Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #31
Date: Sat, 3 May 1997 17:37:03 -0400 (EDT)
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persfin-digest Saturday, May 3 1997 Volume 04 : Number 031
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX REPLY SERVICE [Oppenheimer Software <Connect-Sale]
National Internet Communications Long Distance? ["alkon" <alkon@hal-pc.or]
Re: No NJ property tax on cars?? [Richard Alpert <rda@CS.Princeton.EDU>]
Re: Cancelled Checks and SFNB - Best Bank In America [Randy Barnes <rbarn]
My PC Purchase ["David F. Cameron" <dcameron@stu.harper.cc.il.us>]
Re: Paying Bills Less Than $2 [Michael E Kurela <mk87+@andrew.cmu.edu>]
Re: changing jobs for the first time.....suggestions? [David Meyers <dmey]
Re: Is money given as a wedding gift taxable? [Rich Carreiro <rlcarr@anim]
Re: tax savings on child's income? [Rich Carreiro <rlcarr@animato.pn.com>]
Re: My Opinion on the HMO Debate [Rich Carreiro <rlcarr@animato.pn.com>]
Re: canceled checks ["rip west" <rip@montrose.net>]
re: Is money given as a wedding gift taxable? ["rip west" <rip@montrose.]
Consultation with a Financial Planner - what do I ask? [Steve Crossland ]
Re: Early distribution from retirement account for House Down Payment? []
Any Information on First-to-Die Policies? [David Cay Johnston <davidcay@n]
Single payment annuity In Divorce Settlement? ["Joseph Miller" <joemiller]
Student Loans to International Students? [LNUSEWY1.ZZBF2V@gmeds.com]
Michael Fasciano Fund? [rfrego@blitz.net]
Any experience with SOES trading? [Brian David James <bj756092@oak.cats.o]
Subject: Re: The Dangers of Black Market Currency Trading [rfrego@blitz.n]
Another YES for SFNB [rfrego@blitz.net]
SFNB Has Online Imaging of your Checks [WDStancil@aol.com]
Re: HMO Approval Ratings Article in Newsweek [eric <73354.3477@CompuServe]
Walk Softly and Carry a Minimum Debt Load [johnel@ix.netcom.com]
Joint tenancy- which is best? [zucker@epix.net (David & Meira Zucker)]
Met Life Agressive Annuity Preference Plus? [rfrego@blitz.net]
Re: Kiddie Tax Savings ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
RE: Second to Die Insurance / Variable Life / Gifts ["Cal Lester C.L.U]
====================================================================
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----------------------------------------------------------------------
Date: Sat, 3 May 1997 16:54:17 -0400 (EDT)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: MCI FAX REPLY SERVICE
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------------------------------
Date: Sat, 3 May 1997 16:56:36 -0400 (EDT)
From: "alkon" <alkon@hal-pc.org>
Subject: National Internet Communications Long Distance?
I recently looked at our a Houston newsgroup and it contained a
solicitation for a flat rate long distance telephone service that
sounded too good to be true. The offer went something like this: For
a $10 setup fee and a $5 per month charge, all call in the state of
texas is a flat rate of $.25 and out of state $.50 -- with no time
limit. In other words, these calls are not charged by the time on
the telephone. The texas rate is especially attractive as we have
some of the highest in-state rates in the nation. The solicitor
claims that an outfit called the National Internet Communications
Service is the organization putting this service together. He
further claims that the telephone calls are routed through the
internet and that only 13 states have this capability at this time.
Has anyone heard of this?? I must admit I am very skeptical at this
time.
Al Kondo
------------------------------
Date: Sat, 3 May 1997 16:58:29 -0400 (EDT)
From: Richard Alpert <rda@CS.Princeton.EDU>
Subject: Re: No NJ property tax on cars??
Martin K. Lubow claims that, "as a NJ resident since 1970, [he has] never
been taxed on [his] automobile," but admits to paying $43.50 to register
that automobile this year. Also a NJ resident, I pay about the same. In
Massachusetts, where I paid about $40 annually in excise tax on my vehicle,
registration (at the time) was $5/year. So....???
When is a tax not a tax? When is a user fee a tax?
I pay a higher rate of interest on my home mortgage because the
government is addicted to spending and has to borrow much of the available
capital before my own borrowing needs are even considered. Is that a tax?
I believe so.
Money I pay for my retirement benefits to the Social Security "Trust
Fund" (oxymoron?) are used to decrease the federal budget deficit. Is
that a tax? I believe so.
A portion of the fees I pay to have patent applications considered soon
will be diverted to the general budget. Is that a tax? I believe so.
When you buy anything, anything at all, how much of your purchase price
ends up paying the employer's share of taxes on his or her employees'
labor? Is that a tax? I believe so.
What is a tax? What is a user fee? We all pay far, far more in taxes
than any of us realizes. We just don't know it.
- Richard Alpert
------------------------------
Date: Sat, 3 May 1997 17:00:46 -0400 (EDT)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Re: Cancelled Checks and SFNB - Best Bank In America
One of the things (there are many) that I like about my SFNB account is
that I can pull up any cleared check in my computer and print it out. I
agree that hard copies can come in handy. I have had to use this feature
with one creditor and it worked perfectly. This is the best bank in
America, IMHO:-)
More info is at http://www.sfnb.com
R.Barnes
------------------------------
Date: Sat, 3 May 1997 17:01:37 -0400 (EDT)
From: "David F. Cameron" <dcameron@stu.harper.cc.il.us>
Subject: My PC Purchase
About 6 weeks ago, I asked for advice on buying a PC through this
forum. I got a lot of advice, and I had a lot of people ask me
to follow through on what I did. So... since I didn't save
everyone's e-mail address. Here's the scoop. I finally
went with the new k6 chip from AMD. It has 32-bit instructions,
and MMX for a couple hundred cheaper than Intel's pentium/MMX.
(Intel's pentium/MMX has 16-bit instructions - the pentium
pro has 32-bit - but no MMX).
I bought it from Cybermax (www.cybmax.com). I got a 17" monitor,
4 GB hard drive, and 64 MB memory for under $2500. It should
arrive next week.
I plan to partition the drive into a Win95 partition and a Linux
partition, since I'm such a UNIX hack.
FWIW, I am getting a Zip drive as well. I test drove the machine
and the drive before buying, and was very impressed. If
anyone wants any suggestions or has questions, let me know.
Later,
Dave Cameron
dcameron@harper.cc.il.us
------------------------------
Date: Sat, 3 May 1997 17:02:59 -0400 (EDT)
From: Michael E Kurela <mk87+@andrew.cmu.edu>
Subject: Re: Paying Bills Less Than $2
(Christy Rohrig objected to paying a $.27 phone bill.)
I set a $2 threshold on my bills. If a bill arrives
with an amount due of less than $2 I do not pay it.
The cost to pay a $2 invoice is not worth the effort,
and usually a call to the company to explain that you
refuse to pay a bill under $2 (and why you refuse to)
will result in the company waiving it. It is unlikely
that they really want you to pay it, also ! As technology
progresses, it is usually a computer system generating
that invoice. I've had a long distance bill for almost
6 months now (AT&T) that is around $1.
The costs I refer to are mostly environmental:
* the time it takes to write the check
* the cost of the check (if your bank provides free checks you
are likely paying for them in some other fee)
* the paper used
* the cost of a stamp
* the envelope
* the cost of mailing (postal costs such as labor, shipping,
airline costs, fuel costs, etc.)
* the processing time and labor costs of all the hands touching
the envelope and handling the check as it flows through
their A/R system.
* cost to the company of depositing the check in their
account.
* cost of reconciling their checking account(s) to receipts.
While these seem small and incremental costs, they add up. A
few of the organizations where I have worked set a $25 threshold
as the minimum amount they will pay.
- --mk
Michael Kurela
------------------------------
Date: Sat, 3 May 1997 17:03:46 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Re: changing jobs for the first time.....suggestions?
>From: "Christopher M. Kulp" <kulpcm@cig.mot.com>
>my 401K money. My limited understanding so far is that I can move it to
>somewhere like Janus or roll it over into my new companies 401K plan.
You can leave it there. You can roll it directly into your
new employer's 401k, or you can roll it into an IRA.
>While I have heard that moving it Fidelity, for ex., precludes my
>borrowing against that money if I had it in my companies 401K, the
If you leave it with the old employer, or roll it into the IRA,
you cannot borrow against it. Only if you roll it into your
new employer's 401k, and only if that new employer allows loans,
can you borrow it that way. You almost certainly don't want
to borrow against it anyway.
>performance of my current employers 401K plan has been dissapointing. I
In this case, don't leave it there.
>have about 20K or so, and I have been considering moving it to Fidelity
>or Janus for the flexibility and broad fund selection options.
If you roll it into an IRA, particularly a brokerage IRA,
such as Fidelity, you have _lots_ of flexibility - many different
mutual funds and the ability to buy individual stocks and bonds
and such.
Warning, though - if you roll it into an IRA, _never_ make
any additional contributions to it (except for other 401k
rollovers) if you have any desire down the road to have
the ability to roll it back into a future employer's 401k.
That way - meaning no contributions, just rollovers from
employer plans - you have a "conduit" IRA, untainted and
available for putting back into employer plans.
>2) 401K options..
Check out the new employer 401k plan pretty carefully
before you do something like roll that $20k into it.
You may want to keep it in that IRA as I indicated above
if you don't like the new employer's 401k all that much.
Of course, even if it is not a great 401k, it is probably
still a good thing to participate...
>3) Suggested places (like Fidelity, Janus, etc) to put my money and why I
>should put it there...I would especially appreciate first hand
>information on these places and how they handle your 401K money.
To them it is just an IRA account. If you go for individual
mutual funds, you can go with almost any one out there. If
you want maximum flexibility, though, you need a brokerage
account. Look over the details of the account _carefully_
as many have unpleasant annual fees and fees for closing
the accounts (though you probabaly will keep an IRA account
for a _long_ time). Check out especially the various
brokerages with large selections of no-transaction-fee
mutual funds like Fidelity USA, SchwabOne, JackWhite, etc.
- --D
------------------------------
Date: Sat, 3 May 1997 17:04:39 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Is money given as a wedding gift taxable?
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>Does anyone know how much (if any) money given to a couple
>getting married is taxable?
Like all gifts (except possible those involving non-citizens living
overseas), there is no tax whatsoever, no matter how large the gift,
on the recipients. The givers may have to use up some of their
unified credit or pay a gift tax if the gift is of a future interest
or if all gifts in a tax year from that person to you total more than
$10,000.
- --
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 3 May 1997 17:05:51 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: tax savings on child's income?
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>hi: we have a one-year old child and i've heard that the first $1300 of
>income for the child is tax-free? how can i use this to reduce my
Not quite. For a child under 14, the first $650 (indexed for
inflation) is tax-free, the next $650 (indexed) is taxed at 15%, and
the rest is taxed at your top rate.
>tax-bill? should i just gift him some of my mutual funds so when they
>declare dividends etc. they would be tax-free upto $1300? are their
No, IMHO you almost definitely should NOT. Why? Because to gift over
mutual funds, you'll have to establish an UTMA/UGMA account. Anything
put in that account:
(a) legally belongs to the kid
(b) can*not* be withdrawn to pay for things you are required by law to
provide for the child
(c) the kid gets the money no strings attached when he turns 18 (or 21,
depending on your state)
(d) for college financial aid purposes, it will count against you 6 times
more than if it were in your own name.
Now, you could go to a lawyer and set up a more traditional trust
which would avoid some if not all of these problems, but then you may
well be paying the lawyer on the order of $1000 to do that.
>other ways of tapping this potential tax-savings?
If you are in the 28% bracket, the savings is only:
$650*0.28 + $650*(0.28 - 0.15) = $266.50 per year.
Is not having to deal with the potential problems worth more than
$266.50 to you? Just something to keep in mind...
- --
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 3 May 1997 17:06:52 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: My Opinion on the HMO Debate
>I firmly believe that a single-payer system like nearly every other
>democracy has would be the best solution because it would squeeze the profit
>out of all the middlemen that our system currently has and would allow the
% setenv SARCASM on
Why stop at health? Why not "squeeze the profit out of all the
middlemen" in all industries? Think of the waste grocery stores are.
Wouldn't it be far better to have a single-payer deal directly with
farmers, buying what it feels is best and making that available to you
and me? Or what about cars. Think of how much we buyers could save
if all those car dealerships had the profits squeezed out of them.
The government could just buy cars directly from the automakers in
bulk at a reduced cost and pass the savings along to us. Heck, why
not eliminate all profits and just have the "single-payer" run
everything. That way we can be sure that the consumers are getting
the best possible deal, since they won't be getting ripped off in the
form of companies earning profits on goods.
% setenv SARCASM off
- --
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 3 May 1997 17:07:37 -0400 (EDT)
From: "rip west" <rip@montrose.net>
Subject: Re: canceled checks
David Martin said......
<<
Several people have praised online bill paying and online banks
like SFNB. Many aspects of these appeal to me, but one problem is that
they often don't give you canceled checks. Actually, a number of
regular banks don't do this anymore either. A paperless online economy
is a nice idea, but when something goes wrong, I have found that
having a piece of paper helps a lot in resolving the conflict. Banks
may claim that they will keep the records for you, but they only keep
them for a certain period of time, and they have no incentive to go
out of their way to help you.
>>
I use CoreStates Bank with Quicken for online bill paying. They supply the
cancelled checks with the bank statement each month. I am very happy with
the arrangement.
rip
------------------------------
Date: Sat, 3 May 1997 17:10:05 -0400 (EDT)
From: "rip west" <rip@montrose.net>
Subject: re: Is money given as a wedding gift taxable?
Mark said....
<Does anyone know how much (if any) money given to a couple
<getting married is taxable?
The money would never be taxable to the recipients. It is conceivable but
unlikely that the givers could be assessed for gift taxes, in which case
the gift would have to be really large.
rip
(Editor's Comment - Technically, the donor needs to file a Gift Tax Return
(Form 709) if the gift to any one person is over $10,000. No tax is due
unless total gifts made (over the annual $10K exclusion per person) is
over $600,000. -IK)
------------------------------
Date: Sat, 3 May 1997 17:10:38 -0400 (EDT)
From: Steve Crossland <stevec@onr.com>
Subject: Consultation with a Financial Planner - what do I ask?
My wife and I recently attended a seminar on retirement
planning which was hosted by a local financial planner and
have taken him up on the offer made to all attendees to come
in for a private 1 hour consultation. We are fully aware that
this will be an opportunity for him to try to earn our business
and we do need to start doing something about our retirement
planning. (I'm 34, wife's 36, two kids 1 & 4, we are both self
employed and have no formal retirement plan in place)
Questions:
What questions should we ask this guy and what answers should we hope to
hear?
What questions should we expect him to ask us?
What questions should we be asking ourselves as we consider using an FP?
Red flags to look for?
Why is using a Financial Planner a bad idea?
Why is using a Financial Planner a great idea?
Any other advise/input would be appreciated.
Thanks, I really enjoy this group.
Steve Crossland
------------------------------
Date: Sat, 3 May 1997 17:11:28 -0400 (EDT)
From: garsch@dircon.co.uk (Gary Schwartz)
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
Not sure what this question means. As I did my taxes for last year,
I reported the foreign income on line 7 of the 1040, then was able
to deduct it on a line 21 through fo 2555, so there's no net
effect on my total income reported on line 22.. I'll have no
other income, earned, or otherwise, for my return next year.
I figure that this means that the distribution goes into my
income and therefore contributes to my AGI. Then, standard deductions
(no Sched A for me) and exemptions reduce my taxable income further.
For 1996 those add up to $6550, which I guess I could distribute
with only a 10% penalty.
Am I figuring this out correctly?
Also, are there any other considerations - eg, from which account,
my IRA or Keogh, am I better off taking the distribution.
thanks,
gary
- --
garsch@dircon.co.uk
+44 171 431 2533
------------------------------
Date: Sat, 3 May 1997 17:12:52 -0400 (EDT)
From: David Cay Johnston <davidcay@nytimes.com>
Subject: Any Information on First-to-Die Policies?
>From: "Jim Reed" <jreed1@airmail.net>
>Subject: Second-to-die Term Life Insurance?
>
How about some information on first-to-die policies, which would be valuable
to people concerned not about estate taxes, but support for minor children.
David Cay Johnston
Reporter
The New York Times
229 W. 43rd Street
New York, N. Y. 10036
212.556.3605 talk
212.556.4007 fax
------------------------------
Date: Sat, 3 May 1997 17:14:27 -0400 (EDT)
From: "Joseph Miller" <joemiller@hotmail.com>
Subject: Single payment annuity In Divorce Settlement?
I am currently going through a divorce. For a number of reasons I would
like to buy out my wife's interest in my company's defined benefit pension
without touching the pension itself. (If I can dodge the layoffs for
another 10 years I'll be able to draw a full pension at 57 and not wait
until 65, she'll only be able to draw a full pension at 65 so the pension
is worth less to her than to me, if viewed logically.)
I have some money my parents left me (hence non-marital property) that should
cover buying her an annuity that would pay her at age 65 as much or more than
she would get from her cut of my pension. In short I want to spend unqualified
money to save my qualified money and show that she doesn't loose in the process.
Assuming I can talk her and her lawyer into this I want to spend as little as
possible to buy her a good solid annuity. Also a low cost annuity would return
more to her, all other things being equal, than a more costly one.
I know Vanguard is a good place to start but all the other vendors I'm hearing
about are from agents trying to sell me something. Does anyone have any good
suggestions as to places to check out for good quality low cost annuity?
Feel free to respond to me off line or through the list.
Thanks,
Joe
------------------------------
Date: Sat, 3 May 1997 17:15:24 -0400 (EDT)
From: LNUSEWY1.ZZBF2V@gmeds.com
Subject: Student Loans to International Students?
Wanted to find out if anyone has experience with student loans to
international students. I know a couple of lenders (Citibank as an eg)
lend to international students with a cosigner, but is there a better deal
on the block. Any advice would help.
------------------------------
Date: Sat, 3 May 1997 17:17:49 -0400 (EDT)
From: rfrego@blitz.net
Subject: Michael Fasciano Fund?
Apparently Michael Fasciano has a small cap fund with less than $30
million dollars in assets, and does not like to waste money on advertising
according to Personal Finance magazine. This fund has a bet of only .56%,
and has earned an average of 13.8% a year over the last 5 years. It has
earned morningstars Five-Star rating for risk adjusted performance over
the last three years. The article quotes Fasciano,
" My fund is for people who want to invest in smaller stocks and still sleep
at night".
Ok, Folks here is the challenge!! The article did not mention the funds name,
and stated that they are saving this undiscovered fund exclusively for
renewing customers. Can anyone name this fund?
Regards!
Sarge
------------------------------
Date: Sat, 3 May 1997 17:19:06 -0400 (EDT)
From: Brian David James <bj756092@oak.cats.ohiou.edu>
Subject: Any experience with SOES trading?
Hello again everyone-
Once again, congrats to Ira who seems to be getting more and more
recognition for his fine work!
My question is about SOES trading. Does anyone have any experience with
it, good or bad? How about new rules and regulations? Anyone heard of the
experimental 20-minute delay rule?
TIA,
Brian D. James
Ohio University Innovation
Center Marketing Assistant http://www.cns.ohiou.edu/ictto/
bj756092@oak.cats.ohiou.edu ictto@www.cns.ohiou.edu
------------------------------
Date: Sat, 3 May 1997 17:20:42 -0400 (EDT)
From: rfrego@blitz.net
Subject: Subject: Re: The Dangers of Black Market Currency Trading
>From: Kumar Verma <sales@ven.com>
>Subject: Re: Banks Are the Worst Place to Exchange Money
>Countries), I exchange my dollars for local currency with friends. They
>always offer a higher rate.
I hate to be the one to bust your bubble but what you are doing is considered
"black marketing" and is illegal. When I lived in Greece in the early
eighties, there were rumors of people trading $1 for the equivalent of $3
in Greek currency. Those who got caught paid a hefty price for black
marketing.
It is not worth the risk, nor is it the right thing to do in my opinion.
Regards!
Sarge
------------------------------
Date: Sat, 3 May 1997 17:23:30 -0400 (EDT)
From: rfrego@blitz.net
Subject: Another YES for SFNB
>them for a certain period of time, and they have no incentive to go
>out of their way to help you.
I have been using Security Network Bank for several months now, and have
nothing but good things to say about them and their customer service. I
don't understand why you do not think they have an incentive to help
customers, it seems to me that wanting to stay in business and maintain a
good reputation is incentive enough. As for canceled checks or statements,
you can review them online with no problem at all.
Regards!
Sarge
------------------------------
Date: Sat, 3 May 1997 17:25:27 -0400 (EDT)
From: WDStancil@aol.com
Subject: SFNB Has Online Imaging of your Checks
>Several people have praised online bill paying and online banks
>like SFNB. Many aspects of these appeal to me, but one problem is that
>they often don't give you canceled checks. Actually, a number of
>regular banks don't do this anymore either.
Please note that more and more banks (including SFNB) are now offering online
imaging - you can look at a picture of your canceled checks online. Cheaper
for the bank than returning the cancelled checks but allows the customer to
examine the check (front and back). It is a popular option - my bank is
acquring another bank that now has 60% of retail customers and 40% of
business customers using imaging.
And on another note:
> I got and email today describing great returns on CD's from
> FREEDOM STAR BANK -- P.O. Box 66781 -- Phoenix, AZ 85082
> They claim to offer only CD's, i.e., Certificates of Deposit.
> Has anyone had any experience with these people?
> is it real or is it a scam?
Here's the litmus test (so to speak): ads for FDIC-insured
products MUST include the phrase "Member FDIC".
(Yes, I work for a bank)
------------------------------
Date: Sat, 3 May 1997 17:27:39 -0400 (EDT)
From: eric <73354.3477@CompuServe.COM>
Subject: Re: HMO Approval Ratings Article in Newsweek
Newsweek, May 5, has an article describing the fallacies of approval
ratings. HIGHLY RECOMMEND READING THE ARTICLE. Also, check out:
www.caredata.com
------------------------------
Date: Sat, 3 May 1997 17:28:59 -0400 (EDT)
From: johnel@ix.netcom.com
Subject: Walk Softly and Carry a Minimum Debt Load
Paul Brown recently suggested:
>>With regard to online banking, I would note that more and more folks are
offering to let you pay your bills via automatic debits from your checking
account. Granted, this lacks the flexibility and the computer-weenie
appeal of online banking. But if you're cheap like me it's cool because
it's free. You'd be surprised at how many of your regular monthly payments
can be put on autopilot this way.
My response:
Excellent idea! Time is money, and the more we can streamline the mundane
monthly bill-paying procedures, the better (as long as we continue to keep a
watchful eye on the accuracy of the bills and payments).
One modification I would propose to other like-minded people: instead of
automatically debiting your checking account, use a credit card. This gives you
greater control over when the money comes out of your checking account, a
necessity for people like me who walk the fine line between having enough money
in the checking account to qualify for free checking, but not enough money to
give the bank a free ride on my personal money, when I can earn better interest
elsewhere.
Currently automatically charged to my credit card are: monthly electric bill,
cell phone bill, internet service, and annual membership dues for National
Motorists Assoc. and AOPA. I also just added my local phone bill to my new Bell
South Visa, which pays an annual 2% rebate on the phone bill and a 1% cash
rebate on everything else.
And yes, I am a shameless "free-loader". I pay my Visa bill in full monthly, to
the chagrin of those in the credit card business of collecting interest!
BTW, two sad stories witnessed during the past week: one co-worker paying 24%
interest to a furniture store (she filed bankruptcy a few years ago), and
another friend paying 30% (yes, 30%!) on a car loan. My advice to both: Eat
lightly for a long time and pay those loans off as early as possible! I even
told my car-note friend : "Heck, *I'd* loan you the money at 30% if you weren't
such a rotten credit risk!" (The old rate-of-return vs. risk problem, eh?) In
the course of the next 4 years, she will pay more than $4000 in interest!!!
YEOWCH!!!
Just pointing out the necessity of saving up and paying cash for things we want
or need :)
Walk softly and carry a minimum debt load,
John Leipold
------------------------------
Date: Sat, 3 May 1997 17:29:49 -0400 (EDT)
From: zucker@epix.net (David & Meira Zucker)
Subject: Joint tenancy- which is best?
My wife and I hold all of our assets jointly. Account with brokerage is
titled "joint tenants with right of survivorship" I was advised by an
attrorney during a social conversation that we should title our assets as
joint tenants in entirety with right of survivorship, I am also aware that
there are joint tenants in common. Could someone please explain the
differences, and pros and cons of each vis a vis estate planning, shielding
assets from liability judgements, etc.
Thank you
David Zucker
------------------------------
Date: Sat, 3 May 1997 17:31:54 -0400 (EDT)
From: rfrego@blitz.net
Subject: Met Life Agressive Annuity Preference Plus?
Does anyone have a recent NAV for this annuity?
Met Life Agressive Annuity Preference Plus
It is usually listed in Barron's weekly of the WSJ paper editions.
Thanks,
Sarge
------------------------------
Date: Sat, 3 May 1997 17:32:39 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Re: Kiddie Tax Savings
..From: "Dalmia, Bipin K." <DALMIABK@phibred.com>
..Subject: tax savings on child's income?
..hi: we have a one-year old child and i've heard that the first $1300
..of income for the child is tax-free? how can i use this to reduce my
..tax-bill? should i just gift him some of my mutual funds so when they
..declare dividends etc. they would be tax-free upto $1300? are their
..other ways of tapping this potential tax-savings?
- --
It is called "Kiddie Tax Savings" Until the child reaches the age of
14, first $650 annual income is tax free from Federal income tax and the
next $650 is taxable at 15% regardless of parent(s)'s tax bracket.
Until the age of 14, any unearned income (different from earned income,
which a child earned from job) will be taxable at parent(s)'s income tax
bracket which may be higher than 15%, if any.
The most possible Best advice for any kid is to invest in growth mutual
funds because with growth mutual funds, there tends to be lower
reportable taxable income than income mutual funds or fixed income
investment for many years, unless there may be more deposits to the
account.
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
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, 3 May 1997 17:34:24 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@msn.com>
Subject: RE: Second to Die Insurance / Variable Life / Gifts
>From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
>Subject: Re: Second-to-die Term Life Insurance?
The recommended way is not to leave everything to your spouse; but set up
a trust for the $600K -- with income to spouse.
>>>> Spoken like a true Chauvinist ( said with tongue in cheeck ). What Lily
is referring to is what I outlined earlier as an A & B Trust. The Decedent
provides in his/her will that up to $600K of PERSONAL asset's be placed in a
trust for the benefit of beneficiaries other than the spouse, with the spouse
receiving the interest thereon, balance in a trust for the spouse.
Also the spouse can
withdraw x%/yr if income is insufficient to maintain his/her lifestyle.
That way, when the 2nd spouse dies, s/he can leave another $600K estate
tax free -- for a total of $1.2 million. [I don't remember the name of
the trust.]
A & B Trust
From: Paul Balwierz <pbalwierz@earthlink.net>
Subject: Variable life tax issues
In addressing variable life and its tax issues Cal Lester wrote:
Remember, only those withdrawals "up to basis" will be income tax free.
ALL withdrawals after that point ( until it becomes a Death Claim) will
be 100$ Income Taxable.
Cal is 100% correct however, almost all companies offering variable life
include a loan provision that will allow you to access your cash value
at a 0% or a very low interest rate.
>>>> TRUE
For example Mr A has contributed $25,000 to his VUL and it has grown to
$50,000. He needs $40,000 for junior's college tuition. He withdraws
25K Tax free (his basis) and takes a (no or low interest) loan from his
account for the remaining 15K. This is a loan and is TAX FREE.
>>>> Close, but no cigar ! ! ! ! The 15K referred to would be "currently
Income Tax Free", since it IS a loan. IRS says that IF you make a loan, which
MUST include two provisions
a) An obligation to repay
b) an interest charge
then there will be no current interest due at the time of the loan. However in
the unlikely event that the policy is canceled or is permitted to lapse, then
the Insured will receive a 1099 or similar form advising him of the Income Tax
liability on the GROSS profit received from the contract ( All money received
over and above the basis, in this case 25K ).
As I said
most companies provide the low interest provision in the VUL contract to
allow tax free access to the cash value. Of course his death benefit
will be lowered by 40K.
IF the policy remains in force until death, then there will NOT be any income
tax due on the loan, as it is then paid off as a portion of the Death Proceeds
of a Life Insurance policy, which are Income Tax Free when paid to a named
beneficiary.
In the hands of a savvy financial professional a VUL can prove to be a
very valuable and flexible financial tool, providing death coverage,
emergency funds, and the beginnings of a retirement fund.
The key here is professional. Unfortunately not all VUL is sold by
professionals, nor do all purchasers of VUL understand what it is that they
have bought.
Cal Lester CLU
Insurance Course CoOrdinator
Broward Community College.
>From: nowak@comm.mot.com (Mark Nowak)
>Subject: Is money given as a wedding gift taxable?
Hi,
Does anyone know how much (if any) money given to a couple
getting married is taxable?
None, provided that it is an amount less than $10,000, and it is a gift of
present interest. One can even give gifts well above $10K, and neither the
recipient to the grantor would incur any immediate tax liability. The grantor
would simply file the proper form, to have it applied against his/her Unified
Gift & Estate Tax.
Cal Lester CLU
------------------------------
End of persfin-digest V4 #31
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