Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #64
Date: Sun, 27 Jul 1997 21:51:06 -0400 (EDT)
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persfin-digest Sunday, July 27 1997 Volume 04 : Number 064
IN THIS ISSUE:
ADVERTISEMENT: DomainTNG [Oppenheimer Software <Connect-Sales@mcimail.co]
Transferring Funds from a Poorly Managed 401-K to a Personal IRA? [Mike M]
Don't Forget the Safety Issue When Buying a Car [Somesh Rao <somesh@syl.n]
Debit Card vs. Credit Card Transaction Fee ["Louis J. Schwarz, CFP, RFC" ]
Re: Stocks vs. Mutual Funds ["Louis J. Schwarz, CFP, RFC" <sfc@clark.net>]
RE: state income and sales tax web site ["Dalmia, Bipin K." <DALMIABK@phi]
Provident Mutual OptionsPlus/FPAVL? ["Gary M. Oppenheimer" <0002180241@MC]
Monthly historical exchange rate for Australian Dollar? ["L. Chen" <am302]
Is 35 year old's Retirement Savings Plan On Target? [Steven Klein <SKLEIN]
about buying first share for DRIP [Kalpesh Sheth <ksheth@BayNetworks.COM>]
Re: Will Executor Question - Executor Must Be A State Resident? ["Raphael]
Zero Closing Cost Refinance? Any Catch? [BILL.GRIFFIN@usoc.org (BILL GRI]
Diversification - Mutual Funds Better Than Stocks [rrk@aps.anl.gov (Rober]
Re: DATEK On-Line Brokerage [rfrego@blitz.net]
The Executor of a Will Can Also Be a Beneficiary [jphoebus@shore.intercom]
...But A Beneficiary Cannot be a Witness... ["Mark J. Welch, Esq." <markw]
W4 Withholding Question [Ganesh.Swaminathan@NA.KM.philips.com]
Re: Gasoline Prices By State ["Carl C. Fields" <fieldscc@home.ifx.net>]
Buying Gold Coins? ["Suhas Joshi" <suhas@hotmail.com>]
Re: Mutual Funds are Better than Stocks for the Average Person [David Mey]
What kind of fund is best for an IRA? [Joe Cabrera <toonhead@tiac.net>]
Re: College Tuition Exemption is Not a Special Interest Loophole [Eric <e]
retirement destinations? [jdennis@www3.nsknet.or.jp (John D. Dennis)]
depreciation - the real hidden cost of car ownership [BOB FORD <BOB_FORD@]
Re: Health Insurance Options [Avrum Lapin <avrum113@cyberg8t.com>]
Thanks for College Admissions Comments [BOB FORD <BOB_FORD@compuserve.com]
Money Market Fund Recommendations? [Fred Schiff <f.schiff@ieee.org>]
SEP Situation [Fred Schiff <f.schiff@ieee.org>]
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Date: Sun, 27 Jul 1997 21:15:51 -0400 (EDT)
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------------------------------
Date: Sun, 27 Jul 1997 21:17:02 -0400 (EDT)
From: Mike Morehouse <mikemore@rocketmail.com>
Subject: Transferring Funds from a Poorly Managed 401-K to a Personal IRA?
In digest V4 #63, John Leipold indicated that it may be legal and
desirable to transfer money from a poorly performing 401-K into one's
IRA. I have a 401-K at work managed by Norwest Bank. As of yet I have
not received a statement which will be as of 12/31/96! Does anyone
know the process for doing this and are there any hidden tax
consequences. I'd rather place my money in an IRA managed by someone
like Vanguard or into other IRAS I have.
Any advice?
Thanks,
Mike Morehouse
mikemore@rocketmail.com
Opelika, AL
Ephesians 2:8-9
------------------------------
Date: Sun, 27 Jul 1997 21:17:34 -0400 (EDT)
From: Somesh Rao <somesh@syl.nj.nec.com>
Subject: Don't Forget the Safety Issue When Buying a Car
Our esteemed editor wrote...
>
>(Editor's Comment - I look at the "marginal cost per mile", similar to the
>marginal tax rate. This is the cost to drive the next mile. I drive a
>1990 Nissan Sentra, which I bought new for $7,000 in 1990. It's never had
>a major repair, has 138,000 miles, and I plan to keep it into the next
>millenium. If I can get another 7 years out of it, my cost will be
>$500/year. For a $20,000 car, you need to keep it for 40 years to get the
>same effect. -IK)
Ira,
The one thing you seem to forget is the safety issue. I have
read statistics that your survival rate for a similar accident is
much better for a bigger car. With the present trend of bigger and
bigger cars (especially SUV's), with a smaller car you have much
more chance of being hurt in an accident. Also, the ones who travel
in your car are your family or friends.
So, like any other choice, you need to balance cost with safety.
As for me, I will do both. There is a place near here which sells
old Police cars. They are both big and cheap ;-)
Somesh
------------------------------
Date: Sun, 27 Jul 1997 21:18:57 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Debit Card vs. Credit Card Transaction Fee
I just learned that if using a Debit Card, there will be a charge of 25
cents per entry while there is no charge for a Credit Card. Chevy Chase
Bank in State of Maryland recommends its customers to use their
"CheckCard" debit card via ATM's Credit Selection instead. Any Comment?
- --
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: Sun, 27 Jul 1997 21:19:45 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@clark.net>
Subject: Re: Stocks vs. Mutual Funds
Based on previous comments, let me throw a penny for a thought!
With the mutual funds, you let the professional management decide when
to sell stocks which are inside their mutual funds. Of course, longer
time will produce the reliable return!
With the stocks, you must have the discipline to sell specific stocks at
right time to make greater profits and/or greater return result per
year. No discipline means you do not have an ability to decide when to
sell? Some say if there is a good stock to buy, you have to select one
stock to sell to cover that cost! but you may want to keep all excellent
stocks as your pet? What can a good decision be???? Of course, an
investor must spend a fortune of time to make it possible!
- --
Louis J. Schwarz, CFP, RFC
------------------------------
Date: Sun, 27 Jul 1997 21:20:13 -0400 (EDT)
From: "Dalmia, Bipin K." <DALMIABK@phibred.com>
Subject: RE: state income and sales tax web site
this is the best site for most information on any state (go to the state
home page from this site), including state taxes.
http://www.uni.edu/schmidt/state.html
bip
------------------------------
Date: Sun, 27 Jul 1997 21:21:21 -0400 (EDT)
From: "Gary M. Oppenheimer" <0002180241@MCIMAIL.COM>
Subject: Provident Mutual OptionsPlus/FPAVL?
Does anyone know anything about their insurance plans, and more
specifically, the benefit (if any) of variable life insurance plans?
Someone is looking to sell this to me, and I want to determine its worth
as an investment and as insurance.
Thank you,
Gary
------------------------------
Date: Sun, 27 Jul 1997 21:21:55 -0400 (EDT)
From: "L. Chen" <am302@freenet.buffalo.edu>
Subject: Monthly historical exchange rate for Australian Dollar?
Does anyone know a source for free historical exchange rate for A$ --
monthly rates.
FRED database does not include A$. The Federal Reserve Bank of NY has
daily rates only. I need monthly averages going back to 1990 or earlier
to present.
Is the IMF's statistics available on the WWW? I believe they have
monthly averages.
Lily Chen
------------------------------
Date: Sun, 27 Jul 1997 21:22:53 -0400 (EDT)
From: Steven Klein <SKLEIN@snm.org>
Subject: Is 35 year old's Retirement Savings Plan On Target?
I am 35 years old. I now have $35,000 in my pension plan. I plan on
retiring between age 60-65. The $35,000 is invested in the following
classes of mutual funds: 50% growth, 30% cap. appreciation, 20%
International. I would like to reitre with $500,000 from these funds.
The questions are:
Is it fairly safe to assume the money should double every 7 years on
average?
Right now I put $8000.00 a year in to these funds, If I drop the total down
to $4000.00 year do you think I can still hit the $500,000.00 goal?
Any opinions.
Steve k.
------------------------------
Date: Sun, 27 Jul 1997 21:23:41 -0400 (EDT)
From: Kalpesh Sheth <ksheth@BayNetworks.COM>
Subject: about buying first share for DRIP
Rajesh,
May be this can go in FAQ?? Since, many people have asked this question
in past.
I generally use Dean Witter, they charge 10% of share price * #of shares
+ $2.35 (fixed) for shipping your certificate. Their phone# is
1-800-733-6113 x743 and executor's name is Tim Emerson.
If you go for Datek brokerage which charges $9.99 per trade (I don't
know any other hidden charge), you can compare how many shares you are
buying and which one will be cheaper. I use pacific brokerage
(http://www.tradepbs.com), they charge $15 per trade (via internet)
and no shipping charge if you want to hold your certificates (which
is necessary for DRIP).
- -Kalpesh Sheth
------------------------------
Date: Sun, 27 Jul 1997 21:24:46 -0400 (EDT)
From: "Raphael Johnson" <rjohntwo@ix.netcom.com>
Subject: Re: Will Executor Question - Executor Must Be A State Resident?
David,
I am not sure about the beneficiary question, but I do have another item
that you should investigate.
I seem to remember that, when my wife's cousin died (he was a Virginia
resident), the Commonwealth of Virginia required that at least one of the
executors be a Virginia resident. As it turned out, my wife had recently
moved to Virginia, so it was not a problem, but you should definitely seek
clarification prior to having to assume your your responsibilities.
- --Raph
------------------------------
Date: Sun, 27 Jul 1997 21:25:49 -0400 (EDT)
From: BILL.GRIFFIN@usoc.org (BILL GRIFFIN)
Subject: Zero Closing Cost Refinance? Any Catch?
What is the catch with the zero costs? The interest rate I am being
offered is 7.375% which seems right in line with the current. Usually
I have seen where it is higher to make up for no costs. I have read
the fine print and see no hidden costs unless the loan fails due to me
misrepresenting something and then I get hit with 1.5% penalty to make
up for their costs. What am I missing and how can they afford to
offer these deals? I am planning on refinancing to get 30K+ for
adding on to my house. Thanks for any info.
Bill Griffin
bill.griffin@usoc.org
------------------------------
Date: Sun, 27 Jul 1997 21:27:07 -0400 (EDT)
From: rrk@aps.anl.gov (Robert Kalt)
Subject: Diversification - Mutual Funds Better Than Stocks
Hi Ira & Co,
(Editor's Comment - In return for a bit of extra research, an individual
investor can get a much higher return from stocks. Many stocks have
doubled, tripled, and even quadrupled recently. Mutual funds will
take a much longer time to do that. With DRIP investing, the risk can be
spread out over 5-10 stocks easily, giving the same type of
diversification as mutual funds without the management expenses. -IK)
I have to disagree here. There is not sufficient diversification owning
5-10 stocks. It's nowhere *near* what you get in a mutual fund. And
probably no foreign exposure. Also the operative word in the sentence
containing "quadrupled recently" is the word "recently". These skyrockets
will come back to earth. Especially when/if the great bear returns.
Compare Walmart's returns in the 80's to "recently". Frank Armstrong
suggests in his excellent book "Investing For The 21st Century" to stay
away from individual stocks unless you have $50 million to invest.
- -----------Bob
------------------------------
Date: Sun, 27 Jul 1997 21:27:43 -0400 (EDT)
From: rfrego@blitz.net
Subject: Re: DATEK On-Line Brokerage
>There are some downsides though :
>1. No checking facilities. To get money out of your account you have to
>request a check - I have never tried this.
They are supposed to implement a checking book type feature soon. They have
mailed me a few checks, and although I have to wait a few days, it is no
biggy at all. It is hard to beat their service, and for $9.99 + tax a
transaction it is hard to beat. They even offer free DRIP's.
>2. Their email confirmation of trades is unreliable - I have not
>received their confirmation several times, and they document that they do
It is hard to rely on mail servers.
>3. Their guarantee of 60 seconds for a market order or no commission
>is worthless. I have tried to claim it twice, and both times I gave up
I have only made a few transactions, but they were usually done in less than
20 seconds.
>I have been willing to put up with the poor support for the benefits of
>$9.99 per trade and instant settlement, but as I can now get $9 per
>trade from Scotsdale, I may not put up with it for much longer !
Do you know the link ( URL) to Scottsdale?
Cheers,
Sarge
------------------------------
Date: Sun, 27 Jul 1997 21:29:04 -0400 (EDT)
From: jphoebus@shore.intercom.net (John K. Phoebus)
Subject: The Executor of a Will Can Also Be a Beneficiary
A beneficiary of a will can properly be its executor. You are thinking of
witnesses. Beneficiaries cannot be witnesses to the execution (signing) of
a will (nor, in most states, can they be the lawyer who drafts the will,
unless they are family). If a beneficiary witnesses a will, they usually
must disclaim their interest as a beneficiary for the will to be valid.
(i.e. they get nothing)
Making a beneficiary the executor is usually a good idea because usually
they will waive any fees that may be due them for their services as an
executor (thereby increasing the amount available to be distributed to the
beneficiaries). Similiarly, when you make a family member the executor, it
is common for the testator (the person writing the will) to waive any
requirement that the executor post a bond.
With the bar exam four days away for me, I feel compelled to state that
THIS IS NOT LEGAL ADVICE. I AM NOT (YET) A LAWYER. YOUR MILEAGE MAY VARY.
John K. Phoebus
Salisbury, MD
------------------------------
Date: Sun, 27 Jul 1997 21:30:00 -0400 (EDT)
From: "Mark J. Welch, Esq." <markwelch@ca-probate.com>
Subject: ...But A Beneficiary Cannot be a Witness...
A beneficiary under a will may not serve as a WITNESS to the
signing of the will, but there is no reason a beneficiary cannot
serve as executor. In fact, a beneficiary serves as executor in
the vast majority of probate administration proceedings (and
usually the beneficiary/executor is the surviving spouse or child
of the decedent, who not only has the most knowledge about
the decedent's financial affairs but has a personal interest in
getting the probate wound up quickly and efficiently and
assets distributed).
- -- 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: Sun, 27 Jul 1997 21:30:59 -0400 (EDT)
From: Ganesh.Swaminathan@NA.KM.philips.com
Subject: W4 Withholding Question
Hi Persfinners,
My wife and I are both working and our combined income tops 100+/year.
Our average Capital Gain is about 5K/year. We have been claiming 0
deductions both in our W4 form fearing higher taxes. May of my friends
tell me its wrong because if u say Married and 0 (M and 0 on the
form), the company that computes the salary doesn't have a fixed
formula for calculating the federal taxes and also the state taxes.
Whats happening is that my both our pay checks reflect less federal
and state taxes and we usually have to withhold additional money in
both fed and state to counterbalance this. This I think is not right
and there should be a better way out
Questions are:
a) Considering that we are in the higher tax bracket and also
expecting a child, what deductions we both should claim
( M and ?)? I contribute 12% for my 401K and my wife about 15%
b) If we claim more deductions in the first half of the year, should
we reduce the number towards the end?
c) Should we continue to withhold additional tax amounts/every check
still?
Any help from anybody who had a similar experience will be greatly
appreciated
thanks
ganesh
------------------------------
Date: Sun, 27 Jul 1997 21:32:16 -0400 (EDT)
From: "Carl C. Fields" <fieldscc@home.ifx.net>
Subject: Re: Gasoline Prices By State
>
> In a couple of weeks I will be driving across two thirds of the United
> States with my family. One of our big expenses will be gasoline, of
> course. Are there any places on the internet where the range of
> gasoline pump prices can be found in each state? I know with the array of
> state taxes and transportation costs prices at the pump can vary.
I don't know of any source for the data you want, but I do have some
advice.
If you are going to be driving the U. S. interstates, stick with
self-service stations at exits that have three or four competing
self-service stations. I don't know of any hard-and-fast studies on
this, but my impression is that the near-the-interstate-exit premium is
smallest at locations where three or more stations have to compete with
one another. Also, my impression is that off-brand stations farthest
from the interstate exit are sometimes 1-2 cents per gallon less
expensive than "branded" stations at the same exit, but this may not be
worth any extra hassle involved to get to them.
Another key factor is rest room cleanliness (and possibly security). In
this regard, fast food chains seem to have higher standards than gas
stations (this is a personal impression, I have no hard data on this).
The exits that have 3-4 gas stations often also have several fast food
outlets.
------------------------------
Date: Sun, 27 Jul 1997 21:33:24 -0400 (EDT)
From: "Suhas Joshi" <suhas@hotmail.com>
Subject: Buying Gold Coins?
I am looking for places to buy Gold Coins (American Eagle or Canadian
Maple or other standard...). Criterion: Reliable, Cheap and Convenience.
Mail order Companies or Web-based Companies will do fine.
Checked out with US Mint. The difference in price between what appears
in Newspaper and that quoted by US Mint is roughly $200! Any idea why
that is so? Did I call the wrong deptartment?
Thanks !
------------------------------
Date: Sun, 27 Jul 1997 21:34:22 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Mutual Funds are Better than Stocks for the Average Person
>Mutual funds offer huge advantages: easy diversification and professional
>management some of the biggest. I probably own shares in 200-300 companies
If you are looking to effectively index the market, you can do it
much more cheaply by simply buying one index fund rather than
a dozen stock funds which roughly replicate it.
>Comments? I may now get some critical e-mail from stock investors. that's
>okay. My strategy works great. I can demonstrate with my portfolio. It's
>safer and easy. that's good enough for me.
>(Editor's Comment - In return for a bit of extra research, an individual
>investor can get a much higher return from stocks. Many stocks have
And in individual investor can get easily burned by buying individual
stocks as well.
>doubled, tripled, and even quadrupled recently. Mutual funds will
And lots of individual stocks have lagged the market. A diversified
portfolio was not any more likely to quadruple than any given fund.
>take a much longer time to do that. With DRIP investing, the risk can be
>spread out over 5-10 stocks easily, giving the same type of
>diversification as mutual funds without the management expenses. -IK)
Also, and this can be especially nice, the investor in individual
stocks has a bit more control over the realization of capital gains.
Some funds are very tax efficient and some are quite bad -- any
capital gains distributions from the funds, even if reinvested
directly and immediately, are taxable.
- --D
------------------------------
Date: Sun, 27 Jul 1997 21:34:52 -0400 (EDT)
From: Joe Cabrera <toonhead@tiac.net>
Subject: What kind of fund is best for an IRA?
Which classes of stock mutual funds are most ideal for an IRA? Normally, I
hear bonds are most recommended to avoid taxes on the income, but this is
going to be strictly a stock portfolio ...
------------------------------
Date: Sun, 27 Jul 1997 21:36:59 -0400 (EDT)
From: Eric <er@clark.net>
Subject: Re: College Tuition Exemption is Not a Special Interest Loophole
> >will discounts from other employers. Discounts for meals in the company
> >cafeteria will suddenly become a taxable event!!
On Wed, 23 Jul 1997, Rich Carreiro wrote:
> So what? Compensation is compensation and should be taxed. Calling it
> a "discount" does not change what it is. It is something of worth,
Yeah, it's compensation but it's not in the paycheck. Neither are my
fringe benefits, which I am all-too-often told cost 50+% on top of my
paycheck. 80% of that fringe is a health care package which I may use to
the tune of $100/yr.
I guess some of you would not mind paying taxes on your fringes but I find
it very objectionable to pay taxes on goods for which there are no real,
realized earnings. Zero coupon bonds before maturity, and capital gains
unadjusted from inflation are examples that spring to mind.
------------------------------
Date: Sun, 27 Jul 1997 21:37:49 -0400 (EDT)
From: jdennis@www3.nsknet.or.jp (John D. Dennis)
Subject: retirement destinations?
The discussion of the relative incomes needed to meet a certain standard of
living in different cities--and the info about state taxes--gives a
financial twist to something I'm interested in: what are some of the better
locations for retirement?
I'm an expat (Japan) and may not retire here, and am completely out of the
loop with regard to any retirement trends/wisdom that may be generally
discussed among 50- or 60-somethings in the U.S. I have occasionally read a
survey in a news magazine about the "best cities in America" and have
wondered if that's all there is to tell...
Does anyone know of any "retirement planners" that, besides just telling
you how much you need to save, might also suggest or rank locations--in
either the most general sense, or based on some type of questionnaire? Does
anyone know of magazines/sites dedicated to this aspect of planning?
Thanks.
------------------------------
Date: Sun, 27 Jul 1997 21:39:36 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: depreciation - the real hidden cost of car ownership
>Subject: Depreciation: The Real Hidden Cost of Car Ownership
>No, one of your biggest (automobile) expenses will be the depletion
>of your car -- but it won't be payable while you're driving.
>If you paid $20,000 for your car and it lasts for 200,000 miles, each
>mile you drive is costing you 10 cents - ignoring cost of repairs and
>regular maintenance.
>Les Moskowitz
>(Editor's Comment - I look at the "marginal cost per mile", similar to the
>marginal tax rate. This is the cost to drive the next mile. I drive a
>1990 Nissan Sentra, which I bought new for $7,000 in 1990. It's never had
>a major repair, has 138,000 miles, and I plan to keep it into the next
>millenium. If I can get another 7 years out of it, my cost will be
>$500/year. For a $20,000 car, you need to keep it for 40 years to get the
>same effect. -IK)
Both Les and Ira are correct about depreciation being the largest cost of
car ownership. The least expensive (in terms of direct expense) way to
own a car is to go to a junk yard and buy one for say $400. You then fix
every problem as they occur.
This method will appeal to a very small group of people because the direct
expense of car ownership is only a part of total expense for a household.
Most people factor in the cost of having a car in the shop and not
available many days of the year. What would it cost to be stranded on
the freeway several times a year?
Also, how to you put a price on your safety? My VOLVO is one of
the safest cars on the road. I save a lot on car insurance cost because I
drive a VOLVO. If this car saves me or my family from only 1 serious
injury in my lifetime it will be the CHEAPEST car per mile I have ever
owned.
All cars depreciate (with the exception of a few exotic cars) for about 15
years. Then they appreciate from then on. For example, that 57 Chevy
convertible that cost $2500 new that I sold in 1962 for $800 because I did
not have the money to fix the transmission is now worth
$43,000 in number 1 condition according to "Standard Guide to Cars and
Prices". That is an appreciation of about $1000 per year. Not a bad
investment.
> I drive a 1990 Nissan Sentra ....and I plan to keep it into the next
millenium.
If you picked the right car Ira, it might fund your retirement.
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Sun, 27 Jul 1997 21:41:56 -0400 (EDT)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: Health Insurance Options
>
>I purchase my health insurance as an individual. A professional society
>that I belong to offers a plan that is structured so that most routine
>costs are paid by the insured, and the plan covers expenses after a large
>deductible is reached. The trade off is that the premium is very low.
Rest assured - if the insurer is well established the premiums as a
function of deductible are actuarially sound.
You are healthy but you are entering a dangerous age. A heart attack,
cancer, or sports caused child injury can consume a large deductible real
fast.
Group health plans can be cheaper because the cost of selling (advertising,
commissions) are lower than those on the open market. Your profession may
historically have lower illness rates than the population that buys
insurance on the open market. Your professional assn may have a lot of
rural members who bring down the costs for say New York City members.
Down side risks are (a) if say cancer occurs can you switch to a lower
deductibility and (b) if you switch careers cam you remain a member of the
professional society for insurance purposes and (c) if you show up at the
hospital for say heart surgery will they want you to post the deductible
up front and could you.
Avrum Lapin
Upland., CA
(Editor's Comment - I don't believe it's legal for an insurer to ask for
the deductible up front, particularly in an emergency situation. I speak
from personal experience. -IK)
------------------------------
Date: Sun, 27 Jul 1997 21:46:57 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Thanks for College Admissions Comments
Thanks to everyone for their ideas and thoughts about John and college
admission and expenses. I have passed the ideas along to him. There are a
lot of knowledgeable people on this list who were generous enough to share
their knowledge and experience. I had never given college admissions much
thought before as my college days were a very long time ago.
Several people have asked how a state college that is supported by the
taxpayers of the state could have a criteria of SAT scores of XXX for
admission and then give scholarships to students with lower SAT scores.
When I first heard about this, I thought that this could not happen. It
just seemed so unfair. I did some investigation and this is what I found.
The SAT score criteria for college admission only applies to students that
the college admission office WANTS IT TO APPLY TO. If for any reason
(except race after prop 209 was passed) a college wants you as a student,
the SAT score criteria for admission DOES NOT apply. In fact the college
would prefer that you NOT take the SAT test. The reason is that if the
student did not take the SAT test, the college could truthfully state that
they are not admitting people with lower SAT scores than their criteria.
After learning about my state colleges and universities admission
policies, I felt that as a state taxpayer, I was contributing to an unfair
college admissions policy and I would like to do something about it. It
seemed to me that I should be able to come up with a policy that WAS FAIR
to everyone. After giving this a lot of thought, I am now convinced that
there is NO FAIR WAY to deny college admission to one person and admit
another. Here is why.
About 1/3 of the graduates of our state college and university system did
not take any test, SAT or otherwise, or had SAT scores less than the state
colleges admission criteria. They took their first two years of college
at a community college where the only entrance requirement is high school
graduation.
They can then transfer to the state colleges. This convinces me that SAT
scores should not be used to deny anyone admission to college.
I have also reviewed several recent studies that show that the amount a
state spends to subsidize a college education for it's students is an
excellent investment for the state. That is, on the average, a state
recovers TEN times its subsidy in higher taxes paid by the student who
graduates from college. Also the federal government receives a lot more in
taxes from a college graduate than for someone who has not graduated from
college.
I now believe that the ONLY FAIR system of college admissions is also the
best one for the state and society as a whole. I would appreciate your
comments. Is this proposal a good idea or not?
I propose that all 4 year state colleges in the state adopt the same
admission systems as the 2 year community colleges. Anyone who wants to
be admitted will be admitted. If you maintain passing grades, you can
stay in college.
If you do not maintain passing grades, you are out. Now in California,
you can go to school for 14 years with no tests of any kind to determine
whether you can be admitted. I would like to change that to 16 years. If
this results in more people going to college I think we will all be better
off for it. I can see that as a taxpayer, I might have to pay more taxes
at the start but I will pay less taxes in the future as these students
graduate and start paying taxes. A big plus of this system
for me is that the admission policy is FAIR TO EVERYONE.
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Sun, 27 Jul 1997 21:47:46 -0400 (EDT)
From: Fred Schiff <f.schiff@ieee.org>
Subject: Money Market Fund Recommendations?
Can any one recommend a good Money Market Mutual Fund?
I had my money in NatWest (now Fleet) making a miserable 3.5% in their
money market (not the savings account!) and moved banks. I'm still
getting 3.5%, because I took some of the money and finally bought
some stocks. I now have a tiered money market but no longer have as
much cash in the account to qualify for a higher rate.
I want a money market mutual fund, with checks, a higher rate, and
hopefully very low fees.
Thanks
Fred Schiff (f.schiff@ieee.org)
------------------------------
Date: Sun, 27 Jul 1997 21:49:20 -0400 (EDT)
From: Fred Schiff <f.schiff@ieee.org>
Subject: SEP Situation
I was talking to my cousin, who has a SEP. I'm not sure about the
differences between a 401K plan or an IRA, which I'm familiar with and
a SEP, other than the fact that its for people who are self-employeed.
His broker is a friend of his, who talked him into getting into a unit trust
which invests in the DOW5 model. So far so good. His friend also had him
go into a health care mutual fund, a pacific rim mutual fund and a
technology mutual fund.
Now I have a real problem with all of these things. I think he should dump
this "friend" and go elsewhere. I've never been real
crazy about unit trusts, and since they are the Dow5 model they have to
be liquidated ever single year, probably racking up a commission. I told
he could get a regular discount broker and just buy and sell these stocks
directly. I don't know the benefit of the unit trust. I'm pretty certain
that all the mutual funds are load funds, and probably have 12b1 fees.
The main problem with them is that they are all too volitale and cyclical
to be in a plan where the main point is that you shouldn't touch it until
retirement.
Any thoughts?
Fred Schiff (f.schiff@ieee.org)
------------------------------
End of persfin-digest V4 #64
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