Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #44
Date: Thu, 5 Jun 1997 21:36:08 -0400 (EDT)
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persfin-digest Thursday, June 5 1997 Volume 04 : Number 044
IN THIS ISSUE:
re: Timeshare Buying Tips [Rob Long <rob@holiday-timeshares.com>]
ADVERTISEMENT: MCI CONNECT FOR CC:MAIL [Oppenheimer Software <Connect-Sa]
Does My Sister Need a Financial Planner? [Yoda84@aol.com]
Re: Cheap Prescription Drugs In Mexico ["Joseph Brouillette" <Broutek@wor]
Re: Used Cars - Bob Was Taken For A Ride [Somesh Rao <somesh@syl.nj.nec.]
Looking For Insurance Salesmen [Lloyd Colston <kc5fm@hotmail.com>]
Estate Planning [Robert Francis <edrlf@huber.com>]
RE: Should School Pay Doctor Expense? ["Cal Lester C.L.U." <Cal_Lester@]
My Investment Club Experience [Yoda84@aol.com]
Should I Borrow Against My Pension? [Steven Klein <SKLEIN@snm.org>]
Re: Preschool paying for bruised finger [kristina@net.com (Kristina Miran]
Kids and the stock market . . . [Holly D <hollyd@informix.com>]
Re: IRA For Minor [Kurt Nosack <KNOSACK@novell.com>]
Source of Investment Club Information [JSulser462@aol.com]
Beware of Making the Maximum 401-K Contribution ["Steven M. Foulks" <sfou]
URL Of Frank Armstrong Book? [Shirley Humphrey <sahumphrey@ucdavis.edu>]
URL Request - Auto Routing, Residence Locating Programs ["Charles A. Wilm]
Journalist Looking For People Retiring Early [MoneySecre@aol.com]
Banks Allow Transactions on Closed Credit Card Accounts [MoneySecre@aol.c]
Free e-mail? [mikemore@juno.com (Michael E Morehouse)]
Followups to "Family Finances" post [Anonymous]
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Date: Thu, 5 Jun 1997 21:05:35 -0400 (EDT)
From: Rob Long <rob@holiday-timeshares.com>
Subject: re: Timeshare Buying Tips
(Dick Kroeger asked about buying timeshares)
Dick,
Well, I'm a little biased, but here goes...
I'm the VP Technology of a company called the Holiday Group in sunny
Seattle. We're a timeshare resale company specializing in repossessed
and foreclosed timshare properties. Basically, we take these
financially distressed timeshares, clear title and re-sell them to the
general public. It's a fun and dynamic industry.
That said, I would caution you to find out as much as you can before
you make your first timeshare purchase. The 'net is a great place to
find resources on buying and selling timeshare properties. A couple
tips:
- Retail timeshare properties (bought directly from developers) will
generally lose 50-60% of their value the minute you walk out the door.
- - Return on investment shouldn't be your primary goal in buying a
timeshare property. Timeshares are difficult to resell as there's a
whole lot of them out there and prices are artificially inflated.
- - Buy a timeshare you can trade for other locations. Exchange companies
will take your week in trade for a comparable week in another location.
E.G. - winter Orlando week for a winter Carribean week. Gives you
flexibility - especially when you get sick of Orlando every year!
Take a look at these web site resources for a little more introductory
information.
http://www.holiday-timeshares.com/closet.html
- an article by my boss... it'll give you some of the scoop on
the timeshare biz.
http://www.timeshare-users-group.com/
- Timeshare Users Group... a non-profit resource on all
things timeshare!
Hope this helps. I'd be happy to answer any other questions you may
have about timeshares.
Best Regards,
Rob Long
The Holiday Group
http://www.holiday-timeshares.com
------------------------------
Date: Thu, 5 Jun 1997 21:05:35 -0400 (EDT)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
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------------------------------
Date: Thu, 5 Jun 1997 21:06:19 -0400 (EDT)
From: Yoda84@aol.com
Subject: Does My Sister Need a Financial Planner?
Please help me settle a dispute between my sister and her husband. One of
them feels they need a financial planner and the other does not. They have
both have retirement plans at work and he has about 45,000 in a IRA which is
invested in Fidelity funds. I think they should open an account with Schwab
and switch out of Fidelity into something like Vanguard. I don't think they
need a planner and I send them info whenever it seems to apply to them. They
do a good job saving. I would appreciate the opinions of others on this
topic. Let me know if more info is needed. TIA
------------------------------
Date: Thu, 5 Jun 1997 21:07:06 -0400 (EDT)
From: "Joseph Brouillette" <Broutek@worldnet.att.net>
Subject: Re: Cheap Prescription Drugs In Mexico
I have traveled extensively throughout the world. I would venture to say
that more countries then not, do not require a prescription to get drugs.
If you have a simple illness you tell the symptoms to your druggist, and he
will prescribe and sell the medicine to you.
This system has proven itself over time. Having to go to the doctor for
simple illnesses was outdated long ago. The big medical lobbyist in
Washington would never allow this type of open drug policy in the USA, and
will do what it takes to stop it. I can hear them shouting now ***
everybody is going to die - you'll see ***.
There is a lot more to be learned about this subject... Joseph
------------------------------
Date: Thu, 5 Jun 1997 21:07:54 -0400 (EDT)
From: Somesh Rao <somesh@syl.nj.nec.com>
Subject: Re: Used Cars - Bob Was Taken For A Ride
Bob was talking about used cars.....
>True story. We bought my wife a new '92 Honda Accord LX (in '92) for
>$14,900. It was a good price -- we know how to bargain. It now has
>60,000 miles on it. By great coincidence, a couple of months ago a
>good friend of ours bought a used '92 Honda Accord LX with 60,000 miles,
>for $12,000. When I heard that, it made me want to sell ours. I'd
>jump at the chance to use a new car for 5 years for a total price of $2900.
>
>So, who do you think got a better value for their money? (BTW, our friend's
>purchase price wasn't out of line with prices for used Hondas around here).
Methinks your friend got taken for a ride. A $4000 ride.
According to Edmunds, the prices for a 92 Honda Accord LX is
4 Dr LX Sdn
Trade-in $6,500
Market $8,440
Add $245 for AT-4 Transmission
Check it out at www.edmunds.com.
Somesh
------------------------------
Date: Thu, 5 Jun 1997 21:08:59 -0400 (EDT)
From: Lloyd Colston <kc5fm@hotmail.com>
Subject: Looking For Insurance Salesmen
If you are an insurance salesman, I would like to ask you a few
questions regarding the industry privately in email.
This is not something I am trying to sell you. I seek
information only. No salesman will call. :)
- --
Lloyd Colston
Pryor, OK USA
Internet business group: http://www.isbc.com
KC5FM Home page http://www.viagrafix.com/colston
------------------------------
Date: Thu, 5 Jun 1997 21:10:22 -0400 (EDT)
From: Robert Francis <edrlf@huber.com>
Subject: Estate Planning
I believe a basic concern of many persons in their middle years who are
still fortunate enough to have their parents alive, is what steps can be
taken to protect a family's moderate estate from the potential hazards of
long term care in a nursing home. My understanding is that
Medicare/Medicaid and other insurance carriers will not cover long term
facility care until an estate's assets are liquidated.
If this is true, are there strategies us average Americans can use to
protect our family stature, whatever that may mean to you. I refer to
estates of $3 to $6 hundred thousand, including real estate, personal
property, pension assets etc. I have heard that elderly can sell their
home to younger family members for $1, and then pay rent in amount of
taxes etc to the younger members, to remove the house from this equation.
Any feedback? Thanks.
------------------------------
Date: Thu, 5 Jun 1997 21:13:36 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@msn.com>
Subject: RE: Should School Pay Doctor Expense?
>Since I went to a PPO provider my only expense was $20. I feel the school
should pay the whole doctor expense and I should not even have to file with my
insurance carrier.
Should I stop the insurance process and have the school deal with the
whole bill (which is $70.00 including the copay) or should I just have the
school pay the $20.00 copay?
Any opinions?
YES, and that is EXACTLY what it is, an OPINION Only. I do not practice law
in any way shape or form. However it appears that your son was a "paying
guest" at the facility. When they accept money, they also assume
responsibility. In my OPINION, the claim should be treated in the same manner
as Workers Compensation Medical benefits. The facility is required to make a
report to their carrier. You should have advised the doctor that it was
covered by the facility, and they ( or their carrier ) should pay the ENTIRE
cost, not merely the co-pay that you laid out. Let it suffice to say that if
it were my child ( or more likely grandchild, I would not have paid out a
cent.
Cal Lester CLU
------------------------------
Date: Thu, 5 Jun 1997 21:14:17 -0400 (EDT)
From: Yoda84@aol.com
Subject: My Investment Club Experience
I have been in an investment club for the past three years. We put in $30 a
month and have learned alot. I would like to hear from others about wheter
they use NAIC forms or not. My club is not an NAIC club but I am a member
and read the magazine. I have been trying to decide if I should recommend
membership to the club or we should continue developing our own process for
decision making. So far we are up about 29% and this includes commisions
from a full service broker (he does give us a break).
------------------------------
Date: Thu, 5 Jun 1997 21:15:32 -0400 (EDT)
From: Steven Klein <SKLEIN@snm.org>
Subject: Should I Borrow Against My Pension?
I am fully vested in my companies pension plan. The company contributes
12% of my yearly earnings to the plan. I contribute nothing. My company
is now offering the employees a chance to borrow against the pension. I
am considring taking a $5000.00 loan (to be paid back over 3 years at
9% interest per year). The account value stands at $25000.00.
Every year the value of the pension fluctuates (based on return of the
pensions portfolio, last year my pension grew by 14% not including the
annual 12% investment into the pension). My question is: If I borrow the
$5000.00 will my annual return be based on the $25000.00 in the pension
or $20,000 ($25,000 - $5000.00)?
Thanks,
Steve
------------------------------
Date: Thu, 5 Jun 1997 21:17:12 -0400 (EDT)
From: kristina@net.com (Kristina Miranda)
Subject: Re: Preschool paying for bruised finger
Hi Steven
I wasn't sure if I should respond to this or not because it may sound
cold but why do you think the school should pay for ANY of the bill?
I know when I was very young I used to hurt my self all the time at
school. They never offered to pay the bill and my parents never expected
them to. Kids get hurt all the time. I'm sure he has gotten a bruised finger
while playing at home under your supervision without any true negligence
on your part. I just find it frustrating that people expect others to
"Pay" for every little thing that might possibly happen. The state school
systems in most areas have enough expenses and are usually scrounging up
inadequate materials for the children to use anyway. Why would you want
to contribute to that by making them pay for a bruised finger. I could
understand if they told every child to do something out of the ordinary
and the children suffered some minor injuries but he was going to the
bathroom for goodness sake.
Do you really feel like it was the schools "fault" that his
finger was bruised or was it just an accident that could have happened
anywhere? I also don't understand why you feel that you shouldn't submit
it to your insurance company. It's such a small amount ($70) that it isn't
going to raise your premiums or cause you to be evaluated by your carrier so
there isn't any reason why you shouldn't just submit the claim and "graciously"
accept the schools offer to pay the $20 co-pay.
I am not affiliated with any school systems and, to be honest, I don't
have any kids BUT I do take care of alot of children and see cuts and
bruises appear all the time. One kid that I babysit for even cut open his
knee in the waiting room of the Dr's office because he was playing and
slipped. The floor wasn't wet and his mother was sitting there watching
but he was being a kid and alot of time that means getting ow-iees.
Good luck in whatever you decide.
------------------------------
Date: Thu, 5 Jun 1997 21:18:19 -0400 (EDT)
From: Holly D <hollyd@informix.com>
Subject: Kids and the stock market . . .
Can anyone recommend a discount broker willing to handle small
accounts? My son (12) would like to take the money he currently
has invested in savings bonds and invest in some stocks. I would
like to start him out with about $500 invested in one of his chosen
stocks, but all the brokers I have looked into require minimum
accounts of $2000 to $5000.
I have a bit more than $1000 worth of stock certificates for the
company I work for and will have slightly more than that again in
early July - if I were to have these shares transferred into an
account with some broker would that help matters any? I would like
for my son to be able to hold these shares himself, though.
Holly Deiser
------------------------------
Date: Thu, 5 Jun 1997 21:19:28 -0400 (EDT)
From: Kurt Nosack <KNOSACK@novell.com>
Subject: Re: IRA For Minor
>>Many people on this list may be at a point where they have an extra
>>2,000 they would like to put towards their children. Heck, it may just
>>be around Xmas time where a child gets some gift money where it can
>>be put aside.
>Just remember that IRA contributions have to be made out of earned
>income. If the kid has no earned income, he cannot contribute to an
>IRA. The actual money that goes into the IRA may well be from a gift,
>but the amount of the IRA contribution is limited to the lesser of
>$2000 or the kid's earned income for the year.
>Rich Carreiro
>rlcarr@animato.pn.com
As a creative workaround, what about "paying" a child to do
chores/yardwork?
I suspect this doesn't qualify for earned income, but thought I'd throw
out the idea to the group anyway.
Kurt Nosack
knosack@novell.com
------------------------------
Date: Thu, 5 Jun 1997 21:20:32 -0400 (EDT)
From: JSulser462@aol.com
Subject: Source of Investment Club Information
I lead 12 investment clubs in the Los angeles area (actually plus one on
Orcas Island, near Seattle, Wa.). If you E-mail me, I can help you get
started and organize your club, show you how to evaluate mutual funds and
stocks. I am a financial planner. My comany name, The Institute for the
Empowerment of Women, specializes in teaching women how to invest , among
other services with the goal of helping women get in touch with the power we
already posses!
Let me know.
Julie
------------------------------
Date: Thu, 5 Jun 1997 21:22:19 -0400 (EDT)
From: "Steven M. Foulks" <sfoulks@nmu.edu>
Subject: Beware of Making the Maximum 401-K Contribution
.From: Mark Coulter <coulter@csonline.net>
>Subject: Kev's Financial Guide
>Lots of good stuff there, thanks. Please add some of my personal
>favorites.
....
>4. Make the max 401-k contribution even if you have to use other
>investment money to do it. Chances are you won't need the money untill
>you retire anyway and the penalty isn't that severe if you do. Some
>plans even allow you to borrow from them and pay yourself interest.
>(Don't be reckless with this feature)....
This can potentially be a very bad thing to do in today's tax climate. I
followed the same advice myself until recently. Not only did I maximize my
403(b) contribution (similar to a 401(k)) for non profit employees), but
also my IRA and Keogh plan contributions. With the advent of the 15 %
excess pension (tax sheltered asset ) accumualtion penalty if you die with
too large an accumulation, and the 15 % excess pension (tax sheltered
asset ) distribution penalty (currently on hold until 1/1/2000), coupled
with the income taxes due on most distributions, the wisdom of maximizing
your tax sheltered saving is questionable, unless you will use them up
before death.
It is possible that one could die with large tax sheltered asset (pension
type) accumulations and that virtually all of these assets could go to the
government in the form of income taxes, estate taxes, and penalties.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
www.nmu.edu/instruct/business/sfoulks/sfoulks.html
------------------------------
Date: Thu, 5 Jun 1997 21:23:57 -0400 (EDT)
From: Shirley Humphrey <sahumphrey@ucdavis.edu>
Subject: URL Of Frank Armstrong Book?
What's the URL of Investing for the 21st Century?
Shirley Humphrey
------------------------------
Date: Thu, 5 Jun 1997 21:24:59 -0400 (EDT)
From: "Charles A. Wilmot" <cwilmot@azstarnet.com>
Subject: URL Request - Auto Routing, Residence Locating Programs
Overtime I have collected several good "auto routing" and "residence
locating" programs, all of which were either shareware or freeware.
Unfortunately, I accidentally deleted my Bookmarks and am unable to recall
the names of these programs. Can anyone help me?
Chuck Wilmot
cwilmot@azstarnet.com
------------------------------
Date: Thu, 5 Jun 1997 21:25:43 -0400 (EDT)
From: MoneySecre@aol.com
Subject: Journalist Looking For People Retiring Early
I am a journalist working on a story about early retirement. I'd like to
interview someone between age 60 and 64 who plans to retire this year. The
focus of the article will be what decisions you have to make regarding health
insurance, pension plan payouts, Social Security and other benefits.
If you're interested, please e-mail me directly at MoneySecre@aol.com
Thanks in advance.
- --Stephanie Gallagher
------------------------------
Date: Thu, 5 Jun 1997 21:27:35 -0400 (EDT)
From: MoneySecre@aol.com
Subject: Banks Allow Transactions on Closed Credit Card Accounts
I just had an interesting experience, and I wondered if anybody else has
been through this. I closed a credit card account with First Chicago more
than 8 months ago. Last week I received a statement, which had a
transaction on it dated 5/11/97. The transaction was a mistake, which the
merchant has agreed to refund, but when I asked the bank why they allowed
it to go through on a closed account, they said, "Oh we allow transactions
to go through 6-12 months after an account has been closed in case the
cardholder wants to reopen it."
When I asked how the bank protects its customers from potential fraud
(especially since in this case, the customer has presumably cut up his
credit cards), they said that as long as the transaction was "authorized"
it will go through. Apparently, any merchant to whom you've given your
credit card number EVER can initiate an "authorized" transaction. That
was what happened in my case.
Of course, you assume you're dealing with companies that can be trusted, and
in my situation, the merchant did, in fact, rectify the problem. But what
was scary to me was that I had given them this credit card number 2 - 1/2
years ago!
When I asked why I couldn't just close the account and have no transactions
go through, I was told that the only way to do that was if the card had been
lost or stolen.
Does this seem odd to anyone else but me?
- --Stephanie
------------------------------
Date: Thu, 5 Jun 1997 21:29:32 -0400 (EDT)
From: mikemore@juno.com (Michael E Morehouse)
Subject: Free e-mail?
I use a free e-mail service called Juno. It does not require web or
internet access just Windows and a modem. One drawback is that I used to
be able to access it from my computer at work using a toll free number
but recently Juno dropped the toll free number and now I have to make a
toll call. If I want to get my e-mail at work, this means I have to make
a long distance call using the Company lines which I don't feel right
doing.
Is anyone out there aware of any similar type services that use toll free
numbers but do not require web or internet access?
I've e-mailed Juno and expressed my displeasure with the decision to
eliminate the toll free number but they never responded.
I have web access here at work so I can use one of the free Web based
services like Bigfoot or Hotmail but due to our internal network setup
here at work, I have to exit our network and reboot from my local drive
to access the Web.
This is a time consuming process when I may need to check e-mail twice a
day but I will probably have to do this rather than use the Company
lines.
Any ideas or help would be appreciated.
Thanks
Mike Morehouse
mikemore@juno.com
------------------------------
Date: Thu, 5 Jun 1997 21:32:31 -0400 (EDT)
From: Anonymous
Subject: Followups to "Family Finances" post
Hi Ira,
I've had some time to digest the responses to the original
post, and have some followup items.
Thanks again for letting me do this anonymously!
Here 'tis:
In response to my post titled "Would like feedback on my financial
situation",
Jackson, Anthony D. <JacksAD1@central.ssd.jhuapl.edu> responded:
>* Be more aggressive, especially with retirement, you still have a
least
>20 years. 30% fixed is probably too much at this point. Move some of
>that money to equities.
Agreed. Convincing my spouse of this may take some doing, however.
>* Get some level premium term insurance. You can get 20 yr/$500K
for
>about $400.00 per year. Check the web for Quickquote, Bestquote,
>QuoteSmith etc.
Also high on my list. There isn't much room in our cash flow for this
right now, would it be better to cut funding for the college fund,
retirement, or the emergency fund to accomplish this? My answer
would be the college fund, but I'm interested in other responses.
>* See if you can get disability insurance through one of your
>professional organizations. You didn't mention your profession but each
>of you need about 70% if you can't work.
Again, cash flow problem, same as above.
>* Pay off that insurance load. What's the purpose?
It was used to purchase a Micron Pentium with lots of bells and
whistles.
I'd rather prepay the mortgage first, since the rate on the life loan is
only 4.75%.
>* Take advantage of the IRA both you and spouse even if its
>non-deductible.
Absolutely. I'm putting in the max $2000, my spouse still has room
to put more into the 401k, which should come before another IRA.
I hate to keep falling back on cash flow, but we're doing what we can
with what we have.
>* Great start on the kids college funds. Suggest you do
semi-annual
>payments. It just gives you less transactions to calculate down the
>road.
What transactions do I have to calculate later? I'm paying capital
gains
transactions year by year. Are you referring to selling specific shares
rather than using an average cost method for calculating purchase price?
Also, couldn't making semi-annual deposits instead of monthly ones
possibly decrease the benefits of dollar cost averaging, or is this
negligible when considered in light of the 16 to 18 year horizon?
>* Do the Big Picture on all your investments. Use excel
spreadsheet and
>make a pie chart which shows the precentage of each type of investment
>(ie. fixed, balanced, Growth, Aggressive Growth, etc). Compare this
>with where you want to be at your age. You can get one of those
>questionairs from any of the mutual fund companies that will show you
>what your distribution should be.
I do this with Excel, and am reasoably satisfied with the current
asset allocation. Remember, *I* might prefer to be a little more
aggressive, but my spouse differs. We have to tread the line.
>I think that's more than 2 cents.
And well received, thank you!
Louis J. Schwarz, CFP, RFC <sfc@clark.net> replied:
>>1. Are we assuming too much risk in our retirement and
>>college funds? Too little?
>What retirement income would you like to have if you retire today?
Also,
>what inflation rate would you like your retirement income be based at?
Probably about 60 percent of current income. When I run the various
financial calculators (they always tell me I'm WAY behind!), I use
four percent for the inflation figure. Is that reasonable, or too
conservative?
>>2. Are we saving enough for college for our two kids?
>Also, same thing with college funds? What amount would you like to
>reach for each kid? and how long before each kid attends the college?
Enough to put them through a BS or BA program at a state school.
Time horizons are 18 and 16 years. If they should choose not to
attend college, I guess my spouse and I can decide what to do
with the money then.
>>3. Should we suspend our contributions to the aggressive
>>growth mutual funds for a few months and bolster our
>>emergency cash reserve?
>How much would you like your emergency fund to be?
At least three months expenses, roughly $10,200. Six months
would be better, of course. When I look at our liquid assets,
we have over 3 months expenses, but we'd have to sell some
funds to do that, which would incur gains taxes and might also
occur at a market downturn. Realizing that the fund money
will be there in the event of emergency helps me sleep a little
better, although I probably should not consider the funds
part of the emergency stash.
>>4. Should we suspend our contributions to the aggressive
>>growth mutual funds for a few months to pay down the
>>second mortgage? If so, should this come after we have
>>the recommended three to six months expenses saved?
>Cannot comment without looking at your previous and projected tax
>returns.
OK, fair enough. I was just trying to gauge whether the
emergency fund should take precedence over paying down
the mortgage. We're both employable and have good job
security. Of course, when times are good, the emergency
fund is viewed as less important...
>>5. Is there ANY way at all to shift money from those funds
>>that are not meeting my expectations to funds that may do
>>better, without incurring gains taxes? (Funds other than
>>401k and IRA, I know I can churn those as much as I want.)
>Other than retirement or deferred plans, there is NO way to shift from
>one fund or investment to another without selling and buying (same
thing
>with transfer or exchange).
That's what I thought. Bummer.
>>6. Any major mistakes I'm making here?
>Yes, too much in fixed or non-equity income securities - however,
cannot
>comment without knowing your goals, your expected cost of living rate,
>and time frames, etc. Also, very underinsured - not enough to provide
>income gap for kids - must purchase life insurance as soon as tomorrow
>because you never know what happens to your life tomorrow and what
could
>your kids face without you! You have not mentioned about estate
>documentation (will, power of attorney, guardianship for kids, etc.)
Yes, I realize I'm underinsured, but as stated above, we don't have
the extra cash, and I'm unsure what to cut to free up cash to pay for
insurance. We each have a durable power of attorney naming the
other as executor. We have wills, but they were written when we
were newly married. We've since had kids and bought a house, so
I know we need new wills. Reciprocal guardianship of the children
has been discussed fleetingly with relatives, but nothing is in writing.
Thanks again to those who responded.
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End of persfin-digest V4 #44
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