payment is a big time saver for me. Now when I receive a
bill in the mail, I simply enter it in Quicken, schedule it for the due
date, and it's taken care of. I also set up recurring payments (like the
mortgage payment) as repeating online payments, so they happen
automatically each month. I haven't had any problems with payments not
being received or the like. I wish that Online Payment didn't cost $5
per month, but I probably save about that in stamps each month, so it's
essentially a free convenience.
I have had a couple of problems with payments being rejected because of
"bad account numbers" (even though they had worked correctly for the
previous several months). It turns out that ISC (the payment
clearinghouse) had tightened up their requirements so that account
numbers could not include dashes or spaces, but hadn't publicized that
fact; after I removed the dashes and spaces, everything was fine. I also
a few problems connecting to their server a few months ago (apparently
due to high demand), but haven't recently.
All in all, the online features make Quicken quite a bit more valuable to
me.
-- Andy
------------------------------
Date: Mon, 28 Apr 1997 20:52:56 -0400 (EDT)
From: "Mr. Brown" <sbrown@getonthe.net>
Subject: Re: Becoming a Good Bank Customer
>Now we are earning much more interest, still pay no fees at all, and he
>didn't lose any money. Maybe banks are becoming more responsive???
>
>Peter
>
>(Editor's Comment - Would the rep have done that without your threat? -IK)
NO. And also when your CD comes due (3mo 6mo 1yr.) you will have to make
more threats or it will roll over to the reg.% at that time. One more thing
you have to remember to do at the end of each term. The next time or the
next person might not bump % up. Kind of a hassle the way I see it. S.E.
Brown
------------------------------
Date: Mon, 28 Apr 1997 20:54:15 -0400 (EDT)
From: johnel@ix.netcom.com
Subject: Re: Paying off "big ticket" items with cash?
Jim Robinette posed the question:
>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.
>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).
My answer is another question: If you had an emergency need for the cash,
wouldn't the car payment represent an extra burden of liability? Whether you
are strapped for cash or not, the finance company expects your timely payment
or you may get a visit from the repo-fairy (depending on where financing was
obtained).
Second point: Why ever finance a car? My sage advice (FWIW) is to keep the car
you are paying off long after it is paid for, while continuing to make payments
to your own savings investment (earn interest instead of paying interest).
Then, 3 or 4 or 5 years after your car was paid off, go buy whatever you want
(and can afford) and proudly pay cash. If you can make the payments now, why
not pay yourself later?
The *only* items worth financing, IMHO, would be college education and house.
Education is an investment into one's future, and few people could pay cash for
a house. A car is *not* an investment; it is guaranteed (except for the rare
exception) to lose value.
The key to successfully managing personal finances is to consistently live on
less than you earn, and invest the difference for the long term where it can
accrue the greatest appreciation. *Not* financing your cars is one facet of
that strategy.
If you are strictly interested in the numbers, you would have to assess what,
historically, your investments have earned in the past years, and use that as a
(somewhat risky, perhaps) gauge of what you might expect them to earn in the
next few years. The difference between that and the rate you will pay as a
borrower would determine how much you might save one way or the other.
The Big Caveat is that generally speaking, the higher the return in the long
run, the more price fluctuation (volatility) you may experience in the short
run. Personally, I prefer hypothetically earning the guaranteed 7-10% (?)
short-term return I get by *not* financing my vehicle.
As usual, your mileage may vary, and past performance is no guarantee of future
return.
John Leipold
------------------------------
Date: Mon, 28 Apr 1997 20:55:08 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: NJ state income tax and property tax
My information on NJ taxes is about a year old.
Income tax ranges from 1.9 percent to 6.65 percent depending on income.
1.9 percent for the first $20,000
2.375 percent for the next $30,000
3.325 for the next $20,000
4.75 for the next $10,000
6.175 for the next $70,000
6.65 for all over $150,000
Personal property tax on cars is usually about $80 per year depending on
the car.
BOB FORD
------------------------------
Date: Mon, 28 Apr 1997 20:55:58 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Re: Paying off debt
Jim
The general rule on all investments is go for the highest return on your
money. First we must assume the money is not your emergency cash that you
may need fast sometime. It is money you want to invest.
Paying off a 10 percent debt is investing your money at 10 percent. You
have to consider taxes to get the real percent in some investments and
some debt (home mortgage interest for example). If you can earn 9 percent
after taxes on an investment or pay off an 8 percent debt, take the
investment.
BOB FORD
------------------------------
Date: Mon, 28 Apr 1997 20:56:41 -0400 (EDT)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: re: online banking & bill paymrent
Greetings all,
I really love paying bills online and want to share my experiences. I
should let you know that I really hate banks. They generally offer the
worst customer service of any business I can think of. NationsBank is
the worst I've ever dealt with and a little over a year ago I decided to
move my account and find someplace less expensive and odious.
By coincidence my ISP had a special promotion with a new bank and was
offering a credit for anyone opening an account. I checked it out, and
liked what I saw. The bank is Security First Network Bank (SFNB). They
are the world's first Internet bank, and are always open. They opened a
branch in Atlanta this year (their HQ) but I think that's only because
the office building they are in had a closed bank branch on the ground
floor. Don't look for any more physical branches to open anywhere.
Anyway, SFNB offers totally free bill paying, up to 20 per month! They
have friendly helpful reps by phone 24 hours a day, 7 days a week.
(Their deposit envelope's are postage paid too!) Kiplinger's has them at
the highest money market rate in the country, and I know for a fact
they've got the lowest equity-line around (Prime+0). Their fees are the
lowest and rates are the highest. Even if you have no interest in
opening an account you should check out their site at
http://www.sfnb.com - They are publicly traded and the major players
(J.P.Morgan etc..)own major positions.
BTW, there is no software needed to deal with them as all access is via
the web. They have the best and most secure connection in the biz. I
find it very easy to use. This is also supposedly easy to merge into
Quicken, but I've never tried, as I no longer use Quicken. Everything I
want is available on line. They developed the software and market this
to other banks. Wachovia just announced they'd be buying and using the
SFNB technology after studying everything in the market.
I suggest you do what I did and open a checking account with a small
deposit, and see if it works for you. I use their ATM card and checking
account with no hassle at all. I'm a very happy customer and hope to see
companies like this take a large chunk of business away from the
"super-banks".
Info: SFNB 24hr (800)-SFNB321
------------------------------
Date: Mon, 28 Apr 1997 20:58:04 -0400 (EDT)
From: Scott Barnett <sab@newton.crisp.net>
Subject: Re: Books as deductible expenses?
>My tax clients asked me similar situations - my simple advice is to
>establish your own business as a sideline - making some money to show
>the profit motives - then you can deduct all related expenses, including
>books, rather than subject to the need of Form 1040 Schedule A Itemized
>Deductions or to the 2% limitation of Adjusted Gross Income. Just
>beware of additional self-employed FICA/Medicare expenses if there is a
>substantial net business profits.
>
Louis,
Isn't there also a rule about having to make a certain amount
of money or the IRS views your business as a hobby? I'd be
concerned about telling someone (as this person's friend did) to
just slap up a home page on the Internet and say you're in business.
You have to anticipate making at least some money!
- --
Scott Barnett
sab@crisp.net
------------------------------
Date: Mon, 28 Apr 1997 20:58:33 -0400 (EDT)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: marriage tax penalties - How Can I Fight Them?
Filing Separate is almost always more expensive than filing jointly.
For a couple each earning about $50K/ year the penalty is about $1K.
Part of the owing a lot after marriage is failing to fill out the
withholding form (W-4) properly
Best way to fight - live in sin (I bet your fiancee would love that one)
Next best way - take your just completed 1040's and do a trial 1040 filing
jointly. Then have additional withheld to cover the extra taxes.
Avrum Lapin
Upland., CA
------------------------------
Date: Mon, 28 Apr 1997 20:59:33 -0400 (EDT)
From: "Narasimhan, Seshadri" <NarasimhanS@bernstein.com>
Subject: Re: Major Caveat In Using Charge Cards
I must point out a major caveat in using charge cards. In many non-G-7
countries, it is quite possible to have your card numbers replicated and
fraudulent charges put on your card ... after you have left that
country. And yes, these charges can have your signature too!
How? I can think of at some possibilities. A) The store/restaurant that
you are using, usually takes away your charge card. It is quite easy to
photocopy your signature, practice it a few times and use it on a charge
slip that is created at the same time. Remember - this is a prestigious
store/restaurant and part of the customer service is to take your charge
card and return with the slip!! B) The charge slip that is brought back
to you is 'engineered' to get your signature on a second slip. C) An
employee of the store/restaurant is in collusion with a bank employee
that does the clearing ... and manages to get a forged charge slip
passed.
How do I know all this? It happened to me when I went to India in 1993.
When I visited Cochin, I went to one of the best clothing stores there
(most prestigious by local standards). I made a purchase for some 7456
Rupees (fairly odd number). Three months after my return to the US, I
found two charges on my statement - one for 7456 Rupees and another for
4000 Rupees. I protested the Rs. 4000 charge. After a wait of another 3
months I received a photocopy of both charge slips. I was astounded to
see my signature on both slips. I still have the charge slips. I had no
choice but to pay up. After all, the signature was mine.
A solution that a friend of mine uses whenever he visits any of the
Oriental countries (biggest culprits in this business) is to apply for a
new card before the trip. Ensure that only that card is used throughout
the trip. Upon return, he routinely reports the card as lost. After a
month or so he closes the account.
* Sai
------------------------------
Date: Mon, 28 Apr 1997 21:00:48 -0400 (EDT)
From: Jon King <kingjo@CS.ORST.EDU>
Subject: College money in minor's name...
In dealing with this whole question, I don't think most of the people who
were spouting numbers like "5.6%" of parent's assets vs "35%" of the kid's
being counted for financial aid were considering the type of financial aid
they are applying for. Basically, there's three types of aid that you can
get:
Merit based aid (scholarships/fellowships)
Need based aid (grants)
Loans
The first is not typically based on financial status (at least in my
experience), so whether the money is in the kid's name or the parent's
name, this wouldn't matter. The second requires REAL need. Chances are,
something that few people on this list would qualify for (especially with
years of planning/saving). Again, I'd say it wouldn't matter whose name
was on the account. For the third, well, this is why you've saved. So
you don't have a ton of student loans afterwards.
I think control of the money is a much bigger issue. That way it's a
college fund in name only. If the child decides not to attend college,
you're that much closer to retirement.
$.02 ;)
Jon
------------------------------
Date: Mon, 28 Apr 1997 21:01:42 -0400 (EDT)
From: CHRISTY_ROHRIG@hp-santaclara-om3.om.hp.com
Subject: Phone bill question + a complex divorce question
I've got two questions that I'd love to hear some input on...
I just received a phone bill for $0.27 that is a long distance company I
had used. I find it really hard to justify sending a check for $0.27 as it
costs $0.32 to do that. I have considered calling and having them charge
my credit card, but last time I tried that, I was told they are not set up
to take credit cards. Any thoughts on what I should do?!?
I've got two friends that are planning on getting divorced (or so they've
been saying for 1.5 years). The desire is to minimize total taxes paid
between both of them.
Here's the situation. They own a house in Massachusetts where his mother
and brother live. They rent two apartments in the house as well. The
house was purchased while they were married and living in California
(common property state). They used some of his premarital assets and took
a loan. They wish to continue to own the house together. The rents on the
house are currently covering the loan costs plus the cost of the apartment
manager but nothing more. He earns more than she does. Should they form a
S-corp? Is there a way that he can claim the house when there are losses
and she if there are gains? Any other thoughts?
Thanks,
- -Christy
p.s. Yes, they have a professional looking into this, but I'm interested
in understanding the ramifications of the options. (Neither party is very
interested in finances so I'll probably get to explain it.)
------------------------------
Date: Mon, 28 Apr 1997 21:02:22 -0400 (EDT)
From: energo@fwai.org (Energo Ed)
Subject: Re: How and where to get the best currency exchange rate?
Use a Visa credit card.
Ed
------------------------------
Date: Mon, 28 Apr 1997 21:03:25 -0400 (EDT)
From: Kurt Nosack <KNOSACK@novell.com>
Subject: Tax breaks for renting one room
I have a two bedroom condo and I am renting one room to a friend. I know I
need to declare the rent as income, but can I take any deductions? I know
people who rent whole units can make a number of deductions, such as
repairs, etc., but since I also live in the unit, I'm not sure if I can
deduct anything. Any suggestions or good references are greatly
appreciated. I just started renting the room, so if I need to keep any
records, its not too late.
TIA
Kurt Nosack
knosack@novell.com
------------------------------
Date: Mon, 28 Apr 1997 21:04:13 -0400 (EDT)
From: jimm@hi.com (Jim McGrath)
Subject: Re: 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
It depends on what your combined incomes are. The married filing
status rewards single income families and penalize those where both
work. Redo last year's taxes using both incomes and see how much more
you would have paid if married.
> 2) Short of my fiance or I quitting our jobs, is there anything we can do
> to prepare
Increase your withholding based upon the computation I just suggested.
Delay your marriage until the first of the year. You are considered
married for income tax purposes for the entire year in which you are
married.
Have only a religious ceremony performed. Consult a lawyer before
taking this approach.
> 3) Should we file jointly, or separately and does it matter.
>
> Any help, or previous experiences would be appreciated,
Jim (living in sin for this very reason)
------------------------------
Date: Mon, 28 Apr 1997 21:04:35 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: HMO's, insurance
Bob mentions:
>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.
This makes me wonder, why aren't there nonprofit HMOs or
nonprofit medical insurance plans where the objective is simply to
provide the best medical care at a reasonable price. Any profits at
the end of the year would be refunded to the members. Sort of like
having an HMO where the stockholders are also the HMO members.
-David Martin
------------------------------
Date: Mon, 28 Apr 1997 21:08:20 -0400 (EDT)
From: "David F. Cameron" <dcameron@stu.harper.cc.il.us>
Subject: Social Sec OVerpayment
I have been working 2 jobs all year thus far, and plan to continue
through the balance of the year. I just realized that by doing so,
I will make more than the Social Security taxable amount - but neither
employer will realize this - since w/o the 2 jobs, I wouldn't
exceed it. My question is, what do I do to ensure they don't take
out more than legally I am required to contribute. Or.. maybe the
question should be - how do I get it back next year...
Thanks,
Dave Cameron
dcameron@harper.cc.il.us
(Editor's Comment - On Form 1040, in the "Payments" section, is a line for
"Excess Social Security Tax Withheld". Claim the excess as a payment to
reduce what you owe or increase your refund. -IK)
------------------------------
End of persfin-digest V4 #29
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