Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #60
Date: Thu, 17 Jul 1997 22:52:29 -0400 (EDT)
Articles sorted by: [Date]
[Author]
[Subject]
persfin-digest Thursday, July 17 1997 Volume 04 : Number 060
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX BROADCAST SERVICE [Oppenheimer Software <Connect-]
The Motley Fool [Samuel Krakow <krakow@mail.med.upenn.edu>]
Re: Re: VUL vs. Term Insurance [John_Mahony@lamg.com (John Mahony)]
Re: Re: VUL And Reserves [John_Mahony@lamg.com (John Mahony)]
Re: PhD vs Bachelor's ["Lester M. Levy, MD" <llevy@hoflink.com>]
Re: Three types of accounts ["Lester M. Levy, MD" <llevy@hoflink.com>]
Inheritance Tax Question [Tom Gaffney <tgaffney@kent.edu>]
DRIP Gift of McDonalds ["Brion G. Patterson" <bpatters@pen.k12.va.us>]
Cap-Gainer No-Brainer [Randy Barnes <rbarnes@atl.mindspring.com>]
Re: Investment Club Posts [Randy Barnes <rbarnes@atl.mindspring.com>]
Re: Money for College [hrj@juno.com (Harold R Justice)]
Re: Any Experience With Citizens Bank? [feren@ctron.com (Andrew C. Feren)]
RE: How Can One Make Small, Regular Investments? [Jeff Morgan <Morgajs@pa]
Another Inheritance Tax Question [Tom Gaffney <tgaffney@kent.edu>]
Banks, Debit Cards, Etc... [Russell J Foster <rjf@mcs.net>]
College SAT's and Financial Aid [AINITGR8@aol.com]
Re: Does a Debt Die With You? ["Mark J. Welch, Esq." <markwelch@ca-probat]
Re: Money for College? [Rich Carreiro <rlcarr@animato.pn.com>]
Re: Three Types of Accounts [Rich Carreiro <rlcarr@animato.pn.com>]
Re: Money for College? [David Martin <dmartin@seabreeze.hc.ti.com>]
Consumers Report for kids [jpoulter@islandnet.com (Jack Poulter)]
RE: Information Needed for Elementary School Economics Projects ["John S.]
Cellular phones - Looking to Buy [eric <eric_marcus@compuserve.com>]
Re: Money for College? [Jim McGrath <jimm@hi.com>]
Re: Money for College [WDStancil@aol.com]
Bob Ford's question on Money for College [vschmitz@creighton.edu]
Capitalism, Price, Regulation and Choice [Susan Mangiero <mangiero@shu.sa]
Best Strategy for IRA Payements? [Joe Cabrera <toonhead@tiac.net>]
re: Information Needed for Elementary School Economics Projects [Fred Sch]
Oedipus vs. Socrates [bridges@en.com (James & Anita Bridges)]
Calculating year-to-date returns? [eric <eric_marcus@compuserve.com>]
Re: Money for College ["L. Chen" <am302@freenet.buffalo.edu>]
====================================================================
Neither Ira Krakow nor Persfin-Digest is responsible for the content
of any Persfin-Digest Sponsor Ad. Posting a Sponsor Ad does not
indicate endorsement of the product or service by Ira Krakow or
Persfin-Digest. You're on your own.
This issue is sponsored by:
Oppenheimer Software - An Official MCI Messaging Agency. Features:
MCI Fax Broadcasting Service
MCI Fax Reply Service
MCI Connect for cc:Mail
MCI AutoForward
internetMCI
Lan Access to MCI
Telephone: 800-390-9379
FAX: 800-492-6862
E-Mail: Connect-Sales@mcimail.com
Also sponsored by Wholesale Products. Why pay retail?
Specialists in HP320LX palmtops - the hot new HP palmtop that runs
Windows CE. Pocket versions of Internet Explorer, Excel, and Word are
included. Connectivity to PC applications. It's in stock and
orderable. Price: $689 + $19.95 shipping (in USA).
Visit our PAL/NTSC/SECAM electronics site, featuring VCRs, converters,
TVs, appliances, etc., geared to the international marketplace, at:
http://www.wholesaleproducts.com/non-usa.html
Calculators:
HP 48GX: $180.28 + s&h
HP 48G: $ 91.78 + s&h
JVC GR-DV1 Camcorder Now Reduced to $1695.95. PAL Version $1699.95.
Visit our Blank Videotape Kiosk at:
http://www.wholesaleproducts.com/videotapekiosk.html
Visit our newly updated and expanded Web site, at:
http://www.wholesaleproducts.com
Special Orders: wholesal@shore.net
Phone: 1-800-574-7253 (9am - 5:30pm Boston time)
Fax (24 hrs): 617-438-8307
For information on placing a Persfin-Digest Sponsor Advertisement, e-mail
ikrakow@shore.net
====================================================================
Persfin Digest Archive (maintained by Ameristock Mutual Fund):
http://www.ameristock.com and
http://www.ameristock.com/pda/persfin_home.htm
Ira Krakow's Mall: http://www.krakow.com
Personal Finance Web Sites: http://www.tiac.net/users/ikrakow/pagerefs.html
To post a question or an answer, send email to: persfin-digest@shore.net
The messages posted to the Persfin-Digest are opinions and are not
intended to substitute for qualified professional advice. Subscribers
should seek the services of qualifed professionals for such advice. The
publisher, Internet provider, advertisers, and Digest contributors cannot be
held responsible for any loss incurred as a result of the application of any
of the information provided here.
Copyright (c) 1995, 1996 Ira Krakow
REQUESTED SUBSCRIPTION FEE: $20/year. Monies will go directly to defraying
publication costs, compensating for the time and effort of the Publisher,
and enabling the Publisher to create additional useful sources of
information on the Internet. Send cash, check, or money order (U.S.
funds), payable to "Ira Krakow", to:
Ira Krakow
12 Clearview Road
Stoneham, MA 02180-1918
Contribution will be acknowledged by e-mail if you include an e-mail address.
To Subscribe: e-mail majordomo@shore.net, text: subscribe persfin-digest
To Unsubscribe: e-mail majordomo@shore.net, text: unsubscribe persfin-digest
----------------------------------------------------------------------
Date: Thu, 17 Jul 1997 21:53:18 -0400 (EDT)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: MCI FAX BROADCAST SERVICE
MCI Fax Broadcast Service
A High Volume, Very Low Cost, Fax Broadcasting Service
Send 50, 500 or 5000:
Newsletters, Catalog Revisions, Late Changes, Political
Announcements, Product Updates/Recalls, Legal Class Action
Notifications, Special Events, Party Invitations, Bids,
New Rules/Regulations, Advertisers Deadlines, Investor
Relations, Portfolio Advisories, Contract Opportunities
...in minutes, using your Fax Machine or Delrina WinFax Pro
Secure and Private
Free List Management Software
Cost Allocation/Accounting Reports Available
Automatic Retries on Busy Fax Numbers - up to 24 Hours
Toll Free 24X365 Customer Support for those Late Night Jobs
Low Cost List Conversion Services available (dBASE, ACT!, and more)
Rates as Low as $.17/minute (domestic) Off Peak for Select Customers
Oppenheimer Software Authorized MCI Messaging Agency
Tel:800-390-9379 E-Mail:Connect-Sales@mcimail.com
Fax:800-492-6862
------------------------------
Date: Thu, 17 Jul 1997 21:54:59 -0400 (EDT)
From: Samuel Krakow <krakow@mail.med.upenn.edu>
Subject: The Motley Fool
Like many people who have decided to make their own investment
decisions rather than leaving them to the Wise men of Wall St, I am a
follower of TMF. I admire their simple approach. People should take
control of their finances by making their own choices. I've found this
method rewarding. I used to fear the stock market. I didn't understand
the correct methods involved in researching a particular stock. (My dad
can attest to my investment history in the market.) TMF showed how to
judge a company's value, previous performance, and finanical history.
I also have learned the simplest lesson involved in equities trading, No
matter what method you use (ie. Foolish Four, Unemotional Value, etc.),
stick to it over the long haul and ignore the temptation to time the
market. Try to be consistant in your approach and your chances for
success will have a good chance against the performance of professionals
on Wall St.
Thanks Dad,
Sam
------------------------------
Date: Thu, 17 Jul 1997 21:56:00 -0400 (EDT)
From: John_Mahony@lamg.com (John Mahony)
Subject: Re: Re: VUL vs. Term Insurance
CL> Very simply, an Income Tax Deferred investment of any kind will
CL> grow faster and larger than any similar currently taxable
CL> investment over time.
The key word here is "similar." The statement above is true if both
investment vehicles have the same returns AND ALSO HAVE THE
SAME COSTS AND BOTH THE COSTS AND THE RETURNS ARE PAID
AT THE SAME TIMES.
CL> ...At some given point in time, the actual premium for the term
CL> policy in question, MUST surpass the original premium for the
CL> V/U/L policy...
Are you saying that there is no such thing as "Level-Premium Term
Insurance?" Or are you saying that "Level-Premium Term Insurance"
costs more than a V/U/L policy with the same death benefit?
CL> ...at which time (if you are doing a real apples & apples
CL> comparison) you would have to start to deplete the investment
CL> account to pay the DIFFERENCE to maintain the term policy.
Only if you want to throw out the baby in order to save the bath-
water. By the time this occurs, if the client has been half-way
successful with his (or her) investments, they will have grown
to such an extent that the term policy will no longer be needed.
John K. Mahony, M.B.A.
------------------------------
Date: Thu, 17 Jul 1997 21:56:50 -0400 (EDT)
From: John_Mahony@lamg.com (John Mahony)
Subject: Re: Re: VUL And Reserves
CL> Of course, all commissions are eventual paid by the purchaser.
That was my point, exactly!
CL> Is it morally wrong for a person to get paid for his labors???
Of course not. BUT, WHEN THAT PERSON IS PAID ON COMMISSION,
then there is a built-in incentive for him (or her) to sell THOSE
PRODUCTS WHICH PAY THE HIGHEST COMMISSIONS, even if those
products are not necessarily the best ones for the client.
CL> So called " no load funds " normally collect their fees in other
CL> ways, in order to compensate those people involved in the sale of
CL> the product.
THIS IS ANOTHER MISLEADING STATEMENT. You seem to imply that the
fees charged by no-load funds are equivalent to the fees charged
by load funds. We both know that this is not the case. While the
sales charges alone on front-end load funds may range up to 5.75%
(in addition to the management fees, administrative fees, possible
12(b)(1) fees, and brokerage commissions paid by the fund's share-
holders), one of the most popular no-load funds (Vanguard's Index
500 Fund) has NO front-end load, and has a total expense ratio of
only 0.20%, which includes ALL OF THE management fees, administra-
tive fees, and brokerage commissions paid by the fund's shareholders.
CL> The "premium" will be less, but the NET COST in every comparison
CL> that I have run is higher.
Every NET COST comparison made by a life insurance agent that I
have ever seen has ignored the "time-value of money."
CL> ...but in U/L, most are CURRENTLY paying 5 1/2 to 7 % INCOME TAX
CL> DEFERRED INTEREST.
And Vanguard's S&P 500 Index Fund is CURRENTLY* paying a total return
of 24.90%, most of which is INCOME TAX DEFERRED.
CL> EXCELLENT, why not buy it inside of a V/U/L ????
It is possible to buy it inside of a Tax-Deferred Variable Annuity
sold through Vanguard (1-800-662-7447), and you are right, that has
been an excellent choice for someone who had a need for that product,
mostly because, in keeping with Vanguard's overall philosophy, the
fees and expenses associated with the V/A have been kept as low as
possible. I don't know if Vanguard offers a V/U/L policy, but, if
they do, then that would be the one to buy. Otherwise, a person will
probably be better off buying a decreasing term policy and investing
the difference than they will by buying a V/U/L policy.
If someone thinks they need more of a tax deferral than an index
fund (or some combination of index funds) already offers, then
they can always combine Vanguard's Tax-Deferred Variable Annuity
with a separate decreasing term insurance policy.
John K. Mahony, M.B.A.
*YTD Total Return from 1/2/97 to 7/3/97
------------------------------
Date: Thu, 17 Jul 1997 21:58:27 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: PhD vs Bachelor's
In persfin-digest V4 #59, there is another message about the minimum
financial benefits achieved with a PhD over a bachelor's degree. These
messages show the weakness of aggregating data and looking only at
averages. People vary greatly in their prime interests, their skills and
how they maneuver through life. There are some like Bill Gates who never
finished college who are able to succeed financially and intellectually.
There are some PhD's who enjoy a quiet, non-agressive life and continue
more or less happily with a low intensity life. There are other PhD's,
more aggressive and perhaps talented who may leave academe and start up
companies with their skills of intellectual and managerial ability and
also may become fabulously wealthy. Some EE's after a few years of
corporate work, go on and earn MBA's and make out well in managerial and
financial circles.
Each person through an unique combination of personal intelligence,
leadership ability, drive, contacts and pure chance arrives at a different
outcome. Some strive for great heights, but may lose some features such as
a home life. Others are more than satisfied with a lower level of
accomplishment, but have a peaceful and satisfying, more complete personal
life.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Thu, 17 Jul 1997 21:58:56 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Three types of accounts
What's the difference between the following types of accounts for
>a married couple.
> o Joint account in tenancy
> o Joint account with Right of survivorship
> o Community property
>How does this treatment differ for
> o Simple checking and savings account (1099-INT)
> o Mutual fund accounts (1099-DIV)
> o Brokerage account for stocks (capital gains and dividents)
A joint account (in common) means that each person owns a share in the
asset in a fully separate fashion. If one dies, his heirs own that part
and their basis is the fair market value of the part at time of death. I
believe this ownership can be transferred by will. The other original
owner continues to own his share at his old basis.
A joint account with rights of survivorship (WROS) means that if one
dies, then the survivor takes all, and the decedent's heirs receive
nothing. The decedent's half has its basis stepped up to FMV at time of
death, and the other half remains as it was before.
Community property can exist only in a community property state and is
generally limited to two spouses (spice?). If one spouse dies, the other
owns the whole banana, BUT the entire basis is stepped up to FMV at time
of death of the decedent.
Generally, but perhaps not always, where possible community property
therefore has advantage over JT WROS. Joint tenancy in common has
different advantages where each wants to preserve his share for his
heirs... as perhaps in commercial real estate. But each tenant in common
has to realize that he may get along well with his present partner, but
may some day have different, not-so-congenial partners.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Thu, 17 Jul 1997 22:00:43 -0400 (EDT)
From: Tom Gaffney <tgaffney@kent.edu>
Subject: Inheritance Tax Question
We are currently in the process of settling the estate of a relative. The
estate consists of a home and two vehicles. We are selling the home and two
vehicles to unrelated third parties. My question is, after the proceeds are
distributed to the beneficiaries, does this money taxable to the
receipients? Also, does the estate have to pay taxes on the sale of the
home? The deceased was retired with no income for several years. Any help
will greatly appreciated! Thanks in advance.
Tom Gaffney
tgaffney@kent.edu
------------------------------
Date: Thu, 17 Jul 1997 22:02:40 -0400 (EDT)
From: "Brion G. Patterson" <bpatters@pen.k12.va.us>
Subject: DRIP Gift of McDonalds
I want to give one share of McDonalds stock as
a gift to my nephew Robert, from shares owned through
direct purchase-the agent holds the certificates.
How, step by step, would I get a certficate in Robert's
name in his hands?
- --
Brion
Rappahannock County High, Washington, VA
(Editor's Comment - McDonalds has one of the highest fees for a DRIP.
Beware of DRIPs that have fees for each trade. A $5 fee for a $50
investment is worse than a broker would charge. -IK)
------------------------------
Date: Thu, 17 Jul 1997 22:26:14 -0400 (EDT)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Cap-Gainer No-Brainer
> Subject: How Will Capital Gains Tax Law Changes Affect the Market?
>
> Does anyone think that the possible impending capital gains tax law
> changes could actually affect the market, because everyone is waiting to
> sell after they go into effect?
>
> I. Good
I.,
No doubt the market will rock with a cap gains cut. Anybody with a bit
of wealth tucked away in stocks (or real estate) is sitting on capital
gains awaiting the day they can sell without being robbed by Uncle Sam.
I know in the money I manage among family members that 65-70% of the
portfolios are untouchable due to tremendous gains that would be taxed.
Families with "real" money can and will let the gains ride for
generations before subjecting their money to unfair taxes.
When capital gains are finally cut there will be increased market
activity. Bigger cuts mean bigger action. Will it be up or down? Who
knows. If people with gains are selling then what'll they be doing with
the money? They'll be buying something; cars, stocks, beach houses and
who knows what.
IMHO I believe that the largest amount of money will be coming out of
the old money crowd that has been very successful in investing for their
future. This money will be pumped back into the market and will go into
the sector that IS the future, technology. Which companies? That's for
you to figure out.
- -Randy Barnes
------------------------------
Date: Thu, 17 Jul 1997 22:26:55 -0400 (EDT)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Re: Investment Club Posts
> From: "Timothy A. Budd" <budd@owl.csusm.edu>
> Subject: On-Line Broker for Investment Clubs
>
> I am seriously thinking about starting an investment club. I've already
> taken a look at the NAIC webpage, and am already starting to gather that
> information. However, with respect to selecting an on-line broker, I need
.......
....On another, but related, note - is anybody out there interested in
> forming an investment club? If anybody would like to enter into
> discussions regarding the possibility of investment club
> investing, feel free to send e-mail.
>
> Andrea
Tim, Andrea et al,
Don't go rushing to an online line broker just to help in portfolio
tracking. An investment club especially needs a person that can assist
your group with ideas and information. I recommend that you get a real
live broker in a national firm to handle your account. They should have
no problem in agreeing to reduce their commission structure
considerably. Their assistance and resources are extremely important to
a club. You'll be hard pressed to get a pro to "sing-and-dance" at a
group meeting if you're trading on'line.
I am involved in a group we call "ASSET Atlanta" (Ass'n of Strategic
Stock Equity Traders). We do not invest money together as a club, but we
meet once a month to discuss our strategies and study the markets. I've
met well over 50 people in this group and many have been in investment
clubs. NONE of them have had a positive experience. Take the club idea
very slowly and follow the advice of the clubs that have achieved a long
history of success. Read the Beardstown Ladies(?) book and anything
else you can find on the topic. Form a group that has more in common
than wanting to invest in stocks. You should expect that most folks that
get involved will loose interest and be of little help to the group.
Do any of you have good or bad NAIC experiences to share???
- -Randy Barnes
------------------------------
Date: Thu, 17 Jul 1997 22:27:55 -0400 (EDT)
From: hrj@juno.com (Harold R Justice)
Subject: Re: Money for College
>From: BOB FORD <BOB_FORD@compuserve.com>
A good friend of mine, a high school student John Doe (not his real name)
wants to go to college when he graduates from high school. His parents
income is in the $30 thousands so he will not qualify for financial aid.
<snip>
Bob,
Are you sure he won't qualify for financial aid? I make more than
$30,000 and when my son went to Duke recently he got over $10,000 per
year in financial aid. Eligibility for financial aid involves a lot more
than current salary. If the parents don't have much in assets outside of
retirement savings, there is a great chance they could get significant
financial aid.
Harold
------------------------------
Date: Thu, 17 Jul 1997 22:28:40 -0400 (EDT)
From: feren@ctron.com (Andrew C. Feren)
Subject: Re: Any Experience With Citizens Bank?
Ken Stone <kstone@pantheon.yale.edu> writes:
> So I left Fleet Bank because of all the new charges and openned a new
> checking account at a local community bank: about 10 branches in the area.
> Very friendly,good customer service and a favorable fee schedule.
>
> Now I find out that this local bank has been bought by Citizens Bank and
> the change-over to Citizens will be complete. The old bank will basically
> cease to exist. Do any persfiners have experience with Citizens? Will they
> have any regard for the old bank's business practices or will they just
> merge the new customers into their larger structure (and likely higher fee
> schedule)?
Here are some comments that I submitted to persfin-digest
previously as well as some additional comments.
Andrew C. Feren <feren@ctron.com> wrote :
> Stay away from Citizens Bank!
>
> I know several people who have had AWFUL experiences with
> Citizens. In two of the cases the it was so bad that they
> actually considered refinancing their loans at a *higher* rate
> at an other bank just so they wouldn't have to deal with
> Citizens anymore. At least one letter got written to the
> Banking Commissioner.
>
> Use extreme caution when dealing with Citizens.
Some people had asked me for more details about the nature of
the problems. I have not had time to respond previously, but
I will try to add some additional information now.
Unfortunately, I am not familiar with all of the problems, but
I will try to list the problems that I am familiar with.
Citizens Bank on several occasions temporarily lost my
Grandmothers pension check. This money was (or should have
been) directly deposited into her account. This happened on,
as I recall, at least three different occasions. Since there
was almost exactly enough money for my grandmothers expenses
each month every time the money didn't show up was a real
problem.
My parents have a home equity (?) loan with them. Apparently
someone with a similar (definitely not the same) name to my
mothers has a loan there as well which is not always current.
Lately my mother has had a few calls from the bank (not a
collection agency) about this. This is more of an annoyance
than anything.
My parents had an other bad experience with their loan, but I
don't remember the details. My mother also told me that a
friend of the family "has had even worse experiences" with
Citizens. She mentioned this probably several months before
this topic came up on persfin-digest so I just made a mental
note to avoid Citizens and didn't ask for details.
Finally a friend of mine at work has had numerous problems
with a home equity loan from Citizens. None of the problems
were too awful, but there were so many problems that a letter
was written to the State Banking Commissioner. This was a few
months ago and I don't remember everything else that was on
the laundry list of complaints. At the time it was just one
more reason not to go with Citizens.
Anyway the long and the short of it is that four people I
know, dealing with different branches of Citizens Bank, all
had generally bad experiences. I at least do not need these
sorts of headaches and will will avoid Citizens Bank.
YMMV.
- --
- -Andrew Feren (feren@ctron.com)
Cabletron Systems Inc.
Durham, NH
------------------------------
Date: Thu, 17 Jul 1997 22:29:43 -0400 (EDT)
From: Jeff Morgan <Morgajs@parsec.com>
Subject: RE: How Can One Make Small, Regular Investments?
> From: jphoebus@shore.intercom.net (John K. Phoebus)
> Subject: Re: How Can One Make Small, Regular Investments?
>
> Bboth Twentieth Century (800-345-2021) and T. Rowe Price
> (800-638-5660)
> allow even $50/mo. contributions to some of their funds.
>
> Source: Andrew Tobias, The Only Investment Guide You'll Ever Need
> (1996).
>
If and when Mr. Tobias revises his work, it should reflect Twentieth
Century's name change to American Century. The change was
effective 1 January, 1997, in plenty of time for the millenium. :-)
Also, try Strong funds for low minimums. I believe they're $50
per month via automatic debit, with no account minimum.
(800) 368-3863.
Janus was also mentioned. Their minimums have gone up in
the last year or so, but they're still quite reasonable.
(800) 525-3713.
Cheers.
- --
Jeff Morgan - mailto:morgajs@parsec.com
------------------------------
Date: Thu, 17 Jul 1997 22:30:35 -0400 (EDT)
From: Tom Gaffney <tgaffney@kent.edu>
Subject: Another Inheritance Tax Question
I do have another inheritance-type question. My niece recently received a
pension (as a beneficiary). The deceased had passed away in November 1994.
My question is, does she qualify for the death benefit exclusion of $5,000?
Additional info: The monthly payments she receives total ~$2500 per year.
Thanks!
Tom Gaffney
tgaffney@kent.edu
------------------------------
Date: Thu, 17 Jul 1997 22:33:08 -0400 (EDT)
From: Russell J Foster <rjf@mcs.net>
Subject: Banks, Debit Cards, Etc...
I would like to preface my response by saying that I worked in the
Credit Operations department of a bank for about 8 years. While this
does not make me an expert in the area of banking operations, I believe
it does give about 8 years of credibility more than others who claim to
know what a bank wants and how they operate. I am no longer affiliated
with this bank, as I left the company about 1.5 years ago.
From: Greg Panayoti <greg_panayoti@il.us.swissbank.com>
>Banks and "financial services
>companies" are in the "subprime lending market" to push people to the
>brink of extinction (but agreeably not over).
No. A bank wants customers just like every other type a business;
long-term customers. Financially pushing a customer to brink of
bankruptcy is not a good long OR SHORT term decision. A bank likes
repeat customers who pay on time.
>The prey on people
>who have no where else to go either because of their own mistakes or
>some other misfortune. ... You
>call it capitalism .. I call it greedy corporate loan sharking.
Yet another argument that implies that banks are responsible for the
huge debt that Joe Average American has racked up. As much I'd like to
blame someone else for my problems as well, deep down I realize that *I*
and *I* alone are responsible.
Yes, banks have made it easier to give into temptation by simplifying
the lending process, creating low income standards for higher balanced
loans, and raising limit on the credits cards across the board. However,
people are still responsible for their own actions. The majority of
credit cards users are responsible users (that doesn't necessarily mean
they pay them off every month, it means they are not burdened by credit
card use) and I see no reason to regulate credit card use and banking
practices because some people can't take responsibility for their own
actions.
Why stop the regulation at banks and lending? How many people's lives
have been destroyed by an irresponsible driver? Should we regulate the
automakers?
>Wall Street shuns real companies
>like Chrysler (see rising profits, falling stock prices) and applauds
>companies in the "sub-prime" lending markets (loan sharks) and
companies
>using illegal 10 cent an hour child labor in depressed countries.
This is not a Wall Street issue. Wall Street does not determine the
success or failure of a company-- *we* do, the consumers of America by
giving them our money in exchange for their good or service.
Why do we purchase products that were assembled by "10 cent an hour
child labor"? (1) Ignorance -- do we even know which companies are
responsible and which aren't? (2) Our own personal greed -- they're
cheap.
Greg, you need to remember that the majority of credit users are
responsible users. Credit delinquency is fairly low (less than 15%)
which means that there are more of us that pay our debts on time than
people that don't. Should we discriminate against the majority to
protect the irresponsible few?
- --
Russell J Foster, MCSE
The Spectrum Group, Oak Brook, IL
rfoster@specgrp.com or rjf@mcs.net
------------------------------
Date: Thu, 17 Jul 1997 22:34:37 -0400 (EDT)
From: AINITGR8@aol.com
Subject: College SAT's and Financial Aid
"""A good friend of mine, a high school student John Doe (not his real name)
wants to go to college when he graduates from high school. His parents
income is in the $30 thousands so he will not qualify for financial aid."""
Where did you get the idea John will not qualify for financial aid? Now
days its VERY easy to qualify. #1, income can be up in the $75,000's
(parents) and the children still qualify for something. #2, John can seek
the option of being an "independent" student, the college will help him, and
base his financial aid solely on HIS income, therefore qualifying him for
much more aid, #3, what about subsidised and unsubsidised student loans? He
DEFINITELY qualifies for them based on his parents salaries.
RE: your questions of requiring certain SAT scores: the college has the
right to determine a level at which they will admit students, be it private
or public. John could have studied harder to learn how to take the SAT's.
He also could take the ACT's, they are much easier to score "higher" on and
colleges simply convert the ACT score over to the SAT score #'s.
If the college in question has admitted lower SAT score students, find out
why. Did those students excel in another area? i.e. sports, art, music,
etc? Did they score exceptionally high on their SAT in one area and
extremely low in another area therefore making an overall "lower" score?
John does not have to stay near his home unless he absolutely wants too. The
more a college costs, the more he'll qualify for (including housing)
Disclaimer:
This information is based on both my husband and I's bachelors and masters
experiences, currently working on master's. We know how the system works,
most incoming freshman and their parents don't. Our income, combined, was
$60,000 before my husband returned to get his master's degree and we STILL
qualified for grants, scholarships, etc (and loans of course!) - and he is
attending a state university. We received our bachelors within the last 5
years. Also, my sister and mother are both attending college and have just
started in the past year, so I'm still up to date on the "system"
Also, DO NOT RELY on the college to provide knowledge of all scholarships
available, check them out yourself. Check both parents employment
affiliations, church affiliations, insurance, memberships such as elks, etc,
etc, etc. Also, check on the internet, or use scholarship books to look for
independent scholarships within John's chosen field or field of interest.
There is an obscene amount of money available, you just have to work to find
it.
------------------------------
Date: Thu, 17 Jul 1997 22:35:21 -0400 (EDT)
From: "Mark J. Welch, Esq." <markwelch@ca-probate.com>
Subject: Re: Does a Debt Die With You?
Bob Ford asked whether a surviving "joint tenant" (other than a
surviving spouse) who inherits property through that form of title,
owe any duty to repay debts of the decedent. The answer is
(not surprisingly), "it depends."
First and foremost, you must recognize that this is a question
of state law, and thus there may be 50 different answers for
the 50 states. As a general rule, though, property inherited
via "joint tenancy" will not be subject to the decedent's debts.
As noted in the question, the creditor without a lien is left
with only a claim against the probate estate (which we assume
holds no assets or is insolvent -- although a nasty creditor could
theoretically come in and take all the family jewelry and photo
albums, with only sentimental value and hold them hostage,
forcing the family members to buy them back).
However, there are some significant exceptions. For example,
under OBRA '93 (the 1993 budget act), states are permitted to
impose liens against such assets to recover money paid for the
decedent through Medicaid (Medi-Cal in California) for certain
nursing home expenses. Also, some liens may exist (such as
income tax liens, local property tax liens, homeowner's association
assessments, or UCC liens) which are not readily apparent to
the heir until some time after the date of death. These liens may
not come to the heir's attention for several months, and sometimes
several years, after the date of death, yet they remain enforceable
against the heir in most cases, even if the inherited assets have been
sold and the proceeds spent.
Also, someone who received property via "form of title"
(such as joint tenancy, pay-on-death, transfer-on-death,
in-trust-for, or "Totten Trust" account titling) may still be
liable for estate taxes. I currently represent an executor in
the probate of an estate worth over $1 million, in which
about $50,000 was left to several individuals via "pay-on-
death" title designations. We now must collect the proper
share of estate taxes (about 25%) from each of those heirs,
which will be an administrative hassle since we expect some
of those heirs have already spent their entire bequest despite
our letter (accompanying the passbooks) advising them of
the need to set aside 25% to pay the estate tax in December.
All these rules vary from state to state, and may also vary
depending on the provisions of the decedent's will or trust.
THIS IS NOT LEGAL ADVICE, AND I AM NOT YOUR
ATTORNEY. Consult an attorney in your community for
legal advice specific to the facts of your situation.
- -- Mark J. Welch, Attorney at Law, Pleasanton CA (510-462-8483)
- -- http://www.ca-probate.com and http://www.markwelch.com
- -- This email is NOT legal advice, and is NOT confidential.
------------------------------
Date: Thu, 17 Jul 1997 22:37:37 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Money for College?
>1. Is State College A discriminating against John on the basis of mental
>ability? If it is discriminating, is it legal to do so?
It certainly is discriminating against him. Is it legal? I sure as heck
hope so. The US will be in a sorry state the day one's ability is not allowed
to be considered in hiring/admissions decisions. I suppose those who are
more cynical might quip that we are already there, as the Americans With
Disabilities Act is being abused in ways that the lawyers who drafted it
and lobbied for it are shocked, shocked, to discover.
Discrimination does not equal "bad" or "evil." When you decide to buy
one brand of something over another, or choose to eat at the Four Seasons
instead of McDonalds, you are discrimination. Discrimination is essential
to the functioning of society. The problem is when the criteria upon which
one discriminates (something as meaningless to one's ability to do work as
skin color, for example) have no relationship whatsoever to the job/student
slot/whatever at hand.
>2. Is State College A saying in effect "John, you are not smart enough to
>come to our college and learn to be smart"?
Yeah, and so what? Does your company hire every single person who
applies/interviews for a job? Is it not then telling "John" that he's
not smart/skilled/etc enough to work at your company?
[N.B. In the next two questions you refer to "SAT scores". I am reading
that as shorthand for selection criteria in general.]
>3. Since both John and his parents pay state taxes that support the
>college, and the college has plenty of room for John, is it morally and
>ethically right to deny John admission no matter what his SAT scores are?
Absolutely! A college has a given purpose and selection criteria, and
those should not be distorted because of who pays the bills. Now, if
a state wants to have another college system (or fund extra
classes/positions in the exisiting State U) for those who need
remedial work, fine. But to hold in-state applicants to different
criteria (or none at all) because "they pay the taxes" is, IMHO,
folly.
>4. Is it morally and ethically right to deny John admission to college
>because of his low SAT test scores when the same college gives full
>scholarships to people with even lower SAT scores than John.
I'm not sure if this is what you are referring to, but I will go off
on a pet peeve about "student"-athletes. I think it is ridiculous and
hypocritical for schools to admit athletes (and give them a full
scholarship, no less) who would have had no chance of admission if
they were not students. This practice deserves to be condemned from
every corner. We should have true student-athletes, and let the
various pro sports set up farm teams instead of using colleges as
their farm teams.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 17 Jul 1997 22:38:27 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Three Types of Accounts
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>I am not an attorney and the following is not legal advice.
>It is just my opinion.
That goes double for me :-)
>Joint account in tenancy is Joint Tenancy. Everything that is held in
>Joint Tenancy IS NOT subject to probate and can not be put in a will.
>When one joint tenant dies, the other joint tenants own the property as if
>the person that died did not exist.
I also believe that one tenant cannot sell, encumber, etc the asset without
the permission of the other. Also, I believe a creditor of one tenant can
attack the interest of the other tenant.
>Joint account with right of survivorship is what joint tenancy is sometimes
>called.
There is also a form of joint tenancy called tenancy-in-common (one could
glibly call it tenancy-without-right-of-survivorship, though that would
obscure other aspects of t-i-c). Even though both tenants own the asset,
their interest in it is reckoned separately and can be separately sold,
bequeathed, encumbered, etc. I also believe that a creditor of one tenant
can only go after that tenant's interest and cannot attack the interest of
the other tenant, but I'm not sure about that.
In some states there is yet another form of tenancy that is available, but
only to married people. it's called tenancy by the entirety. I don't
know if it is availble for anything other than real estate. Basically both
spouses are considered to have an entire interest in the asset.
If there are any lawyers on the list, I would really appreciate it if
one could post to the list comparing and contrasting tenancy in
common, joint tenancy with right of survivorship, and tenancy by the
entirety with respect to each tenant's ability to sell, assign,
pledge, encumber, bequesth, etc. his interest as well as the ability
of one tenant's creditors to attach the interest of the other tenant.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 17 Jul 1997 22:40:09 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: Money for College?
Bob describes John, who doesn't have the test scores needed to attend
State College A:
>1. Is State College A discriminating against John on the basis of mental
>ability? If it is discriminating, is it legal to do so?
Yes. Yes.
>2. Is State College A saying in effect "John, you are not smart enough to
>come to our college and learn to be smart"?
It is saying that he has not _yet_ demonstrated the necessary
aptitude to benefit from College A.
>3. Since both John and his parents pay state taxes that support the
>college, and the college has plenty of room for John, is it morally and
>ethically right to deny John admission no matter what his SAT scores are?
Is it ethical for the state college to accept students who
have not demonstrated that they will be able to benefit from the
educational programs offered, at partial taxpayer expense, at College
A?
>4. Is it morally and ethically right to deny John admission to college
>because of his low SAT test scores when the same college gives full
>scholarships to people with even lower SAT scores than John.
No. However, your description of the situation didn't indicate
that there were other students attending College A with weaker
credentials than John.
-David Martin
------------------------------
Date: Thu, 17 Jul 1997 22:41:07 -0400 (EDT)
From: jpoulter@islandnet.com (Jack Poulter)
Subject: Consumers Report for kids
Martin Turnauer <mturnaue@runet.edu> asked:
O>Subject: Information Needed for Elementary School Economics Projects
O>She wants to know if there is a Consumer Reports for Kids still being
O>published? How can you reach the publisher about subscribing?
According to the index page of a recent issue of Consumer
Reports, there is a bi-monthly magazine for kids 10 and up
published under the title of "Zillions". $16.00 per year (6
issues) $26.00 for two years. Write Subscription Dept., Boc
54861, Boulder, Colo. 80322-4861
An ad in last December's CR (page 42) gives a bit more detail and
states that Zillions is suitable for children 10-14. There may a
more recent ad.
------------------------------
Date: Thu, 17 Jul 1997 22:41:55 -0400 (EDT)
From: "John S. Rullo" <dlp/jsrullo@delphi.com>
Subject: RE: Information Needed for Elementary School Economics Projects
> Are here any other finance/money-managing/banking/investing/economics
> publications for children?
There are some nice booklets for all age groups free to all at the
Federal Reserve Bank of New York. You can order online and teachers are
allowed to ask for large quanities at no cost. I received mine in about
2 weeks.
The home page is at http://www.ny.frb.org
Hope this helps, John
------------------------------
Date: Thu, 17 Jul 1997 22:42:15 -0400 (EDT)
From: eric <eric_marcus@compuserve.com>
Subject: Cellular phones - Looking to Buy
I"m looking to buy a small cellular phone. What is "PCS?" What is
"digital?" I'm confused by all the "deals" offered by various phonme
companies. Any suggestions? Good or bad brands, etc.?
------------------------------
Date: Thu, 17 Jul 1997 22:43:25 -0400 (EDT)
From: Jim McGrath <jimm@hi.com>
Subject: Re: Money for College?
>
> 1. Is State College A discriminating against John on the basis of mental
> ability? If it is discriminating, is it legal to do so?
>
It's discrimination, and I think it's quite valid discrimination. SAT
scores are a fairly good predictor of success in college. The worst
thing a college can do is to dumb down its standards to acommodate
those who couldn't cut it otherwise.
> 2. Is State College A saying in effect "John, you are not smart enough to
> come to our college and learn to be smart"?
>
If John couldn't "learn to be smart" by the time he got through high
school, it's unlikely he will do so in college. You make no mention
of his high school grades. I would expect that he did poorly unless
the high school dumbed down its standards.
> 3. Since both John and his parents pay state taxes that support the
> college, and the college has plenty of room for John, is it morally and
> ethically right to deny John admission no matter what his SAT scores
> are?
Yes. Admiting John would place a burden on more capable students. I
don't agree that everyone should go to college, let alone have a
"right" to go to college. If John is not college material, he should
find a vocation suited to his capabilities. What is John trying to
accomplish with college attendance?
>
> 4. Is it morally and ethically right to deny John admission to college
> because of his low SAT test scores when the same college gives full
> scholarships to people with even lower SAT scores than John.
>
I'm not following you here. Are you implying that racial quotas are
used to give preference to students even less qualified than John? If
you are, this is one point on which you and I agree.
Jim McGrath
------------------------------
Date: Thu, 17 Jul 1997 22:44:42 -0400 (EDT)
From: WDStancil@aol.com
Subject: Re: Money for College
>1. Is State College A discriminating against John on the basis of mental
>ability? If it is discriminating, is it legal to do so?
It is discrimination - but it does not appear to be illegal discrimination
(based on race/sex/national origin/whatever else the feds say)
It seems to be the classic case of "how do we ration a good?"
The state has chosen SAT score as its criterion to ration a heavily
subsidized education. But it is not "mental ability" - it is the capacity to
do well on standardized tests. He's already down - don't falsely lead him
to believe that SAT score is always correlated with mental ability. What
if he re-tests after a "SAT prep" class? Could he re-apply (does the
state take the highest score?)
(Sorry, educators, but we know that some very bright people don't do well on
standardized tests - it's a pity that the state educators have chosen this
_lazy_ way of selection).
BUT, let's focus on positive approaches/suggestions:
1. Is ROTC available? At the small private school where I attended they'd
take any math or science major with passing grades. Monthly stipends and
they paid the last two years in full (8 years reserve obligation for
most).
2. Working for a year post high-school? If he lives on his own (assuming he
can work at a job that will support him) I don't think his parents' income
would be counted at all - more financial aid (& an incentive to work
hard).
3. Coupled with above, could he skip any "intro to the major" classes?
Through a combination of AP classes and placement tests a relative of mine
just started this year as a second-semester sophomore - less expense and gets
you to the workforce faster.
------------------------------
Date: Thu, 17 Jul 1997 22:45:26 -0400 (EDT)
From: vschmitz@creighton.edu
Subject: Bob Ford's question on Money for College
The student may not qualify for financial aid for the state college but
because the cost of a private college is so great, he will most likely
qualify. Income in the 30s is not that much when looking at private
colleges. The financial aid awarded is based on what the family can
contribute. If they can contribute the full amt of tuition and expenses
for a state college then no aid is awarded. If they can only contribute
$1500 toward the tuition and expenses of the private college, then some
aid will be awarded to meet part or all of the need. File for the
financial aid ASAP for the private college and also visit the financial
aid office and inquire about additional help based on financial need. The
unfortunate thing would be if the student is planning on starting college
in August, the financial aid office may have already awarded the
schools grants and scholarships. It is not too late to apply for the
Federal grants though.
We were in the same situation financially when our oldest child was
accepted at a private university, and we were greatly surprised at the amt
of aid he was awarded. The more expensive the school, the more aid they
get, provided the student qualifies.
------------------------------
Date: Thu, 17 Jul 1997 22:46:35 -0400 (EDT)
From: Susan Mangiero <mangiero@shu.sacredheart.edu>
Subject: Capitalism, Price, Regulation and Choice
First, everyone should recognize that the U.S. economy is a mixed one.
Pure capitalism does not prevail. Any ills which arise due to the regulation
of an industry such as banking cannot possibly be attributed to a laissez
faire system since, by definition, a purely competitive market exists in
the absense of mandatory regulation. Mandatory regulation is considered a
distortionof the market because the information conveyed to producers and
consumers through the price of a good or service is now incomplete.
Hayek wrote an excellent explanation of the importance of the price
mechanism as a means to convey information to producers and consumers. See
"The Use of Knowledge in Society" by F. Hayek (American Economic Review
35, pp 1-18, 1945).
Second, a good example of self regulation and its benefits (i.e. keeping
a market efficient and liquid) is the over the counter derivatives market
which is roughly $21 trillion in size (about four times the size of the
U.S. national debt). Even with highly publicized losses, the
loss experience in this market is below that of the % losses (% of face
value that is) of the corporate bond market. Based on research I did in
1994, the corporate bond market loss experience (firms which defaulted) was
about 4% in comparison to about 1/2 of 1% for the over the counter
derivatives market.
Third, where does individual choice fit in? People who borrow, spend,
invest, etc. are making a choice. Even if an individual is not comfortable
with being able to learn about a particular financial transaction, there
is so much information available to read and think about. I know very little
about automobiles so I rely on the advice of friends and family and what I
read to choose an auto mechanic, know what to do to maintain my car, etc.
Fourth, in a pure capitalistic system, a corporation cannot survive if
consumers think the company is out to cheat them. "Reputation capital" is
an important asset of any firm which wants to stay in business for the long
haul. There is a new book one can order about the trust factor and the
inherent incentive between two parties entering into a transaction to deal
in good faith.
------------------------------
Date: Thu, 17 Jul 1997 22:47:23 -0400 (EDT)
From: Joe Cabrera <toonhead@tiac.net>
Subject: Best Strategy for IRA Payements?
Which makes more sense for investing in an IRA? Putting all $2000 in it on
January 1, or to break it up over the year to take advantage of dollar-cost
averaging? The IRA is in an S&P 500 index fund.
------------------------------
Date: Thu, 17 Jul 1997 22:47:54 -0400 (EDT)
From: Fred Schiff <f.schiff@ieee.org>
Subject: re: Information Needed for Elementary School Economics Projects
I got this from one of my email lists:
KidsBank is a new site designed to teach kids about money and banking.
It was developed for Sovereign Bank, and features interactive,
cartoon-based tutorials.
http://www.kidsbank.com
Fred Schiff (f.schiff@ieee.org)
------------------------------
Date: Thu, 17 Jul 1997 22:48:49 -0400 (EDT)
From: bridges@en.com (James & Anita Bridges)
Subject: Oedipus vs. Socrates
>(Editor's Comment - This magazine's purpose is to help people to live
>well. As Socrates said (if Plato's notes are accurate), "The unexamined
>life is not worth living." -IK)
Oedipus might take issue with Socrates on this!
------------------------------
Date: Thu, 17 Jul 1997 22:49:35 -0400 (EDT)
From: eric <eric_marcus@compuserve.com>
Subject: Calculating year-to-date returns?
I've spent hours trying to come up with a formula. My broker says it's very
complicated and he doesn't know how to figure it out. My monthly statement
includes all events, cash, bonds, buys, sells, etc. I"m only interested in
calculating my track record on stocks (for this year). Obviously I need to
compare my present statement with that of 1-1-97, but how? Any math
wizards out there?
------------------------------
Date: Thu, 17 Jul 1997 22:50:44 -0400 (EDT)
From: "L. Chen" <am302@freenet.buffalo.edu>
Subject: Re: Money for College
> .............. snip .............
>State College A is a relatively new college and is not at capacity. It
>has plenty of room for students. They have a rule however that they only
>accept students with a SAT score of XXX or higher and John's SAT was
>lower ....................
>..................... snip ..................
>4. Is it morally and ethically right to deny John admission to college
>because of his low SAT test scores when the same college gives full
>scholarships to people with even lower SAT scores than John.
There seem to be a contradiction here. If CollegeA rejected John because
of his SAT scores, why did they admit the other applicant with a lower SAT
scores?
They may be able to set an SAT criteria -- provided they apply that
criteria consistently. I recall reading something about preference for
minority students not legal any more.
Also, I thought the cut-off for financial aid (as in loans -- low cost or
otherwise) is much higher than $30K.
Lily Chen
------------------------------
End of persfin-digest V4 #60
****************************
Articles sorted by: [Date]
[Author]
[Subject]