Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #89
Date: Sun, 5 Oct 1997 16:34:21 -0400 (EDT)
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persfin-digest Sunday, October 5 1997 Volume 04 : Number 089
IN THIS ISSUE:
ADVERTISEMENT: domainTNG
Re: What are best "medium-term" investments ?
Re: Low-fee/No-fee IRA accounts
Re: Socially Responsible 403 Plan?
Re: IRA'S IRA Question/Estate Taxes
Re: Roth question
BJs Is Pursuing a Lawsuit
Travelocity Horror Story; Warning About Internet Transactions
Re: Education IRAs - Not Crazy About It
Roth IRA tax-free forever?
re: real estate arbitration
Investing in Estonia?
Roth IRA as college fund- comments?
re: subdividing
Penalties resulting from tax law revisions
Re: Question ~ Early Retirement
RE:Is BJ's Cutting Off Its Prompt Paying MasterCard Customers?
growth stock outlook?
Need Historic Cigarette Price Data
Re: Wade Cook Seminars?
re: Roth IRA Or Nondeductible IRA?
credit card solicitation - How To Get Off Lists
Gains on Stock Investments? Do Dividends Count?
Re: excess over short and/or long term capital losses
[none]
Re: Education IRA? & ROTH IRA's
Re: IPO Question
Re: How to get off credit card solicitation lists?
DRIPS & The Moneypaper
Sunset For The Index Funds? :)
Re: nursing homes - Anyone Really want To Live In Them?
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Date: Sun, 5 Oct 1997 16:02:12 -0400 (EDT)
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------------------------------
Date: Sun, 5 Oct 1997 16:03:03 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.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
In my opinion, the best choice depends on your comfort level, your
marginal tax bracket, and the state tax rate to which you are exposed.
The safest investment is considered to be US treasury bills and notes,
which are backed by the full faith and credit of the US, and the
interest is exempt from state taxation, but not from federal tax. For
the durations you mention, they are not paying great rates.. about 5.4
percent yield (one year bills) or 5.7 percent (2 year notes) in the face
of 2.5 to 3 percent inflation. So you get 2.5 percent real return before
federal taxes, and 1.1 percent after tax in the 28% bracket.
Fixed income securities such as top rated corporate bonds or GNMA's will
pay a bit more, but are exposed to market risk.. the principle may be
more or less than you paid when it comes time to cash in. Short time tax
exempts for your state of residence either money market funds or short
term municipal bonds are secured as to principle, but exposed to
inflation risk, and may or may not yield more than treasuries. Typically
money market funds are NOT insured, but are considered fairly safe since
they are very short term obligations (30-60 days). Some municipal bonds
are insured eg by AMBAC.
In view of the very poor investment yield after taxes and inflation,
strange as it seems, the safest investment may be one that assumes some
market risk, but offers appreciable capital gains potential now that the
long term rate is 20 percent with 18 month holding period. That may mean
top notch stocks, but the value may be less than you paid when you need
to cash in. (Not a pro.)
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Sun, 5 Oct 1997 16:04:04 -0400 (EDT)
From: Jeff Morgan <Morgajs@parsec.com>
Subject: Re: Low-fee/No-fee IRA accounts
In persfin-digest v4.n87, the following text was incorrectly attributed
to me. It was originally written by tcruz@calicotech.com.
Sometimes my mail program puts the ">" characters in my
responses, sometimes not. Such is life in the Microsoft zone.
+Here is one place to try out:
+http://www.fool.com/Media/DiscountBrokerageCenter.htm
+
+After digging around, I was able to find an IRA account with
+no Maintenance Fees, no Set-up Fees, no Minimum Size, and they
+have $12 online trades (I would guess there may be a fee for
+closing/transferring an account away from them?). I have sent
+away for their info to check out the small print. ;-)
+They are at www.waterhouse.com -- hope this helps!
- --
Jeff Morgan - morgajs@parsec.com
------------------------------
Date: Sun, 5 Oct 1997 16:04:52 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Socially Responsible 403 Plan?
Socially Responsible 403 Plan
Is there any such thing?
Thanks.
Peggy Lewis
(Editor's Comment - "Socially responsible", like beauty, is in the eye
of the beholder. -IK)
All 403 plans are socially responsible since you are providing for your
own retirement rather than depending upon society to take care of you
:-)
If you mean a plan that does not invest in tobacco, guns, oil,
chemicals, banks and deal with "bad" countries, etc, that is a problem.
Most plans are offered by the non-profit employer who arranges with an
insurance company or mutual fund company to provide a limited number of
investment options. Since their fiduciary duty is to provide a
reasonable return with a reasonable degree of safety, "socially
responsible" investments may provide a dampening effect on earnings, and
may not be too attractive, altho some such selected investments may not
have too much of a penalty.
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Sun, 5 Oct 1997 16:06:58 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: IRA'S IRA Question/Estate Taxes
<<ON THE USE OF A LIFE INSURANCE TRUST
I suggest that a life insurance trust is never necessary if you have
just one heir who is an adult with no mental handicap. You simply
arrange a life insurance policy in the heir's name and give the heir the
money to pay the premiums.
Yes, it is possible for that heir to spend the annual gift you give
him/her for premiums on other things and let the policy lapse. Who will
suffer by this? You? No, you will be dead. The heir? He made a
decision and lost by it. That is what adults do. Don't worry about it.
It is not your problem anymore, once you have made adequate arrangements
that the heir screws up. Of course, once you see he let the policy
lapse, you may decide to just leave most of the inheritance to charity
instead of that idiot. That is another perfectly effective way to avoid
estate taxes.>>
I guess what is meant is have the policy insured in the donor's name,
but all incidents of ownership in the name of the heir. If you transfer
an existing policy, you must live for at least three years or the policy
proceeds will be in your estate (true also for trusts). If a new policy,
then the three year rule doesn't apply.
I tend to agree (and have done just that), but there are other reasons
for a life insurance trust other than a profligate heir. A trust can
protect after the donor's death against the heir's creditors or spouse
in case of divorce... so there are pluses and minuses. You may be
counting on the insurance proceeds to pay estate taxes (eg when much of
your money is in tax-deferred retirement plans), and a trust with
Crummey provisions can provide more assurance. (Not a pro.)
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Sun, 5 Oct 1997 16:08:13 -0400 (EDT)
From: "Lester M. Levy, MD" <llevy@hoflink.com>
Subject: Re: Roth question
(Rich Carreiro comments:)
>Also, you must have an AGI under (I believe) $80,000 filing singly or
>separately, or under $160,000 filing jointly to be able to make annual
>contributions to a Roth.
I agree with most of Rick's remarks (not quoted) but the information I
have about contributions thresholds is:
max contribution of $2000 phaseout to
filing singly: .. AGI $95,000 $100,000
married filing jointly AGI $150,000 $160,000
married filing separately AGI ? $ 15,000
This Congress and President does not like married filing separately, so
make nice to your spouse.
Moreover, if you do not have outside money to pay the tax on conversion,
but must use some of the IRA's money, in addition to the federal tax on
the deducted portion and earnings, you will have to pay the 10% penalty
unless over 59 1/2. (Not a pro.)
- --
-Lester M. Levy, MD llevy@hoflink.com
------------------------------
Date: Sun, 5 Oct 1997 16:09:11 -0400 (EDT)
From: Gregory Panayoti <greg_panayoti@il.us.swissbank.com>
Subject: BJs Is Pursuing a Lawsuit
>
> I heard that customers who use BJ's MasterCard and pay on time will not
> be renewed, and that BJ's bank (Beneficial National) is forcing this. Is
> this true?
>
> Ira
Ira, here is your answer:
BJ's Wholesale says will pursue lawsuit
NATICK, Mass., Oct 1 (Reuter) - BJ's Wholesale Club said Wednesday it
will vigorously pursue its lawsuit against Beneficial National Bank
USA, a unit of Beneficial Corp (BNL), despite a Massachusetts court's
denial of its bid for a preliminary injunction against the bank.
BJ's had filed suit against Beneficial to block the bank's plan to
not
renew up to 40,000 BJ's Mastercard credit cards that did not have
financial charges for a year. The preliminary injunction sought to
block Beneficial from cancelling 12,000 of the cards that expire this
month.
Greg Panayoti
------------------------------
Date: Sun, 5 Oct 1997 16:10:46 -0400 (EDT)
From: Robert Cartwright - Sun Microsystems <cork@East.Sun.COM>
Subject: Travelocity Horror Story; Warning About Internet Transactions
I am posting this message to warn readers of persfin-digest about the
dangers of using internet travel agencies and to solicit opinions on
whether I should seek damages from Travelocity in small claims court.
On September 13, I used Travelocity to book a roundtrip flight from
Boston to Atlanta (departing October 4, returning Oct 8) at an
extremely low fare ($204). The ticket was nonrefundable, with a
penalty for any change. I charged the ticket to my credit card and
received an e-mail acknowledgment giving my itinerary, stating that I
would receive an additional electronic ticketing receipt by postal
mail.
Yesterday, in making plans for my trip, I realized that I had
not yet received my receipt. Since I was scheduled to depart this
Saturday, I called Travelocity Customer Service to inquire why I had
not received it. The Travelocity representative checked their
database and reported that I no longer had an electronic ticket for
the trip. According to their database, I "cancelled" my purchase
ticket seven minutes after I purchased it. I asked how this was
possible given (i) I had no recollection of cancelling the ticket
either intentionally or accidentally, (ii) the ticket that I had
purchased was was nonrefundable, and (iii) the ONLY e-mail message
that I received from Travelocity was a confirmation indicating that I
had purchased an electronic ticket.
The representative said I must
have activated the "cancel reservation" button when I was reviewing my
intinerary and that it was their policy not to send any notifications
for cancellations. I asked how they could possibly defend this
practice because without such notification, a customer has no way of
knowing that a confirmed ticket purchase has been cancelled. Given
that the the ONLY e-mail message that I received was a confirmation,
how could I know what "button activations" were logged in their
database?
Travelocity did not offer any restitution other than talking to Delta,
the airline for which I had purchased the ticket, which the
representative volunteered was "generally not very cooperative".
After talking to Delta, Travelocity informed me that Delta would
sell me a round trip ticket for only $600, about half of
the current price. She claimed that this was an unusually generous
offer from Delta. I responded that I did think that rebuying a ticket
for $400 more than I originally paid was a satisfactory solution. I
told them that the e-mail audit trail for the transaction
unequivocally showed that they owed me the original electronic ticket
I purchased for $204. The Travelocity representative told me there
was no chance that Travelocity would assume any liability. I asked to
speak to her supervisor who proved to be even less helpful. After an
hour of fruitless negotiation, I finally asked the supervisor to rebuy
my ticket at the $600 rate offered by Delta and that I would seek to
recover the difference in small claims court. At this point, they
claimed that Delta had withdrawn the offer of the $600 fare and that I
would have to pay $1150 for the ticket. I said that I would contact
Delta directly and hung up.
When I called Delta, the agent readily agreed to sell me a new ticket
at the special $600 rate. I vowed never to buy a ticket through
Travelocity again and to warn others of the risk involved.
Does anyone have enough knowledge of the small claims court system in
Massachusetts and the laws governing electronic transactions to advise
me on whether this case is worth is pursuing? Travelocity is a
subsidiary of SABRE Group Holdings based in Fort Worth Texas. The
parent company is traded on the NYSE and has a market capitalization
of just under $1 billion.
Robert "Corky" Cartwright
Department of Computer Science
Rice University
cork@rice.edu
(currently on leave at Sun Microsystems, Chelmsford, MA)
------------------------------
Date: Sun, 5 Oct 1997 16:12:29 -0400 (EDT)
From: Hope Feinglass <hfeinglass@earthlink.net>
Subject: Re: Education IRAs - Not Crazy About It
Hi Perfin'ers--
Here's my 2 cents on the new Education IRAs...I'm not that crazy about
it, and I don't plan to recommend it to my clients.
As most of you know, saving in the kids' names adversely impacts the
financial aid process. If a parent is aware of this and still wants to
save in a child's name, I would generally recommend an UGMA or an UTMA
before an Education IRA. Here's why:
1. Using UGMA/UTMA assets doesn't impact the parent's ability to take the
new college tax credits. If Education IRA proceeds are received income
tax free, on the other hand, the credits are not available.
2. In spite of the "kiddie tax" rules, a child under age 14 can still
have up to $1300 per year of income at no/low rates (650 is taxfree, next
650 is taxed at 15%). If a parent only sets aside $500 per year, the
child will be over 14 before that pool of money is generating 1300 per
year of income.
3. Similarly, in an UGMA/UTMA, a parent can set aside more than $500, if
they want to. At a 10% earning rate, a child can accumulate 13,000 of
assets in his/her name (1300 divided by .10) before the income is taxed
at the parent's higher rate.
4. UGMA/UTMA assets are more flexible--they just need to be used for the
child's benefit. That means a new computer or summer camp, if needed.
The Education IRA proceeds, on the other hand, must be used strictly for
higher education costs.
I like many of the new tax law changes...
this just doen't happen to be one of them. : - )
Hope Feinglass, CPA, CFP
Director of Tax & Financial Planning
http://www.money-minds.com
------------------------------
Date: Sun, 5 Oct 1997 16:13:15 -0400 (EDT)
From: Stephen Brodeur <sbrodeur@draper.com>
Subject: Roth IRA tax-free forever?
>...It is concerning the Roth IRA. What is the guarantee that
>withdrawals from the Roth IRA will be tax-free forever?
>What if a future congress changes the laws? I guess I
>am wondering whether I should just take the bird in hand
>(a regular IRA) or go for the two in the bush (the Roth IRA).
>Any thoughts on this one?
I tend to agree that the Roth IRA appears to still be a moving target.
However, what makes you think that a *regular* IRA is any safer from future
legislation than a Roth IRA? Or that home sale capital gains will be tax
free forever more? Or that the home mortgage interest deduction won't go
away? Or the taxability of social security income might increase? Fact is,
any of these things can change by legislation.
Of course, there may be legal recourse, through some sort of
'grandfathering', to escape new rules. And some things are very unlikely,
because it will anger enough voters to throw the legislators out of office.
But tax planning, retirement planning, estate planning, and almost *all*
planning make assumptions about the future. That's one reason why you need
to write down your assumptions when you make plans, and review them from
time to time.
sbrodeur@draper.com
standard disclaimer. just me. opinion, not advice.
------------------------------
Date: Sun, 5 Oct 1997 16:13:43 -0400 (EDT)
From: eric <eric_marcus@compuserve.com>
Subject: re: real estate arbitration
<I have been a real estate investor for many years. When I purchase
property, I NEVER agree to have disputes settled by arbitration. There is
no way you can assure arbitration will be fair. It there is a dispute, I
want my attorney to present my side of the dispute to a judge who must
follow the law.
What about juries? It is they who decide the case, NOT the judge! So, you
can take your chances with a possibly unfair abritration panel or a
possibly unfair jury- doesn't expect the judge and "the law" to rescue you.
Good luck!
------------------------------
Date: Sun, 5 Oct 1997 16:14:33 -0400 (EDT)
From: kristina@net.com (Kristina Miranda)
Subject: Investing in Estonia?
Hi everyone
I just read an article in Forbes (or Fortune?) about the great economic
outlook in Astonia. I think I would like to invest in some Astonian industries
but I have no idea how to go about doing such a thing. Can anyone offer advice
on investing in international markets? I've also been warned that receiving
dividends from foreign investments can be very taxing (excuse the pun). I
also wanted to know if any of you know of particular companies in Astonia
that I should be on the lookout for.
Any suggestions are appreciated.
Thanks,
Kristina
kmiranda@earthlink.net
------------------------------
Date: Sun, 5 Oct 1997 16:15:52 -0400 (EDT)
From: Stephen Brodeur <sbrodeur@draper.com>
Subject: Roth IRA as college fund- comments?
Hi all-
I'm intrigued by the Roth IRA and I'm thinking about using it as a college
fund. I don't have an IRA because my 403b is in good shape, and we wouldn't
get to deduct the IRA contributions. However, I'm considering the Roth IRA
for college funding for my newborn son, and any sibling(s) that may arrive
in the next year or two. I realize this won't work for a lot of people,
because their children will be through with college long before the IRA is
available. I started the family pretty late.
I'd fund the IRA for the next 21 years. I'll need college funds in year 18,
but I figure I can get a loan to bridge the 3-4 years until I can dip into
the IRA, either via home equity or through student loan programs. Even with
3-4 years interest on the loans (maybe interest free for some student loans
while the student is attending school), I'll still be ahead because the
investments are growing tax free all these years, and be tax free when I
withdraw them. When I turn 59-1/2, I'll pull out enough tax free dollars to
cover any loans or loan payments (being cautious about $10k gift limits,
and relative rates of return, and all that stuff).
I need to know if there are any restrictions on how I withdraw the money
from the Roth. I'lll easily handle the 5 year minimum and 59 1/2 years of
age. Can I take out a (partial) lump sum at age 59 1/2? Can I take out sums
in substantially equal amounts, but only over a few years?
Here are some of the advantages I see:
1. I can only put $500/child/year into educational IRAs, but $2000/year
into Roth.
2. If I put money into an educational IRA, then it will count against
financial aid. But money in my Roth IRA doesn't count. In 20 years I'll be
nearing retirement, and we may qualify for financial aid if I'm not working
(wishful thinking, eh?).
3. By putting the money into my Roth IRA, I don't have to worry about the
'do you trust your kid to spend the money on college' issue.
Also, if this is a good idea, should I start a non-deductible IRA with
$2000 this year, with the intention of immediately rolling it into a Roth
IRA when Roth becomes available next year, to essentially get 2 years worth
of contributions eligible from the start?
Comments? Ideas? Suggestions? Thanks in advance.
- -Steve Brodeur
sbrodeur@draper.com
------------------------------
Date: Sun, 5 Oct 1997 16:18:07 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: re: subdividing
>Has anyone ever had any experience with real estate development he
>would care to share? Am wondering about purchasing a 15 acre farm and
>subdividing it into three 5-acre lots and wonder if anyone else has tried
>his hand at this?
SAM
The actual subdivision of land is simply a case of getting the land
surveyed and a map of the subdivision filed with the county recorder.
The big problems are in getting approval from all of the agencies that need
to give their approval. A lot depends on where you live and who must give
their approval.
If you have never done that before, you probably need help. You should
talk to a local real estate attorney and find out what must be done and
how much it will cost. Depending on the situation, you might have many
thousands of dollars in fees you must pay. Your first step is to find out
what the land is now zoned for.
See if you need to change the zoning. If you do, you need professional
advice.
Changing zoning often involves political contributions. You must know the
difference between a political contribution and a bribe.
Once the zoning is correct for what you want to do, you should see what it
will cost to get utilities in. You will be shocked at this cost. This is
how cities and counties make money.
You must make sure there are no endangered species on the property. If
their is flowing water on the property, you may not be able to build.
Check it out. If you must install septic lines, that is another permit and
fee.
If you are not experienced selling lots, you probably should hire an agent.
There are a lot of disclosures that must be made to the buyer. Do you
know what they are?
If you build a home on the lots, you will need a construction loan. Check
with your bank to see if you can get one and what it will cost you.
GOOD LUCK
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Sun, 5 Oct 1997 16:19:57 -0400 (EDT)
From: Anonymous
Subject: Penalties resulting from tax law revisions
> Also does anyone have any references or anecdotes on
> tax laws changing in such a way that people are penalized
> for taking advantage of previously existing laws?
Two examples come to mind:
1. Phase out (over 5 years, I believe) of the tax deduction for personal
interest expense (on credit cards, car loans etc.) about ten years ago. This
resulted in the sudden increase in popularity of home equity loans, as savvy
debtors who owned homes scrambled to shift their pre-existing large consumer
loan balances to their still-deductible home equity accounts. As one can
see, though, many people continue to maintain large credit card balances, and
to pay high, non-deductible interest charges, years after the phase out
period ended.
2. The precipitous change in the regulations concerning tax sheltered
investments, which, in my opinion, was one important cause of the deep
recession in commercial property values nationwide in the late 80's and early
90's. It is difficult to unwind large real estate holdings on short notice,
and the economic imbalance caused by too many sellers all trying to get out
of their commercial property positions at the same time had a predictable
effect on prices. The same thing would happen today in the residential
property market if Congress were to decide to eliminate the mortgage
interest deduction on taxpayers' primary residential property.
------------------------------
Date: Sun, 5 Oct 1997 16:20:33 -0400 (EDT)
From: bolducs@juno.com (D. R. Bolduc)
Subject: Re: Question ~ Early Retirement
My question is indirectly related to personal finance. I desire to
retire at the age of 50. The only thing I see that would make this
difficult is the issue of affordable health insurance for me and my wife.
Does anyone have any suggestions or advice about this subject which
would assist me in my goal?
------------------------------
Date: Sun, 5 Oct 1997 16:21:29 -0400 (EDT)
From: ANDREA WELCH <ACE.AWELCH@MEMO.ACEHARDWARE.COM>
Subject: RE:Is BJ's Cutting Off Its Prompt Paying MasterCard Customers?
Detailed information concerning the BJ's MasterCard can be found
at the following Boston Globe links:
http://www.boston.com/dailyglobe/globehtml/269/The_careful_debtor_
loses_credit_at_.htm
http://www.boston.com/dailyglobe/globehtml/274/BJ_s_loses_bid_to_b
lock_credit_canc.htm
Andrea
------------------------------
Date: Sun, 5 Oct 1997 16:22:00 -0400 (EDT)
From: Faisel Saeed <scribler@gocities.com>
Subject: growth stock outlook?
has anyone had any experience with Growth Stock Outlook (GSO)?
they offer newsletters as well as a sample portfolio.
I wonder if anyone has followed it? and had what kind of results?
- -Faisel
------------------------------
Date: Sun, 5 Oct 1997 16:22:39 -0400 (EDT)
From: Susan Mangiero <mangiero@shu.sacredheart.edu>
Subject: Need Historic Cigarette Price Data
I'm having my MBA students analyze the historical relationship between
cigarette prices and packs smoked (quantity demanded). Then we'll
evaluate expected future earnings for tobacco companies. I've found quantity
data but can't find historical cigarette price data. I'd appreciate any
suggestions. I've scoured the web but may have missed something. Thanks.
Dr. Susan M. Mangiero
College of Business
Sacred Heart University
------------------------------
Date: Sun, 5 Oct 1997 16:23:20 -0400 (EDT)
From: David Peterson - FDC <peterson@pcocd2.intel.com>
Subject: Re: 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.
I haven't attended the seminar, but I've read the books
(in fact I asked Ira to add them to his book page). I think
you can get the same information out of the books as you do
in the seminar, but a whole lot cheaper. I would take the
$3K that you would spend at the seminar and use that as seed
money for trading.
Just my opinion.
Dave
------------------------------
Date: Sun, 5 Oct 1997 16:24:07 -0400 (EDT)
From: Steve Foulks <sfoulks@nmu.edu>
Subject: re: Roth IRA Or Nondeductible IRA?
>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
I am doing the same thing myself, and it is perfectly legal to do so.
In fact any pension type asset that you have that can be rolled over into a
IRA, such as a frozen Keogh plan in my own case, should be rolled over into
an IRA this year, and rolled into a Roth IRA next year.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
www.nmu.edu/instruct/business/sfoulks/
------------------------------
Date: Sun, 5 Oct 1997 16:24:54 -0400 (EDT)
From: Drew Blaha <drew_blaha@gilbarco.com>
Subject: credit card solicitation - How To Get Off Lists
Hey, I know the answer to a question finally.
To get the credit agencies to not give out your credit
rating to anyone who asks you need to call them.
Transunion 1-800-680-7293
Equifax 1-800-556-4711
Experian 1-800-353-0809
This is suppose to get your file blocked for
a year or two. To get it blocked permanantly you
have to write to them.
Drew
------------------------------
Date: Sun, 5 Oct 1997 16:26:03 -0400 (EDT)
From: "Victor Daniel a.k.a the MacNut" <macnut@netaxs.com>
Subject: Gains on Stock Investments? Do Dividends Count?
>Also this year, we could sell some greatly appreciated stocks to
>realize a long term gain to offset the short term losses.
I've been following the capital gains and losses thread on the digest, and
I've trying to understand something. Please forgive me if this sounds
basic, but I'm still learning. The impression I'm getting, from the digest
and other sources, is that the main return on investment in shares of a
company comes from the increase in the company's stock price, and that any
dividends the company chooses to pay are only incidental to that return. Am
I getting the right impression?
In other words, if I buy stock in ABC Corp for $15 a share, and a year
later, ABC's shares are trading at $30 a share, the value of my investment
in ABC can be said to have doubled?
Thanks in advance for any replies,
The MacNut
P.S. how much weight should be given to a company's willingness to pay
dividends in deciding whether to buy some of their shares?
| Victor Daniel a.k.a The MacNut Home page in progress at: |
| macnut@netaxs.com http://www.netaxs.com/~macnut |
| vdaniel@neptune.eng.temple.edu vdaniel@thunder.ocis.temple.edu |
------------------------------
Date: Sun, 5 Oct 1997 16:26:49 -0400 (EDT)
From: "Louis J. Schwarz, CFP, RFC" <sfc@deafcfp.com>
Subject: Re: excess over short and/or long term capital losses
Currently the Congress is aware of problems with technicalities
regarding the captial losses for both short and long term frames
especially with new Taxpayer Relief Act of 1997. As of now, it appears
that they are working on this issue this month and are attaching new
legislation with one of those appropriation bills.
- --
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, 5 Oct 1997 16:27:23 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: [none]
> 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.
That should work. However, if you file as single or married jointly
and your AGI is greater than $100,000 or if you file married
separately and your AGI is greater than $0, you *cannot* roll an
existing IRA into a Roth, though you can contribute new money to a
Roth (the cutoff for contributions is something like AGI $80,000
single or MFS, $160,000 MFJ).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 5 Oct 1997 16:28:07 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Education IRA? & ROTH IRA's
>1. When compared to a regular nondeductible IRA a ROTH IRA is
>a no brainer choice .
Agreed. There's no question about this.
>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.
Here I have to disagree. I've done out the calculation, and under various
quite reasonable assumptions, either can come out ahead. The main determinant
is current tax bracket vs. future tax bracket. Indeed, if those brackets
are equal, a regular IRA and a Roth are in fact a wash.
> 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.
Well, if you make that assumption, a regular IRA and a Roth will have
exactly the same value after all taxes are paid.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 5 Oct 1997 16:28:32 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: IPO Question
>Can anyone tell me what an IPO is and how it works?
As you may know, an IPO is the "initial public offering" of a company.
It is when a company sells some amount of its shares to the public for
the first time. It is the only time where the sale of shares directly
benefits the company.
The usual procedure is that a company works with an investment banker
who works to determine the demand for the stock. Lots of paperwork
has to be filed with the SEC and a preliminary prospectus is drawn up
to give to potential investors. The IB starts taking subscriptions,
going to its best customers first. It is unlikely that the average
Joe get a chance at an IPO, unless the IPO is a real dog and the usual
players don't want a part of it. Of course, some companies will
reserve some IPO shares for employees.
Finally, when the SEC approves everything, the IB and the company set
the IPO price based on actual (the subscribers) and perceived demand.
Obviously, the company wants to charge as high a price as possible to
get the most money. However, the way things usually work is that the
IB buys the all the shares from the company at the IPO price (minus a
service fee) and takes the risk of being able to sell all the shares
and not be stuck with them. Because of this, the IB has a slight
conflict of interest -- they may want a lower price than what the
company wants to ensure that the IB won't be stuck with any shares.
On the other hand, the IB doesn't want to see shares skyrocket on the
first public trades, because that means the company has left lots of
$$$ on the table and will be ticked off at the IB.
Once the price is set, the IB notifies the subscribers and fills their
orders. The next day the stock starts trading publically. Those
trades are from investor to investor, are at whatever price the market
demands, and will not directly benefit the issuing company.
For a more detailed description, see _How to Buy Stocks_ by Engel and
Hecht. It has a good description of the life-cycle of a company, from
startup to IPO to mature.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 5 Oct 1997 16:29:47 -0400 (EDT)
From: "Peter Palma" <rpalma@msai.mea.com>
Subject: Re: How to get off credit card solicitation lists?
In addition to the phone numbers I sent for the
credit bureaus, you can write to:
Direct Mailing Association Mail Preference Service
1120 Avenue of the Americas, 14th floor
New York, New York 10036
and ask to be removed from all their lists.
I'm not sure if the removal is permanent or for two years.
Pete
------------------------------
Date: Sun, 5 Oct 1997 16:30:24 -0400 (EDT)
From: "dan pearson" <danpearson@ibm.net>
Subject: DRIPS & The Moneypaper
With regard to the question re buying a first share: I have found the
Moneypaper to be an excellent method of getting that first share and
getting enrolled in the DRIP plan. The monthly newsletter is an
informative read. I have also used NAIC as their commission is a little
less although they have a smaller number of companies available.
There are a number of good sites on the Web relating to drips and I have
put some of my favorites on
http://www.geocities.com/TheTropics/Shores/4680/drips.html
...dkp...
dan pearson
regina, saskatchewan canada
http://www.geocities.com/TheTropics/Shores/4680/
------------------------------
Date: Sun, 5 Oct 1997 16:31:00 -0400 (EDT)
From: borisv@ctron.com
Subject: Sunset For The Index Funds? :)
Got it in the news:
"...For the first time in recent memory, managed funds
last quarter outperformed index funds. In a big way,
too. According to Lipper Analytical, actively managed
funds on average doubled -- and sometimes tripled --
the return of index funds for the quarter..."
What a relief for all of us not investing in the Index craze! :)
- -Boris
Dover,NH
------------------------------
Date: Sun, 5 Oct 1997 16:32:25 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: nursing homes - Anyone Really want To Live In Them?
> 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.
You may want to first see if there is any nursing home in
which your mother is willing to live. My parents have specificly told
me that they would rather die at home than live in a nursing home
because the conditions in many of them are terrible. Your situation
may be different, of course.
-David Martin
------------------------------
End of persfin-digest V4 #89
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