Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #88
Date: Thu, 2 Oct 1997 19:42:39 -0400 (EDT)
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persfin-digest Thursday, October 2 1997 Volume 04 : Number 088
IN THIS ISSUE:
ADVERTISEMENT: MCI INFOSOURCE
Re: Use Mortgage to Pay Off Student Loans?
Re: Beware of Loan Locator Web Site
Low Cost IRA Accounts
Re: Ira's BJs Cutoff Question
RE: Life Insurance Trusts / Real Estate Mediation
Re: Do I Need to Separate Long and Short Term Gains?
Re: [Q]: Cap.Gains Tax on Mutual Funds
Re: 403B Limit?
Re: short term losses vs. long term gains?
Re: income tax penalty on marriage
IPO Question
Nursing home insurance?
Cashing check in British pounds
Re: Help with DRIPs
RE: What are best "medium-term" investments?
Roth IRA Or Nondeductible IRA?
Re: persfin-digest V4 #87
RE: Low-fee/No-fee IRA accounts
End of marriage penalty?
re:SIMPLE IRA?
Wade Cook Seminars?
401(k) contribution?
re: Education IRA? & ROTH IRA's
Any Opinion on Hungarian, Polish, or Russian Index Funds?
Mutual fund & diversification
Re: cashing check in British pounds
The Moneypaper?
Upstart and/or startup?
How to get off credit card solicitation lists?
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Date: Thu, 2 Oct 1997 19:07:33 -0400 (EDT)
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------------------------------
Date: Thu, 2 Oct 1997 19:09:18 -0400 (EDT)
From: "David C. Baker" <ee03647@goodnet.com>
Subject: Re: Use Mortgage to Pay Off Student Loans?
> Suggestion: have parents pay off child's student loans with mortgage
> loan.
>
The problem, from a tax standpoint, is that for a legitimate mortgage
interest deduction, it must be your debt and you must have paid the
interest. When one person pays another's mortgage payment, neither
qualifies for the deduction.
Joe might look into borrowing the amount from his parents. The loan can be
set up through a bank where the parents provide the funds, but the bank
processes the payments. The parents would get the proceeds from the loan
minus processing fees by the bank. It is often worth the expense to have
Joe make payments to the bank, rather than his parents. This way, it is
perceived as a "real" debt, and not a disguised gift and is a formal
"arms-length" transaction. It can help preserve the relationship between
Joe and his parents.
The result is Joe gets a reduced loan payment at a lower interest rate and
his parents get the benefit of the cash flow as well as a mortgage interest
deduction. --Dave.
------------------------------
Date: Thu, 2 Oct 1997 19:10:26 -0400 (EDT)
From: "David J. Churchill" <churchilld@worldnet.att.net>
Subject: Re: Beware of Loan Locator Web Site
(re: http://www.loanlocator.com)
I would be very careful when saying that the "Loan Locator" Web site
does not have any vested interest because it is "not associated with any
financial instituation." I think a number of mortgage brokers would
make the same claim, too, and they make their living by earning fees
from the suppliers of the loan money. I would hardly call this
"non-association."
------------------------------
Date: Thu, 2 Oct 1997 19:11:00 -0400 (EDT)
From: "David J. Churchill" <churchilld@worldnet.att.net>
Subject: Low Cost IRA Accounts
I have noticed quite a few posts about finding low-cost IRA accounts
(trustees which will charge little or no annual fees). I think it is
also important to make sure the trustee offers you the type of service
you need, which includes the ability or willingness of the trustee to
hold the type of investments you already have in your IRA or plan to
have in your IRA. For example, not all IRA trustees will hold any
mutual fund of your choice. Also for example, not all IRA trustees will
hold limited partnerships. In some instances, and especially for large
IRAs, whether one is paying $100 per year or $10 per year can be a
secondary, not a primary, consideration.
------------------------------
Date: Thu, 2 Oct 1997 19:14:14 -0400 (EDT)
From: "Mike Stefani" <mike-stefani@orgella.com>
Subject: Re: Ira's BJs Cutoff Question
Yes- it is in today's Boston Globe, and on TV. Sounds like GE all over
again... Something like 30,000 cardholders were terminated, with more to
come, pending court action. The bank claims to be losing big bucks, since
too many cardholders pay off in full every month. They say that if an
individual runs an average of $3k/month in charges ands pays off, they net
$42/year, which does not cover their costs of administration, billing,
etc. The bank in this case, apparently foots the bill for something
called BJ's Bucks, which is some sort of 2% rebate back to the BJ's
customer. Here's what I think:
1. The Bank in this case signed a bad deal, and now wants out.
2. This, (plus GE and others) signals a trend, either toward fewer
affinity cards (can't carve the market up into tiny slices and expect to
make an easy profit) and/or toward fewer affinity cards with no annual
fee.
Regards,
Mike Stefani
Email: mike-stefani@orgella.com
(Editor's Comment - My hope is that more people pay their credit card
bills in full. Banks are in business to make a profit. Our obligation is
to our own bottom line, not the bank's. And what's wrong with paying
cash? -IK)
------------------------------
Date: Thu, 2 Oct 1997 19:15:27 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@classic.msn.com>
Subject: RE: Life Insurance Trusts / Real Estate Mediation
Mark Welch Wrote:
A Life Insurance Trust is ONE estate planning "tool."
You don't start the planning process by looking at the
tools at hand, but by looking at the problems that must
be solved. Once you identify the legal issues and
obstacles to efficient management and transfer of
your assets, you can start looking at different tools
to deal with those obstacles. No one can tell you whether
a particular tool is appropriate for you unless they have
completely analyzed the problems you face and the
alternatives available to you.
The primary reason to use a Life Insurance Trust is to
accomplish specific goals (often to pay the estate tax
when due without forcing the sale of other assets) that
can NOT be accomplished using less complicated and
less expensive planning techniques.
Keep in mind that the son might NOT be the only heir of the
estate. For example, the son might have children of his own,
and grampa may make bequests to those grandchildren
(either out of love or out of concern about the effects of
multiple estate taxation or the "generation skipping transfer
tax"). If so, the grandchildren may owe a pro-rata share of
the estate taxes (absent contrary language in grampa's
estate plan). Of course, Dad/grampa may also remarry
one day. Or Dad may or may decide to disinherit the son
after he squanders his life savings (including the cash
value from the life insurance policy) to run (unsuccessfully)
for Congress as the candidate of the "wrong" political party.
>>>> Extremely well put. As you know, Mark IS an Attorney, and therefore
QUALIFIED to offer Legal Advice. I on the other hand an NOT an Attorney, and
can only speak to the subject itself, with the admonition that I am NOT
offering any Legal Advice.
Cal Lester CLU
>Subject: What's involved in mediation/arbitration of a real estate
transaction?
I'm in a situation where I have backed out of a contract to buy a new
home, and am trying to get my earnest money back.
In order to better weigh my options, I thought I would query the list as
to what is involved in mediation/arbitration.
Would I need to obtaina lawyer?
>>>> Although I have never been involved with Real Estate
Mediation/Arbitration, I am involved with NASD Arbitration. For the sake of
this discussion, I am going to assume ( and you know what that spells ) that
they operate under the same basic rules.
a) Mediation normally involves the use of (1) Mediator, whose basic function
is to help the parties find a "middle ground". In most cases, the Mediator
has no authority to impose any findings, he/she simply is there to assist.
b) Arbitration normally involves panel of more than (1) Arbitrator ( we use
three ), who hear the complaints and motions, reviews evidence presented, and
then makes a "ruling" for one party or the other. In our situation, the
findings of the Arbitration Panel have the effect of law, and are binding on
both parties.
c) There is no "requirement" to have representation in either case. It is
one of the duties of the Mediator/Arbitration Panel to help the
complainant/respondent and guide them through any legal questions that come
up. In many cases, it is advantageous NOT to be represented.
Would there be any other out-of-pocket expenses required in such an endeavor?
>>>> I have no idea as to the actual costs, however you most assuredly will be
required to pay "filing fees", which might be nominal. I would suggest that
you consult the local Real Estate Board for exact info.
If, it is just a matter of presenting all the facts to a third
party and awaiting their decision, then I might try it.
>>>> Definitely check it out ! ! ! ! !
Once again, this is NOT Legal Advice, just my humble opinion.
Cal Lester CLU
------------------------------
Date: Thu, 2 Oct 1997 19:16:21 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Do I Need to Separate Long and Short Term Gains?
>I make automatic monthly investments into a number of mutual funds. At
>time of sale will I need to separate out the recent investments (last 18
>mos.) and compute short term gains/losses as opposed to the portion I
>held long term?
Absolutely. In fact, you'll have to separate out short-term (<12
months), mid-term (>=12 months but <18 months), and long-term (>=18
months) to properly compute your capital gains/losses.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 2 Oct 1997 19:16:52 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: [Q]: Cap.Gains Tax on Mutual Funds
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>I bought two lots (50 and 100) of the same stock with 3-week
>interval. Now, my on-line broker (NDB, if you wonder) doesn't have an
>option to specify lots in sell order form. Let's assume I will sell
>them in two separate transactions (same sizes: 50 and 100 shares).
>
>How should I calculate cap.gains? Do I have an option of using
>real purchase prices or I must use an average price only?
You can never, never, *never* use average cost with shares of stock,
or bonds, or options, or... Average cost can ONLY be used with
*mutual fund* shares.
If your broker will not accept a "specific shares" sale and will not
note the specific shares sold on the confirmation slip or send a
letter cotemporaneously with the sale, you are out of luck and will
have to use first-in-first-out to calculate your gain or loss. The
shares are deemed to be sold in the order bought, using actual
purchase price as the basis of the shares. See IRS Pub 550.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 2 Oct 1997 19:19:08 -0400 (EDT)
From: Jim Garcia <jimgarci@pacbell.net>
Subject: Re: 403B Limit?
> ------------------------------
> Subject: 403b limit?
> Susan Mangiero <mangiero@shu.sacredheart.edu> wrote
> I'd appreciate any information on how the limit for 403b investing is
> determined. It's not always $9500 and I'm not sure why.
> Also, is it based on only the Supplemental Retirement Annuity offered
> by TIAA-CREF only or is the % the employee contributes to the base
> retirement program also considered? Thanks. Susan M. Mangiero
>From "PERSONAL FINANCE FOR DUMMIES" by Eric Tyson -
"The 403(b) plans are more often known a tax sheltered annuities, the
name for insurance company investments that satisfy the requirements for
403(b) plans. For the benefit of 403(b) retirement plan participants,
no-load mutual funds can now be used in 403(b) plans."
"Nonprofit employees are allowed to contribute up to 20% or $9500 of
their salary, whichever is less. Employees who have 15 or more years of
service are allowed to contribute a few thousand dollars beyond the $9500
limit.
Ask your employee benefits department or the investment provider for
the 403(b) plan about eligibility requirements and details about your
personal contribution limit."
My employer (a community college) provides $1000 for a deferred
compensation plan or a tax sheltered annuity since I don't use dependent's
health coverage.
I recently learned that if I use the DCP, the $1000 counts toward my
$9500, and if I use the $1000 for a TSA, then I can put $9500 toward a
403(b).
That info came from a TSA salesman, so it may not be true. But my
"benefits department" is a clerk who probably wants to do a good
job, but is no tax code expert.
Unless you want to pay part of your monies to buy insurance, try to stay
away from TSAs. Try to find a mutual fund company to deal with. I use
Fidelity (they'll let you invest in 3% load funds without paying the load)
and I can invest in dozens of Fidelity funds.
If you have money in TSAs, it is (probably) possible to transfer
10%/year withiut penalty/load to a qualified (403(b)) mutual fund account.
You can e-mail me if you're in that situation.
Good luck. Jim Garcia jimgarci@pacbell.net
------------------------------
Date: Thu, 2 Oct 1997 19:20:04 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: short term losses vs. long term gains?
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>What are the IRS tax rules for offsetting short term losses by long term
>gains? Must both the long term gain and the short term loss occur in the
>same year?
Yes.
>Can a short term loss in one year be offset by long term gains
>over several years?
No.
However...
If you have net losses, you can take the first $3000 of the net loss
against ordinary income. Any amount in excess of that gets carried
over to the following year and is included in the net gain/loss
calculation. If there is still a net loss, again that gets to offset
up to $3000 of ordinary income with the rest being carried over to the
year after that, and so on until the loss is used up.
>Specifically, we had a lot of capital gains last year when bonds bought at
>deep discounts either matured or were called. This year we could sell one
>or two out-of-favor stocks at a loss.
It won't help. You can't carry the loss backwards, only forwards.
>Also this year, we could sell some greatly appreciated stocks to
>realize a long term gain to offset the short term losses.
If you had already decided to sell some of the stock, then yes, do so
and use the loss to offset the gain. However, if you like the stock
and think it will continue to do well, it is silly to sell it just to
use up a loss. And remember, even if you sell nothing and only have
that loss, the first $3000 of the loss goes to reduce income and the
rest carries over to next year.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 2 Oct 1997 19:20:40 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: income tax penalty on marriage
>I have a question and hope someone can help me. I got married early this
>year. Both of us have fairly equal income and have no children. Recently I
The worst possible case.
>filing single, the taxes we have to pay to the IRS will be either $1,000
>more if we file jointly or $700 more each if we file separately. Because
Are you sure about that? Unless one spouse is entitled to
significantly more deductions than the other spouse, MFS always
results in taxes greater than or equal to MFJ (equality occuring when
the spouses' taxable incomes are exactly equal).
>hearing of marriage penalty. My question is how IRS would know a person's
>filing status. Does it rely on a tax payer's honesty, or IRS does have the
>info and matches each filer's status when it receives the tax return form?
The IRS doesn't have the info. But if they ever challeneged your
return they'd find out pretty quickly. Also, since you already
submitted a W-4 with "married" selected, you'd probably raise eyebrows
if you changed it to "single."
>We are told we will have to pay penalty if the underpayment is over $500.
Not strictly true. You must have withheld the *lesser* of 100% of last
year's total taxes, 90% of current year's taxes or current years taxes - $500
in order to avoid the underwithholding penalty.
>$500 at the year end. My question is what if we only find out at the tax
>time next year that we owe IRS a lot, I don't think we should pay penalty,
>or should we? We followed the rules. It is the IRS withholding rate that
Did you? It's not as simple as just checking off the "married" box. You
have to go through the two-earner worksheet on the back of W-4 to get things
to come out properly. Did you do that?
We don't bother with that. We just check the box "Married, but
withhold at higher single rate." Also, I work backwards. I get Form
1040ES and Pub 15. I use the former to estimate what our taxes will
be, calculate the required withholding (plus a cushion) and then use
the latter to figure out what to put on my W-4.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 2 Oct 1997 19:21:00 -0400 (EDT)
From: "Steve Chong" <schong@concentric.net>
Subject: IPO Question
Hi,
Can anyone tell me what an IPO is and how it works?
Thanks for your help
Steve
------------------------------
Date: Thu, 2 Oct 1997 19:23:01 -0400 (EDT)
From: "ronald l. russell" <rlr@bham.mindspring.com>
Subject: Nursing home insurance?
I was wondering if anyone has advice on the pro/cons of Nursing Home
insurance? My mother (78) is considering such and has asked me to look into
it for her. Some of the premium quotes are starting at @ $250 mo. for first
yr., then $380 2nd. yr. , etc. She has sufficient funds in her name to pay
cash for a #yrs., however she is afraid of nursing home cost after seeing a
friend linger in a home for a few years.
What are other alternatives available, if any, that can be used to
offset this cost aside from taking chances using her own cash that she may
not be confined for a long period?
Thanks,
Ron
------------------------------
Date: Thu, 2 Oct 1997 19:24:19 -0400 (EDT)
From: George_McAuliffe.BNY@LNOTES.bankofny.com
Subject: Cashing check in British pounds
>I have a check from Britain for 1000 pounds. My local Connecticut >bank would
have to send it to a bigger bank (Fleet) to cash and I will >incur service
charges from both. . . .. Any ideas on how I can
>get the most from this transaction?
The best way I have found to transfer money around (between myself and other
individuals) is to use travellers checks. So if this check is from
someone you know, tear it up and get them to instead send you $USD
traveller's checks (i.e. denominated in dollars as opposed to pounds),
endorsed over to you (your name where one would normally put the
merchant's name). That way, you're just depositing a dollar traveller's
check into your bank account. No fees, conversion or hassle.
George McAuliffe.
------------------------------
Date: Thu, 2 Oct 1997 19:24:44 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Help with DRIPs
>companies. Some companies require that you purchase at least one
>share thru a broker before you can join. Can anyone recommend a
>broker willing to do this who won't charge a arm & a leg? Or should
>I join NAIC to purchase the initial shares? Any pros or cons on DRIPS?
I know it is not the answer you are looking for, but I
hope this is useful:
Many brokerages will reinvest dividends of stocks for you
for free. Of course, you have to have the stocks in your
brokerage account. Fidelity, for example, does this. I
don't know how useful it would be for only owning a few
shares, or even quite a few for stocks which pay very small
dividends. And, of course, if you want to buy any more
shares with cash, you pay regular commissions on those
transactions. And it is a bit odd to have fractional shares,
but they seem quite able to handle it. And they will do
it for, as far as I know, _any_ stock, not just the ones
for which the company itself sponsors a DRIP.
- --D
------------------------------
Date: Thu, 2 Oct 1997 19:26:02 -0400 (EDT)
From: Jeff Morgan <Morgajs@parsec.com>
Subject: RE: What are best "medium-term" investments?
>
>Does anybody have an opinion as to the best way to invest a medium-sized
>nest egg (say $50,000) when your "time-horizon" is in the range of,
>say, 6 months to 2 years, and you are looking for low-to-moderate risk
>(i.e. less risk than common stocks) and moderate liquidity (i.e the
>ability to convert the assets to cash within a few months if & when it
>became necessary). Is there a difference between various Money Market
>funds ? Are some Insured and others not ? Are all the insured ones
>equally safe ? Thanks in Advance.
A few thoughts:
I'd call 6 months to 2 years short term, rather than medium.
If you don't want to accept the risks inherent in stocks, then
CDs and money market funds are options. Yes, various funds
will have various returns.
One thing to check: some funds will voluntarily forego assessment
of management fees for a quarter or two in order to boost the
annual yield figure they'll quote in their ads.
I haven't run across any money market funds that are FDIC insured,
but it should be largely a moot issue if you invest in a fund that
holds government issues.
You're also usually covered by $500,000 SIPC insurance, but
that covers fraudulent activity, not investment losses.
How about a mixture, say $10,000 in a MM fund, $20,000 in
6 month CDs, and the last $20,000 in balanced funds, or maybe
a fund that invests exclusively in large cap preferred stock?
(Don't know of one offhand, I'm sure one exists...)
JMHO. Cheers.
- --
Jeff Morgan - morgajs@parsec.com
------------------------------
Date: Thu, 2 Oct 1997 19:26:55 -0400 (EDT)
From: Jim Garcia <jimgarci@pacbell.net>
Subject: Roth IRA Or Nondeductible IRA?
Hello Ira, I'd like to ask a question.
I've never had an IRA (because of pension plan, 403b & income).
I plan to open a Roth IRA next January, and my question is:
Is it ok to open a non-deductible IRA in late December and
roll it into a Roth IRA in January. Tax consequences should
be negligible, and I'd have 4K working by 1/15/98.
Jim Garcia jimgarci@pacbell.net
------------------------------
Date: Thu, 2 Oct 1997 19:27:20 -0400 (EDT)
From: "Benjamin Okun" <bokun@hotmail.com>
Subject: Re: persfin-digest V4 #87
Hi..
Can somebody point me to a source for announcements of all new mutual
funds? I'd like to be aware of funds before they begin accepting money.
Thanks....
- -Ben
------------------------------
Date: Thu, 2 Oct 1997 19:28:04 -0400 (EDT)
From: Mirin Lew <mirin@scmkt.sr.hp.com>
Subject: RE: Low-fee/No-fee IRA accounts
>
> I had an IRA at Waterhouse for a while. Yes, there is a termination
> fee of $25. The maintenance fee was waived for $10,000+ accounts,
> but this may have been lowered.
I just opened an IRA at Waterhouse. They now offer no-fee IRAs
regardless of the balance, which is a real plus for me since I just
started an IRA last year, so it doesn't have anywhere near $10,000
in it.
> The only bad experience I had was that it took a couple of months
> to get the rollover from American Century completed, which may
> say more about American Century than Waterhouse.
I did a transfer from Stein Roe (which will soon start charging fees
for their IRAs, whereas they used to offer them with no fee). It
took only a few weeks, so I think this was probably American Century's
fault, not Waterhouse.
So far I would recommend Waterhouse. They offer a pretty good variety
of mutual funds with no transaction fees, plus if you want to trade
stocks, they are offering a $12 commission for on-line trades for a
limited time (I think through Dec. 1998, but I don't have the info
in front of me). They also rank highly in Smart Money's survey of
discount brokerages. However, I haven't actually tried to trade anything
yet, so we'll see.
Mirin Lew
------------------------------
Date: Thu, 2 Oct 1997 19:28:56 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: End of marriage penalty?
Here's something to keep your eyes on (and to lobby for) next year.
The GOP says it is planning to introduce legislation next year that
will allow married people to file as married jointly, married
separately, or *as two singles*, whichever they want.
If passed, this would mean the end of the marriage penalty. I know
I'll be asking my legislators to vote for it (though since my senators
are Kennedy (ick) and Kerry (bleah) and my rep is Markey (gak), it'll
almost definitely be wasted time on my part).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 2 Oct 1997 19:31:34 -0400 (EDT)
From: Steve Foulks <sfoulks@nmu.edu>
Subject: re:SIMPLE IRA?
>From: John Moutz <<johnmoutz@absorb.com>
>Subject: SIMPLE IRA?
>The new SIMPLE IRA option for the self employeed and for small employers
>is not so simple in determining an employees limit on >contributions.
>The basic rule is that an employee may contribute on a pretax >basis
up to $6000 to a Simple IRA and the employer may make matching
>contributions up to 3% of the employees earnings.
>The question I can't find an answer to is what goes against the >$6000
>limit.
Nothing goes against the limit. Let's assume that you have a salary of
$250,000. If your employer uses the 3% match, then he will contribute
$6,000, since 3% of $250,000 is more than $6,000.
In addition you, the employee/self employed, could contribute $6,000
through a <bold><underline>salary reduction</underline></bold>, for a
total contribution of $12,000.
The employer could also choose the 2% rule for his contribution (2% of
employee salary up to $160,000 of salary (in 1997)).
In my $250,000 salary example the employer would only contribute $3,200
(2% of $160,000), but the employee could still contribute $6,000.
The $6,000 is not reduced by or have any effect on your ability to have a
regular IRA and contribute $2,000. However you as a self employeed
person can't have any other active plan. For example if you have a Keogh
plan, you must <bold><underline>freeze it</underline></bold> (i.e., allow
for no future contributions), to have a legal SIMPLE IRA.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
www.nmu.edu/instruct/business/sfoulks/
------------------------------
Date: Thu, 2 Oct 1997 19:32:44 -0400 (EDT)
From: paulclark1@juno.com
Subject: Wade Cook Seminars?
Does anyone have any informantion on Wade Cook and his Wall Street Money
Machine seminar. It sounds very interesting, very involved, and very
expensive.
If there is any info in the archives, please point me in the right
direction.
Thanks.
Paul Clark
paulclark1@juno.com
(Editor's Comment - I have a Wade Cook book page at:
http://www.shore.net/~ikrakow/wadecook.html
from which you can buy any Wade Cook book in print. -IK)
------------------------------
Date: Thu, 2 Oct 1997 19:33:36 -0400 (EDT)
From: Sunil Kulkarni <kulkarni@adaclabs.com>
Subject: 401(k) contribution?
Hi,
I am trying to max out on the allowable 401(k) contribution
($9500). However, since I did not participate in the plan
in the first 9 months of the year, I was hoping to increase
my contribution per pay period (twice a month) such that I
would be able to put in $9500 by the end of the year.
However, my employer says that there is a limit of 20% on
the contribution per pay period. Is there a way for me to
increase my contribution ?
Thanks in advance.
- - Sunil
- --
Sunil Kulkarni
ADAC Laboratories
540 Alder Dr. kulkarni@adaclabs.com
Milpitas, CA 95035 (w) (408)321-9100 x1182
------------------------------
Date: Thu, 2 Oct 1997 19:36:15 -0400 (EDT)
From: Steve Foulks <sfoulks@nmu.edu>
Subject: re: Education IRA? & ROTH IRA's
>Subject: Education IRA
>Does anyone have comments about the new Education IRA that will >be
>available in 1998? As I understand it, you can set one of these up
>for
>your child's education expenses and you can contribute up to $500 >a
year
>into it tax-free. Admittedly 500 bucks annually is not a whole lot,
>but
>with a newborn I think that money invested well could compound >into a
>fairly decent sum by the time the child reached college age.
>What are the list's thoughts on this new investment vehicle?
If you have the money to do all the tax sheltering you want, then it is a
<italic>no brainer</italic> that you would set up the non deductible
educational IRA. If you are saving money for them anyway, why not do on
a nontaxable basis?
If you told me I only have $2,000 to save on a tax sheltered basis, I
would say to put the money into a ROTH IRA, and borrow for the kid's
education, or use a regular IRA which allows for penalty free (not tax
free) withdrawals for qualified educational expenses, so you could more
money for college.
There appears to be a lot of hand wringing on this list as to whether to
use a ROTH IRA, and I agree with a guest on CNBC, using a ROTH IRA is a
no brainer - you should use one.
If I had limited resources, I would even contribute to the ROTH IRA,
before contributing to my employer's 403 (b) (or 401(k) or 457) salary
reduction plan.
Here is the way I see it based upon some analysesthat I conducted. If
you are a higher risk investor like myself (all assets invested in stocks
or high risk stock mutual funds) earning an 11% long term yield, and 50
years old:
1. When compared to a regular nondeductible IRA a ROTH IRA is
a no brainer choice .
2. When compared to a regular deductible IRA a ROTH IRA is a no brainer
choice . The younger you are, the higher return you get, and the higher
your tax rate, the more attractive the ROTH IRA looks.
3. <Rolling over a regular IRA into a ROTH IRA
involves doing a time value of money computation - it isn't a no brainer
(factors to consider: taxable part of distribution, how long it will
build up in the ROTH IRA, what return you are getting).
Some people say that we need to consider the tax rates now versus the
tax rate when you retire, but I can't imagine being so bold as to predict
the future direction of tax rates. I always assume they are the same.
In my case it clearly pays to rollover my regular IRA into a ROTH IRA.
As a matter of fact in my case, I intend to rollover my self employment
KEOGH plan into a rollover IRA this year (I have adopted a SIMPLE IRA for
self employment), so that I can have more IRA money to rollover to roll
into my ROTH IRA!
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
www.nmu.edu/instruct/business/sfoulks/
------------------------------
Date: Thu, 2 Oct 1997 19:37:11 -0400 (EDT)
From: eric <eric_marcus@compuserve.com>
Subject: Any Opinion on Hungarian, Polish, or Russian Index Funds?
<<Please advise what is your opnion on investing in Index particiapting
certificates for Stock Exchanges of Hungary, Poland, and Russia.
<<Please advise if Hungary and Poland and Russia are good long term
prospects.
I know of no East European index funds. There are both open and closed-end
mutual funds. These funds are quite volatile- so long-term is good- if you
don't get "sea-sick" from the ride!
------------------------------
Date: Thu, 2 Oct 1997 19:37:45 -0400 (EDT)
From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: Mutual fund & diversification
A stock broker called me today and made the statement that, according to
Financial Planners, people who invest ONLY in mutual funds are not
diversified. I disagree with him, of course.
But I am just curious. Have anyone else heard that statement? What is the
underlying rationale or justification for that statement? Or did that broker
just made it up and didn't know what he was talking about?
Lily Chen
am302@freenet.buffalo.edu
------------------------------
Date: Thu, 2 Oct 1997 19:38:36 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: cashing check in British pounds
>Subject: cashing check in British pounds
You may be able to go to the large commercial bank yourself, and cash
the check but be prepared to pay hefty service AND money changing fees.
I had a check drawn on Barclay's Bank in England (a VAT refund), and
went to an American branch of the same bank. They claimed no connection
with the English bank, and the various fees consumed almost half my
refund. You should do better with L1000.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Thu, 2 Oct 1997 19:39:37 -0400 (EDT)
From: Steve Foulks <sfoulks@nmu.edu>
Subject: The Moneypaper?
Has anyone had any experience with The Moneypaper in terms of using it to
start DRIP's. Does it work as slickly as advertised?
Steven M. Foulks, CPA, CFP, PhD
(Editor's Comment - I use it and like it very much. -IK)
------------------------------
Date: Thu, 2 Oct 1997 19:40:42 -0400 (EDT)
From: eric <eric_marcus@compuserve.com>
Subject: Upstart and/or startup?
>Subject: RE: Internet Oriented Upstart
>We own new company that has a new internet service on the market... got a
>bunch of customers using it, including some large corporations.
My only suggestion is that you DON'T refer to yourselves as "upstarts" when
you're looking for money. "Startup" sounds a lot better. (You may also be
upstarts, but keep it quiet!
------------------------------
Date: Thu, 2 Oct 1997 19:41:24 -0400 (EDT)
From: GeorgeS <pip@shore.net>
Subject: How to get off credit card solicitation lists?
You know the ones I mean, they offer low low balances if only you would use
their card. Well, I just am not interested. The last time I looked at my
credit report (TRW) it was loaded with inquires from these companies.
I'd like to get off the solicitation lists. I heard, on NPR, that congress
recently passed a law that says the credit report companies will keep your
credit history from these companies if you so request.
Is this true, has anyone tried it? The only alternative is to call each
solicitor individually and ask them to take you off their list.
FWIIW, the reason to avoid these solicitations is to avoid credit fraud.
Should someone else get an offer intended for you, they can merrily charge
against your name. And then... welcome to credit report hell.
------------------------------
End of persfin-digest V4 #88
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