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Subject: persfin-digest V4 #48
Date: Tue, 17 Jun 1997 20:21:21 -0400 (EDT)
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persfin-digest Tuesday, June 17 1997 Volume 04 : Number 048
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX BROADCAST SERVICE [Oppenheimer Software <Connect_]
Re: Did they ever approve higher indiv IRA limits? ["Cal Lester C.L.U."]
Re: Budget Percentages [Les Moskowitz <lmoskowi@mail.bcpl.lib.md.us>]
[none] [hrj@juno.com (Harold R Justice)]
Re: Budget Percentages? ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
re: TIAA-CREF's Tax Exempt Status ["Louis J. Schwarz, CFP, RFC" <sfc@clar]
Re: Repeal TIAA-CREF's tax-exempt status? [Bill La Mar <blamar@dialnet.n]
Re: "Spiders"? [Rich Carreiro <rlcarr@animato.pn.com>]
RE: Tax Treatment of "SPDRS" ["David J. Churchill" <churchilld@worldnet.a]
Fidelity Investments "Portfolio Review"? [Keith Mealy <kmealy@cincom.com>]
Re: Budget Percentages - No Tithing Category [ktjensen@juno.com]
Re: Budget Percentages ["pasta::horton"@asdg.ENET.dec.com]
Re: Did they ever approve higher indiv IRA limits? [David Meyers <dmeyers]
comparing satellite TV services ["Dalmia, Bipin K." <DALMIABK@phibred.com]
Response to Chuck Wilmot (Web Map Sites) [Mike Morehouse <mikemore@rocket]
Re: Auto Routing & Residence Locating Programs? [Brennan Dell <Brennan_De]
Tax free investments - When To Start? [tcruz@calicotech.com (Tito Cruz)]
Re: Car Loan Refinancing [couellet@sun004.atm.dsccc.com (Chris Ouellette)]
Mutual Fund Tracking/Managing Shareware or Software [Mike Morehouse <mike]
Life Insurance Questions [taylor.hs@pg.com]
Cellular/Wireless/PCS Service [cboyles@juno.com (Carolyn V. Boyles)]
A bank to replace Fleet? [Mike Machnik <machnik@tiac.net>]
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Date: Tue, 17 Jun 1997 19:51:56 -0400 (EDT)
From: Oppenheimer Software <Connect_Sales@mcimail.com>
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------------------------------
Date: Tue, 17 Jun 1997 19:53:00 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@msn.com>
Subject: Re: Did they ever approve higher indiv IRA limits?
Does anyone know the current status of the legislation that potentially
will raise the individual deductible IRA amount to $4000? Does it look like
it's gonna make it? Maybe even retroactively a year or so?
>>>> It was put into LAW as part of the Kennedy Kassenbaum Bill ( I
forget the technical name ) and is currently in effect for 1997 &
thereafter. Therefore you can make a contribution of up to $2,000 for a
Non - Working Spouse for the Tax Year of 1997 ( when you file in 1998 ).
>>>> No it is NOT retroactive at all......
------------------------------
Date: Tue, 17 Jun 1997 19:53:50 -0400 (EDT)
From: Les Moskowitz <lmoskowi@mail.bcpl.lib.md.us>
Subject: Re: Budget Percentages
> Some time ago, someone posted a chart which showed what percentage of
> your income should go to what expenses in your life. My question is,
> is this chart representing income before or after taxes are taken out?
>
> Auto - 12.0%, Housing - 34.0%, Entertain/Rec - 5.0%, Clothing - 5.0%
> Healthcare - 4.0%, Misc - 5.0%, Food - 12.0%, Insurance - 5.0%
> Debts - 5.0%, Savings - 5.0%, Invest - 8.0%
I'm not sure if this was meant as a serious question or as a joke.
If it was meant to be serious: If you add up those percentages, the
total is 100%. Unless you don't have to pay taxes, those percentages
better relate to income after taxes are taken out.
Les
------------------------------
Date: Tue, 17 Jun 1997 19:55:13 -0400 (EDT)
From: hrj@juno.com (Harold R Justice)
Subject: [none]
If the interest is simple interest and there is no penalty for extra
payments then each extra payment lowers the principal on which the
interest is calculated. What you should do is borrow the extra $1000 to
lower your interest rate and then immediately pay the $1000 loan with the
money you just received. That way you are not paying interest on the
extra $1000. The additional payment on the new loan should be around $25
per month which is not significant if you occassional have an extra $1000
to put on your loan.
Harold
>I would like know opinion of fellow persfiners on this situation. Should
>I refinance the loan to 7.75% by taking extra $1000 or just continue
>with my present payment at 8.5%?
------------------------------
Date: Tue, 17 Jun 1997 19:55:48 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Re: Budget Percentages?
It is an "after-tax" situation because I see no percentage on the list
to be allocated for income taxes.
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: Tue, 17 Jun 1997 19:56:37 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: re: TIAA-CREF's Tax Exempt Status
>from: Patrick Meighen <pmeighen@wvu.edu>
>Subject: Repeal TIAA-CREF's tax-exempt status?
- --
Is it fair to other annuity/insurance companies who pay taxes while
TIAA-CREF gets a special exception?
How can there be a fair one to everyone???
------------------------------
Date: Tue, 17 Jun 1997 19:58:32 -0400 (EDT)
From: Bill La Mar <blamar@dialnet.net>
Subject: Re: Repeal TIAA-CREF's tax-exempt status?
I believe that you will find that TIAA/CREF's statement at the top of
the message is true. The explanation in the body of the message is false
and misleading at best. It may be a blatant lie trying to get people
riled up about TIAA/CREF having to play on the same field as every other
provided of 403b services. There appears to be nothing in the bill that
in any way affects the tax advantages of the clients 403b accounts. It
will just mean that TIAA/CREF will have to pay taxes on the "profits"
that they claim do not exist on handleing of 403b accounts. Almost
without exception every other insurance or mutual fund company that
handles 403b accounts pays income tax. These companies rates are very
competitive with TIAA/CREF. What TIAA/CREF is paying is some very large
salaries which they appear to be trying to protect with this emotionally
charged statements.
- --
Bill La Mar, Springfield, MO
------------------------------
Date: Tue, 17 Jun 1997 19:59:14 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: "Spiders"?
>Anyone with thoughts on tax treatment of SPDR's (Standard and Poor's
>Depository Receipts) sold on the AMEX? Specifically, is the prospect of
>small realized capital gains such that one could achieve a high degree of
>capital gains tax deferral by buying and holding over the long haul?
The tax treatment of SPDRs is fairly simple and is basically the same as
a mutual fund:
* The dividends paid by the underlying stocks are paid out to SPDR shareholders
quarterly. You'll have to pay tax on those.
* Any net realized capital gains resulting by turnover in the underlying
stocks (for example, when S&P changes the index composition) is distributed
out as a capital gain distribution. You'll have to pay cap gains tax
on that.
* Finally, you'll have whatever gain or loss you have when you sell the
SPDRs yourself.
SPDRs and index funds will behave very similarly tax-wise when cash
flows into the index fund are neutral or positive, since the fund
won't have to liquidate any stock to meet redemptions and therefore
the only turnover will come from changes in composition. However,
when cash flows are negative, the SPDR will be more tax-efficient
since the fund will have to sell stock (thereby realizing gains which
will have to be distributed) to meet redemptions. That won't happen
with a SPDR.
You may wonder what the difference is between a SPDR and a
hypothetical closed-end fund that holds the SP500 index. In some
senses not very much, but in an important manner they differ greatly
- -- unlike a closed-end fund, SPDRs will not trade at an appreciable
discount or premium to their intrinsic value. Why? Because one (in
actuality only institutions) can hand over a SPDR to the custodian and
get the actual SP500 stocks in return. One can also hand over the
SP500 stocks to the custodian and get a SPDR. So if the price of the
SPDR starts to get out of whack relative to the SP500 stocks, there
will be massive arbitrage flows that will bring the prices back into
line, wiping out any SPDR discount or premium.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Tue, 17 Jun 1997 20:01:17 -0400 (EDT)
From: "David J. Churchill" <churchilld@worldnet.att.net>
Subject: RE: Tax Treatment of "SPDRS"
I would think "spiders" are very tax-efficient because you don't pay any
appreciable taxes on them until they're sold (assuming you have a gain).
The taxable dividend distribution on these would be very small every
year.
Regards,
Dave Churchill
------------------------------
Date: Tue, 17 Jun 1997 20:04:22 -0400 (EDT)
From: Keith Mealy <kmealy@cincom.com>
Subject: Fidelity Investments "Portfolio Review"?
In the mail I got an invitation to come down to the
local Fidelity Investor's Center to have a "Portfolio Review"
with a Financial Representative. Has anyone ever done this
and can tell me what to expect from this session?
(Editor's Comment - I've noticed that Fidelity and Schwab, who previously
avoided advising customers on their portfolios, seem to be getting into
the financial planning business. Does this bother any financial planners
among us? Is this undercutting the CFP community, which also uses
Fidelity and Schwab to execute financial plans? Are Fidelity and Schwab
acting as "full service" brokers? -IK)
------------------------------
Date: Tue, 17 Jun 1997 20:04:55 -0400 (EDT)
From: ktjensen@juno.com
Subject: Re: Budget Percentages - No Tithing Category
I think the percentages are after taxes. I noticed their was no TAXES
category. Also their is no TITHING category. Many people considering a
10% tithe to the church as mandatory, its true !!
------------------------------
Date: Tue, 17 Jun 1997 20:05:40 -0400 (EDT)
From: "pasta::horton"@asdg.ENET.dec.com
Subject: Re: Budget Percentages
Robert,
Since these percentages of income add to 100%, it would appear they are
applied to after-tax income, i.e., after deductions for all income taxes
and for Uncle Sam's social, er, security and Medicare taxes. I suspect
the housing expense has some provision for real estate tax built in.
Non-tax items that are deducted from your paycheck such as health care,
insurance, savings (including 401k) would be included in the percentages.
The housing percentage seems high. Also, where does auto insurance appear,
in the Auto category or in Insurance? Finally, what is the distinction
between Savings from Investments?
- -Jerry
------------------------------
Date: Tue, 17 Jun 1997 20:07:57 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Did they ever approve higher indiv IRA limits?
>Does anyone know the current status of the legislation that potentially
>will raise the individual deductible IRA amount to $4000? Does it look like
>it's gonna make it? Maybe even retroactively a year or so?
They did raise it, but not for single, individuals. For any
given _individual_, the limit is still a measly $2000. What
they did raise was the ability for a NON-working _spouse_
to put in $2k, even if said spouse did not earn that much.
That raised the limit for a single-earner couple from $2250
to $4000.
- --D
------------------------------
Date: Tue, 17 Jun 1997 20:08:56 -0400 (EDT)
From: "Dalmia, Bipin K." <DALMIABK@phibred.com>
Subject: comparing satellite TV services
hello all: is there some place on the net that compares costs and
services of all the major satellite TV service providers? e.g.
PrimeStar, DirectTV etc. etc.
thanx, bip
------------------------------
Date: Tue, 17 Jun 1997 20:10:06 -0400 (EDT)
From: Mike Morehouse <mikemore@rocketmail.com>
Subject: Response to Chuck Wilmot (Web Map Sites)
Chuck,
Here are some URL's for some map sites I know of. If this doesn't
help, e-mail me again and I'll see if I can help.
Mike Morehouse
mikemore@rocketmail.com
http://www.mapquest.com/cgi-bin/ia_find?screen=mqhome&link=ia_find&no_map=true&uid=908a1p5030andzw&banner=select
http://www.mapsonus.com/
http://www.vicinity.com/yt.hm?CMD=MAP&FAM=yahoo&SEC=geo&MA=1&GC=X:-84.38504|Y:33.77245|LT:33.77245|LN:-84.38504|LS:20000|c:Atlanta|s:GA|z:30308&IC=33.77245:-84.38504:555:&GAD2=660+Peachtree+St+Ne&GAD3=Atlanta%2c+GA&LC=1&LV=1
http://EXPEDIA.MSN.COM/daily/home/default.hts?
Mike Morehouse
Opelika, AL
------------------------------
Date: Tue, 17 Jun 1997 20:10:58 -0400 (EDT)
From: Brennan Dell <Brennan_Dell@dell.com>
Subject: Re: Auto Routing & Residence Locating Programs?
Regarding cwilmot@azstarnet.com's posting on shareware programs that
help you locate addresses and provide maps. I don't know any "free" or
shared programs that do this but there are at least two excellent
internet sites that can help you. Try www.infospace.com which provides
maps to anyone's house who has a phone number (scary isn't it?) and
www.mapquest.com that finds locations worldwide.
B. Dell
Austin, TX
------------------------------
Date: Tue, 17 Jun 1997 20:11:35 -0400 (EDT)
From: tcruz@calicotech.com (Tito Cruz)
Subject: Tax free investments - When To Start?
Is there a particular income level at which one should start considering
tax-free mutual funds and the like? I believe I heard of this years ago,
but it wasn't a concern at the time and am wondering if it should be a
concern now.
Thanx.
------------------------------
Date: Tue, 17 Jun 1997 20:16:26 -0400 (EDT)
From: couellet@sun004.atm.dsccc.com (Chris Ouellette)
Subject: Re: Car Loan Refinancing
>
> In the mean time, I also want to try and pay back the loan as soon as
> possible. I may not be able to afford a bigger monthly payment, but I
> plan to make a bigger payment of say $1000 once in a while whenever I
> feel comfortable with my bank balance.
>
> I would like know opinion of fellow persfiners on this situation. Should
> I refinance the loan to 7.75% by taking extra $1000 or just continue
> with my present payment at 8.5%?
>
I did this very thing several years ago. The extra $1000 is yours to do
with as you please. In my case I used it to pay my loan back down to its
original amount.
This resulted in a $0 cost refinance. I also adjusted to period so that
the car would be paid off earlier that it would have been with the
previous loan. It worked out well for me.
Chris Ouellette
Standard disclaimer applies.
------------------------------
Date: Tue, 17 Jun 1997 20:17:01 -0400 (EDT)
From: Mike Morehouse <mikemore@rocketmail.com>
Subject: Mutual Fund Tracking/Managing Shareware or Software
Does anyone have any recommendations of available software - shareware
or commercially available - that helps one manage one's mutual fund
investments.
I am looking for feature like entering buy sell dividend reinvest
transactions; graphs of investment and total portfolio value; returns,
asset allocation options; etc.
If anyone has had good experience with a package that would do this,
please respond to me at mikemore@rocketmail.com
Thanks,
Mike Morehouse
mikemore@rocketmail.com
------------------------------
Date: Tue, 17 Jun 1997 20:17:48 -0400 (EDT)
From: taylor.hs@pg.com
Subject: Life Insurance Questions
Help! I find insurance pretty confusing. Can I get some advice on whether
to keep paying premiums on a life insurance policy or to bail out and
invest the money elsewhere?
We purchased a Universal Life Insurance policy in 1985 and our monthly
premium is $50 of which about $37 is actually deducted for the insurance
cost. The current interest rate is 6% with a guaranteed interest rate of
4%. Total premiums paid to date are $7,300 and the current account value
is $3,300. I am insured with benefits of $132,000 and my husband is
insured as a rider with benefits of $106,000. I am a 39 year old
non-smoker and my husband is a 42 year old non-smoker. Some medical
problems over the last 10 years would probably make him a high risk for
purchasing other insurance on his own. We also both have very good life
insurance coverage through our employers. We need life insurance, we have
3 children under the age of 12.
When I compare the premiums for this coverage with term, it seems like we
are getting a good value. Should we cash out? Or should we stop paying
any excess over the cost of the insurance and direct it elsewhere (it's
only $13 a month)?
Thanks!
------------------------------
Date: Tue, 17 Jun 1997 20:18:21 -0400 (EDT)
From: cboyles@juno.com (Carolyn V. Boyles)
Subject: Cellular/Wireless/PCS Service
I am doing research on Cellular/Wireless/PCS service. If anyone would
care to e-mail me with their opinions about heir service provider or
their service provider's competitor, I would appreciate it. Anything you
want to discuss would be fine with me. I don't want any personal
information. The only thing that would be helpful is to know where you
live (city, state).
Carolyn Boyles
CBoyles@juno.com
------------------------------
Date: Tue, 17 Jun 1997 20:19:29 -0400 (EDT)
From: Mike Machnik <machnik@tiac.net>
Subject: A bank to replace Fleet?
Hopefully this will help a number of other people out there who are in the
same position I am in.
We received a letter from Fleet Bank today detailing the bank's plan to
convert all Partnership accounts to Fleet One accounts. The Partnership
account was a combined account that Shawmut had back before the
Shawmut-Fleet merger, and allowed you to waive monthly fees with combined
balances of $3,000 or more in all linked accounts.
Fleet allowed those former Shawmut customers to grandfather their
Partnership accounts under the same guidelines, but I recall a number of
mailings in which they tried to convince people to switch to the Fleet One
account which requires a minimum combined balance of $10,000. This was a
lousy deal, so we didn't bother with it, and I expect many other people did
too.
Now Fleet says that effective August 15th, all Partnership accounts will
convert to Fleet One accounts and be subject to the same $10,000 minimum
(or else you pay a $14 monthly fee, $12 with direct deposit). Among the
accounts that can be linked together into Fleet One are: checking, savings,
money market, Fleet brokerage, Fleet mutual funds, CDs, IRAs, loans (not
student loans, mortgages, or U. Plan savings accounts for college tuition),
and Fleet credit cards.
There is also a Fleet Plus account, combined minimum $5,000, but it only
includes checking, savings, and money market accounts. Fees are $12, $10
with direct deposit. Still $120/year with the latter.
Obviously if you don't meet the minimums, this is a bad deal. (ironically
Fleet trumpets the change on the envelope by saying "Your Fleet account
just got better" - wrong.)
As long as they didn't force people to switch to the new minimums, Fleet
was a good choice for us - many locations, many ATMs, etc., but now that
this change is about to go into effect, it's time to put our money
elsewhere.
Does anyone have a suggestion for a bank we should look into? The credit
union at work doesn't seem to meet our needs. Things we are interested in
and that are particular to our situation:
* Residents of southern New Hampshire.
* Make in-person deposits about 3-4x per month (thus a somewhat local
branch office is important - southern NH or northern Mass.).
* Use ATMs for withdrawals about 10x per month, thus don't wish to pay ATM
access fees. Somewhat widespread ATM access would be a big plus, at least
in southern NH and northern Mass., perhaps also in upstate NY.
* Will set up direct deposit of payroll checks.
* No monthly fees for combined balances of approximately $3,000 or more.
* Wish to set up automatic withdrawal for about 3-5 monthly bills.
* Allow linking of money market mutual funds to meet combined minimum.
* No-fee overdraft protection.
* Debit card on checking account.
Technically we could transfer money from other brokerage accounts or mutual
funds to Fleet to meet the Fleet One minimum, but we're perfectly happy
with our current broker and other funds and don't wish to move that money.
And we don't carry balances on credit cards and use cards that pay us cash
back (Fleet cards do not), so the fact that Fleet allows the linking in of
those accounts doesn't help us either.
Unfortunately, it almost seems that with the way things are going lately in
the state of banking, there may not really be any good choices (and there
are fewer and fewer choices, it seems), but I'm hopeful. I'd also be
interested to hear of others who are looking into switching banks because
of Fleet's changes.
Thanks,
- ---
Mike Machnik
machnik@tiac.net
------------------------------
End of persfin-digest V4 #48
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