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Subject: persfin-digest V4 #97
Date: Mon, 27 Oct 1997 23:29:59 -0500 (EST)
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persfin-digest Monday, October 27 1997 Volume 04 : Number 097
IN THIS ISSUE:
ADVERTISEMENT: domainTNG
Some Observations About Today's Market Action
FW: Other people writing your checks?
Re: Home Loans
various state "personal" taxes ratings.
Re: Roth IRA Comparisons / Tax Brackets for 1997
Re: Biweekly vs. Monthly Mortgage Payments
Re: Japanese Markets, Interest Rates, Etc.
Questions regarding Home Mortgage
Re: Online Banking For Mac?
Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
IRS Form 1722?
RE: Re: Carleton Sheets
Re: Mortgage Prepayment
Re: Paying extra on mortgage
Re: Long-Term Care Insurance
Real Estate Question: Sell now or wait?
RE: Long Term Care Insurance
What is "tax year of 12 full months"
College fund for 6 year old?
Get Rich Quick - Real Estate - $0 Down?
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Date: Mon, 27 Oct 1997 22:50:37 -0500 (EST)
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------------------------------
Date: Mon, 27 Oct 1997 22:59:19 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: Some Observations About Today's Market Action
I had a bit of a stomach virus today and ended up recuperating while
watching the market bloodbath on CNBC. It struck me that the two "circuit
breakers" that were hit are really just PR gimmicks.
The 350 point loss which caused the 1/2 hour trading halt did no good.
As soon as trading resumed, the Dow charged downwards into the 540 point
trading halt limit.
As I write this, the Hang Seng (Hong Kong) is down 16%. My prediction:
this will cause the Dow to open over 540 points below today's close. Will
that mean that there will be no trading tomorrow?
These circuit breakers are an arbitrary intrusion on the free market.
The idea is to prevent a 1987 style meltdown in one day, then use the
media to interview brokers who say "hang on tight". However, unless
buyers are found (there was a 14:1 imbalance between sellers and buyers)
this will mean the ice cream will melt gradually over a few days instead
of immediately over one day.
We criticized the Communists for interfering with free markets. It
seems to me that this is the same thing. If the imbalance remains, the
bubble will burst. So is anyone "buying on weakness"? Or are we saying
"where's the bottom"?
"Stocks have settled at a permanently high level." - Professor Irwin
Fisher of Yale, 1 week before the 1929 market crash.
Ira
------------------------------
Date: Mon, 27 Oct 1997 23:01:47 -0500 (EST)
From: "Rodin, Barry H." <brodin@pica.army.mil>
Subject: FW: Other people writing your checks?
>
> A previous persfin-digest said:
>
> "My company is at the point where we need to purchase software that
> will allow us to accept check information by phone, fax, or E-Mail, and
> write the checks on our end. There are many such programs available
> (including shareware), ranging in price from $20 to $395; we have
> reviewed a number of the programs through downloadable demos..."
>
Am I the only one who is paranoid about this?
Anybody who has a copy of one of my checks (signed or unsigned)
can get the account number off of it. What is to prevent anyone from
printing a check with my account number and submitting it for payment?
------------------------------
Date: Mon, 27 Oct 1997 23:04:20 -0500 (EST)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Re: Home Loans
>From: "Grady Cash" <cashg@gte.net>
>Subject: Lenders vs brokers
>SNIP
>My experience with lenders is enlightening. In shopping for the best
>rates, I beat my lender by 3/8 point using a mortgage broker. I
>called the lender and asked if they could meet the same rate. They
>refused so I used the broker.
>After closing, the mortgage broker notified me that my loan had been
>sold to - guess who - THE SAME LENDER!
>Grady Cash, CFP
>http://www.healthycash.com/center/
This is an excellent point that all home buyers should remember.
Getting a home loan is renting money. We all want to rent money from a
place that has the lowest rent (interest rate). The thing we want to
rent, "money", is the same product no matter who we rent it from.
You should shop till you drop to find the best home loan interest rate.
Mortgage brokers make that easier by arranging for us to rent money from
many lenders.
Why not check several mortgage brokers to see who can find the best rate?
Also as Grady found out, lenders acquire mortgages 2 ways. The direct way
when the make you a loan and the indirect way when they buy an existing
home loan. Also lenders may not want your loan at all. They just want the
fees for making the loan. As soon as the loan is made, they sell the
loan.
However, the best place to get a home loan is from the seller. Usually
no points or PMI and better terms than from a financial institution. Home
buyers should always ask their agent to search the MLS for listing that
indicate the owner will "carry back" a loan. Even it the MLS does not say
a home seller will "carry back" a loan, you should always ask them to.
They might say yes.
BOB FORD
BOB_FORD@COMPUSEVE.COM
Editor of 57-56-55 CHEVY list
------------------------------
Date: Mon, 27 Oct 1997 23:05:05 -0500 (EST)
From: charles weidner <cweidner@catlover.com>
Subject: various state "personal" taxes ratings.
considering change of residency for with state taxes a consideration.
does anyone have a reference for comparison of "personal taxes" that
include such things as "asset" taxes, such as Florida has, as well as
state income taxes.
Not too concerned re sales or property taxes, but if in same reference
would be helpful.
cweidner
------------------------------
Date: Mon, 27 Oct 1997 23:07:05 -0500 (EST)
From: Shankar Prasad <Shankar.Prasad@Eng.Sun.COM>
Subject: Re: Roth IRA Comparisons / Tax Brackets for 1997
>Subject: Re: Roth IRA comparisons
> >first case, almost every analysis I see takes the tax savings from the
> >deductible and invests it in a regular taxable account. I don't think
> >that that is correct. Now you are winding up comparing on one side
>
> It is correct inasmuch as many folks wish they could put
> away _more_ for retirement than the idiotic current 2k
> limit allows....
I fully agree with you. For people who are bumping against the limit
of 2K, a Roth gives the opportunity to make an effectively higher
investment (i.e. 2K/(1-T)) as you pointed out.
> >the retiree has the oft-recommended 70-80% of regular income), the effective
> From: David Meyers <dmeyers@panix.com>
>
> >From: Shankarprasad.Venkoba-Rao@Eng.Sun.COM (Shankar Prasad)
>
> >tax rate will be lower than the marginal tax rate (Tp), due to the standard
> >deduction, personal exemptions, (maybe some tax credit), and part of
the income
> >is taxed at lower brackets.
>
> This is a valid point which I've not seen discussed
> anywhere else. I suspect that the assumption most
> are using, as above, is that folks have money outside
> of the retirement plan and that the income from that
> money will be enough to eat up the deductions and
> exemptions. Your analysis assuming no other income
> at all seems exceptional.
You are certainly correct that my scenario assumes that there would not
be much other income. I am sort of assuming that the primary income
after retirement will be from 401K (401K behaves almost exactly like a
deductible IRA) and IRA withdrawals.
> >Finally, there is a psychological issue. The Roth is tax-free today. Can
> >we be certain that it will remain tax-free until our retirment 30 years
> >or so hence ? Future congresses may try to get some tax money out of the
> >Roth withdrawals. The Roth's tax-benefit is in the future, we have not yet
>
> Playing this kind of what-if game is counterproductive. It
> is equally likely that they would put some sort of extra
> tax on regular IRA withdrawals to help pay for the retirements
> of those who didn't save enough for retirement, particularly
> when it comes time to cover the shortfall in SS.
Yes, of course, we cannot guess how tax laws might change in the future.
It just seems more likely to me that a "sock-it-to-the-rich" tax is more
likely to be applied to a Roth IRA ("hey, this rich guy has a tax-free IRA,
can't we get something") than to a regular deductible IRA which is already
facing regular income taxes. On the other hand, if Congress just increases
the regular income tax rates and leaves the Roth IRA alone, the ded.IRA
will LOSE over the Roth IRA. So, yes, this factor is difficult to account
for - best to ignore it.
Also, there are estate tax issues with the ded.IRA where the Roth IRA is
better off, because the money needed to pay income tax on the ded.IRA
will also be subject to estate tax. Ideally, it would be nice to fund
both a ded.IRA and a Roth IRA (as I am planning to do, deductible for my
non-working wife, Roth for me). At the time of retirement, we would have
to manage withdrawals from the different IRAs appropriately to ensure
minimum estate tax, "soak up" the standard deduction/exemptions etc.
> >Given all of these factors, I don't think that the ded. vs Roth issue is a
> >no-brainer decision. In my personal case, I cannot get a ded. IRA, so I
> >am going to start a Roth (Roth is never worse than a non-ded. IRA). On the
>
> Agreed. I am kind of uncomfortable with so many folks
> calling it a no-brainer. The only place where it may
> really be that easy a choice is for folks who can't
> get a ded IRA, like yourself (and myself, actually).
>
> >I really wish that the 2000 limit on an IRA would be raised. That limit
>
> The limit, as I said, is idiotic. And the penalties for
> putting too much in, or not taking enough out when one
> hits their 70s - these are equally idiotic
Well, there is now no penalty for putting too much in - I assume you are
referring to the "excess accumulations" or "excess distributions" penalty,
not the penalty if you accidentally contribute more than 2K/year.
It is nice having such discussions.
- --
Regards
Shankar Prasad
sprasad@eng.sun.com
- ----- End Message 1 -----
>Subject: Re: tax brackets for tax-year 1997?
> From: "Dalmia, Bipin K." <DALMIABK@phibred.com>
> Subject: tax brackets for tax-year 1997?
>
> hello:
>
> where can i find information on the income limits for each tax-bracket
> for the tax-year 1997 (and each year after that). i need the exact
> numbers for married filing joint return to do some year-end
> tax-planning.
Exact numbers of tax-brackets for 1997 are available in the 1040ES
(Estimated Taxes) forms provided by IRS. You can telephone for it
(1-800-TAX-FORM), or get from the website (http://www.irs.ustreas.gov)
or by FTP (ftp.fedworld.gov - anonymous - cd pub ; cd irs-pdf (or irs-ps)).
I personally find FTP the fastest and most efficient way. The MFJ figures
are:
Standard Deduction - 6900. Personal Exemptions - 2650.
Tax (for AGI between 41200 and 99600) : 6180 + 28% (X-41200)
You can get full details from the locations I mentioned above.
> somebody mentioned that he won't be eligible for a deductible IRA but
> his wife would be. does that mean having to file separate returns?
Well, SPOUSAL deductible IRAs are available only for 1998, not 1997. We
don't know what sort of requirements will be added. But, it is MY OPINION
that MFJ will be permitted (just extrapolating from the current SPOUSAL
IRA filing procedures). I also imagine that this will also follow the
current spousal IRA requirements (i.e. the spouse's earned income may not
be important, as long as the combined earned income is more than the total
amount contributed to both people's IRAs). There is nothing in the new
tax law which would restrict the spousal-ded.IRA only to people filing
separately. It simply changes the deductibility phase-out limits for
individuals who are "tainted" by their spouse's participation in a 401K or
equivalent plan. In fact, current IRA tax law discriminates AGAINST people
filing MFS with much lower phase-out limits.
If MFS is required for spousal-ded.IRAs, then it would be VERY disadvantageous
in the case of couples with very different incomes (like mine, where my wife
does not work). In such a case, I would probably give up the spousal
deductible IRA, instead of filing separately.
> what is the 'consensus' on savings for college education for your child?
> i have a 18 month old and haven't done anything yet. the options are:
> (are there more?)
>
> 1. education IRA:
> 2. UGMT (or is that UGTM?) account
> 3. college tuition credits
>
> how do these relate to each other? what are the implications of kiddie
> tax-savings? when will they come up with a flat-tax? :(
This is my opinion, again, not the list's consensus. The education IRA has
too low a limit (500/year) to be worth the effort. Instead, you are better
off funding a SMALL UTMA account (enough to generate income sufficient for
the 650/year tax-free income, and maybe another 650/year at the 15% rate).
Avoid putting much more in the UTMA account to avoid being excessively
penalized for financial aid and/or temptation for the child to get a HUGE
sum of money at 18 and spend it on something other than college. Check if
you can designate the UTMA to pay out at age 21 (or later) instead of 18.
You as the custodian can always make withdrawals for college and related
expenses whenever you wish.
You will probably need to save more than the limited-UTMA-proposed-above
for college expenses. I am leaning towards using the spouse's deductible
IRA for this purpose. This assumes that you (and/or your spouse) have
enough going into your 401K/IRA to cover your retirement. If you still
haven't reached the maximums on the 401K/IRA, you can make additional
contributions mentally earmarked for the child's college. Saving in
the IRA will *NOT* affect financial aid. IRA (but NOT 401K) withdrawals
for college expenses are penalty-free. And, if you can qualify for a
deductible IRA (or 401K), then financially, this works out to be practically
the same as the tax-free Education IRA, but WITHOUT the restrictions that the
money must be spent on the designated child, only on limited "qualified"
education expenses, before age 30 and so on. And, if the child decides
not to go to college, you have the money for your retirement 8-)
Another option is that many states have pre-paid college tuition plan, where
you pay right now (or over the next N years), and then the state guarantees
your child's tuition expenses at the state/public college. I am not sure
about such plans, but you need to look at what happens if the child wants to
go to some other college or does not want to go to college or something like
that. Again, this will probably hurt chances for financial aid.
Be careful about the college tax credit. Going with my "IRA-withdrawals-for
college" will probably preserve your eligibility for the tax credit - since
YOU are spending it - but the added income from the IRA withdrawals might
push you into the phaseout limits. If you use UTMA for most of the expenses,
you may not be eligible for the tax credit as YOU (the taxpayer) did not pay,
(the UTMA Trust paid it) and the Educ.IRA also has a "no-double-dipping"
provision. The college tax credit also phases out at 80K-100K (MFJ) of
income, so you may not get it anyway.
Personally, I will be looking at a UTMA account after some time (due to
personal circumstances, I do not want a UTMA now until my situation is
more certain). The tentative plan is to take tax-free-upto-basis
withdrawals from Roth IRA and withdrawals from deductible IRA for college.
The disadvantage is that, at the time of college, I will have to come up
with the money to pay the taxes on the ded.IRA. withdrawals. The 401K
will be sufficiently funded for retirement. But this is 15-16 years out,
and things might change in the meantime. This plan also needs full
understanding and cooperation between the spouses - hopefully, not an issue !
Any discussions are welcome.
- --
Regards
Shankar Prasad
sprasad@eng.sun.com
------------------------------
Date: Mon, 27 Oct 1997 23:14:11 -0500 (EST)
From: "Larry Archer" <bullfrog@unix.infoserve.net>
Subject: Re: Biweekly vs. Monthly Mortgage Payments
I would consider making bi-weekly mortgage payments as opposed to monthly,
the loan will be paid faster as well as saving thousands in interest...
------------------------------
Date: Mon, 27 Oct 1997 23:15:15 -0500 (EST)
From: jdennis@po3.nsknet.or.jp (John D. Dennis)
Subject: Re: Japanese Markets, Interest Rates, Etc.
For the most thorough discussion I've seen on Japanese finance, visit your
local library and find a newsweekly called "The Economist." In late May
(early June?) of this year they ran a special report (20+ pages) which
discussed the issues related to the Japanse market recently mentioned in
persfin-digest:
--interest rates (and yen-dollar rates) as related to stock prices
--how banks, being major shareholders, affect the market
--cross holdings of shares by banks and other companies
--the impact of pension funds and and life insurance companies
--the nature/effect of Japan's own planned "Big Bang"
--a profile of the typical saver/investor, his options/expectations
--the postal "savings" system as it affects banking
This is often presented in view of how and why it developed (history). Also
discussed is the dual nature of the economy here. One big slice is quite
competitive and efficient (what's connected to the export/import sectors,
large companies) while another, larger slice is archaic (services,
agriculture, distribution, small business).
The following characterizations, though correct, are small glimpses
of a picture that is very complicated and which becomes *much* more
intriguing/amazing when you get into it.
>1) The banks there are hand-in-glove with the companies....
>2) The banks (and other companies) 'invested' in the real-estate bubble
>market of Japan....
>3) The fixed-income market in Japan is very immature....
>4) The holding structures of the various Japanese companies is so
>complex that the usual analysis that one can do regarding the valuation
>of a stand-alone Japanese company (a horrendously complex task in itself
>even with the 10K and balance sheets available in the US) is well nigh
>impossible. The cross-holdings cause this complexity....
>5) Also, since the individual Japanese investor does not tend to invest
>in mutual funds...
>6) Since companies are able to get loans at such favourable rates from
>banks, they find little need to go to the public and borrow....
Another poster recalls the stock market bubble:
>The Japanese stock market had a BIG
>bubble several years back (Nikki was at 36,000 I think). It was
>tremendously overvalued and finally crashed (to 16,000 or so). It is
>still recovering.
My memory is that the market almost hit 39,000. From there it "progressed"
down to 14,000 and (much) later recovered to above 21,000. From there it
has sunk again to the low 17,000 area where it rests today. ((Imagine if
the Dow or S&P did this!!))
Much of the recent turmoil in SE Asia (and the impressive growth that area
experienced just before this, i.e., during Japan's post-bubble years) seems
connected to the way in which those countries, perhaps unwittingly,
positioned their economies in relation to the two giants--Japan and the
U.S. The level of Japan's stock market has little direct effect on those
economies, but the value of its currency has had a strong one. Ten or
twelve years ago the yen passed through 200 to the dollar, eventually hit
80 to the dollar, and is now just above 120 to the dollar. Since SE Asian
currencies were fixed to the dollar, Japan--their main competitor in the
U.S.--was first priced out of, and then back into, the U.S. market. (Add to
this the relative size of the Japanese economy and the emergence of China.)
Sorry for the digression/length.
John
------------------------------
Date: Mon, 27 Oct 1997 23:16:10 -0500 (EST)
From: GeorgeZhang@lunarcorp.com (George Zhang)
Subject: Questions regarding Home Mortgage
I am currently shopping for a home mortgage. The kind of mortgate I
am looking for is 5/25 balloon. The amount of load I am looking for
is about $120,000. I would like to know what kind of deal (rate,
point, closing cost, etc) I could get in today's market.
A while ago, I saw a online calculater with which I could compare
mortgages with different rate, point, closing cost. Unfortunately, I
forgot where was it. Anybody know where it is or some thing similar?
Your response will be greatly appreciated.
George Zhang
E-mail: GeorgeZhang@lunarcorp.com
------------------------------
Date: Mon, 27 Oct 1997 23:16:57 -0500 (EST)
From: Joe Cabrera <toonhead@tiac.net>
Subject: Re: Online Banking For Mac?
Ken Stone <krstone@mindspring.com> asked:
>Does anyone know of a regional New England bank that allows online banking
>with a Mac interface? I currently use Fleece (er, Fleet) Bank but when I
>last inquired, their software was only for Windows.
Sure. BankBoston's own HomeLink software is available for both Macs and
PCs. Get more info at
http://www.bankboston.com/pfs/products/access/homelink.html. I used the
first version of it last year when I temporarily opened a free account they
offered to go up against Fleet ... it was a bit basic, but it worked. But
acct info online was at least a day behind. Hopefully they've improved a
few things.
------------------------------
Date: Mon, 27 Oct 1997 23:17:33 -0500 (EST)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
>(Editor's Comment - You should definitely do it. It's a totally risk free
>"investment" in increasing your net worth. -IK)
>But I think that it would be better to put it in a broad based low expense
>no load mutual fund
> $100 to the mortgage saves maybe 8% (the interest rate) while over
>a 30 year period $100 in equities will probably earn 11% with compunding
>the 3 % difference makes a big difference over time).
Except that the 8% return is an after-tax return, while the
11% is a before tax return. So you also need to take your tax bracket
into account.
Of course, if you have any other debt, such as credit cards,
auto laons, student debt, etc., you should probably pay that off first
before making extra mortgage payments.
>If you must sell the house in a declining market (say to relocate,
>after a hurricane etc) it is better to have less equity tied up in it
I don't have any experience with houses, but I usually find it
is a lot easier to sell something when you own it outright than when
you still owe money on it.
-David Martin
------------------------------
Date: Mon, 27 Oct 1997 23:18:50 -0500 (EST)
From: "David W. Vaughan" <david_vaughan@ibm.net>
Subject: IRS Form 1722?
Hi folks!
Has anyone ever heard of Form 1722 - which does not appear to be listed
at the IRS's very extensive forms site?
(I see on the list of docs required for requesting US naturalization, a
statement: "All IRS Forms 1040 (Income Tax Returns) for the past 5 years
or IRS Form 1722".)
TIA!
------------------------------
Date: Mon, 27 Oct 1997 23:19:32 -0500 (EST)
From: "Schafer, Rick" <schaferr@eng1.otis.com>
Subject: RE: Re: Carleton Sheets
BOB FORD wrote
Subject: Re: Carleton Sheets
>>>>>
>Also, what is the Carlton Sheets program?
CHARLTON SHEETS is just another person in a long line of people that
have
been on TV for over 20 years telling people they can get rich quick in
real
estate.
Does anyone remember Robert Allen, Hal Morris, Dave DelDoto, Richard
Paulson, Barny Zick, Tom Vu, Ed Beckley. They always say it does not
require any of your money to invest in real estate and their tapes will
give you all of the information you need to get rich.
>>>>>
Bob, from your many posts & your years of experience I would not argue
with you about getting rich quick in Real Estate. I have only been in
the rental business for a few years now and although I am in the +
column I am not getting rich quick.
I have to say this tho'. I spent 2 years in graduate school in '93 &
'94. During those 2 yrs I worked 3 days/week (100 mile commute), went
to school (200 mile commute) 2 days/wk, and spent another 15-20 hrs/wk
studying etc. This was at age 40 with a teenager & 2 babies at home.
After I graduated, I began to wonder what would happen if I put the same
kind of effort into improving my financial situation. I look into the
usual MLM's, and I also bought & read books by Robert Allen, Pivar, John
Reed, many others. And yes, I bought Carlton Sheets' package (1/2 price
from another satisfied customer, over the net. Found him at
misc.invest.real-estate). There is a saying: 'Luck is what happens
when preparation meets opportunity'. 6 months later, like the Wicked
Witch of the East, a house fell on me: I was offered a 3 family house
as a gift. Using the techniques, forms, scripts, tapes, and examples
from ALL of my reference material I acquired the house in the most
effective way and was able to use it to acquire 2 more multi's. I plan
to take that further & am now looking at bigger buildings.
Probably with your experience, creating deals like this is a no brainer.
I have spent my career in engineering, so it was all new to me. The
Sheets package is comprehensive, with sample forms, step by step
examples, a kick in the pants to get you started, and even tapes of him
calling sellers. Most of his calls failed to produce any deal, but they
are still part of the package. I would recommend Sheets as _one part_
of a reference library to anyone interested in learning about real
estate investing. It is _not_ a get-rich-quick scheme. It _is_ an
improve-your-financial-picture process.
One thing I have learned -- and you probably know -- is that acquiring
property with little or no money down is the EASY part. The work begins
when you enter the landlord business!!!
Rick Schafer
------------------------------
Date: Mon, 27 Oct 1997 23:20:30 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@deafcfp.com>
Subject: Re: Mortgage Prepayment
The simple suggestion is to pay off other personal, "non-deductible"
finance charged debts or/and other loans with higher finance charges
first. If you have none of those loans but only the mortgage, then you
may pay extra money to the mortgage.
However, in the terms of purchasing dollar power over long period (ie.,
15-25 years), it is cheaper to pay the mortgage regularly and to invest
extra cash elsewhere.
- --
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: Mon, 27 Oct 1997 23:21:53 -0500 (EST)
From: Stephan <stephan@mail.org>
Subject: Re: Paying extra on mortgage
Kathleen asked about paying $100/mo extra on a 30 year mortgage...
Here are two more questions to ask:
How long are you going to live in that house - 5, 10, 20, 30+ years?
(Statistical average is less than 5 years); and
What is the Rate of Inflation over the next 30 years - 1, 3, 5, 7+ % ?
(If you think you'll be staying for 20+ years and believe that the inflation
rate will esculate, then - depending on about 50 other factors- you may
want to pay your future mortgage payments with current (1997) dollars; how
much did a Coke cost 20 years ago ;^) )
Stephan Iscoe
* Useful Links for Business & Personal Success *
* at http://members.tripod.com/~RoundWorld *
------------------------------
Date: Mon, 27 Oct 1997 23:22:43 -0500 (EST)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: Long-Term Care Insurance
>From: "Richard A. Bauer" <owowo@netguard.net>
>Subject: Re: Long-Term Care Insurance
>
>Re the recent thread on this subject - there is an excellent article in
>Bloomberg Personal, November 1997, page 119. It is well balanced
>article. It talks about advantages and affordability and cost of living
>considerations. Per the article 57% of people reaching 65 never enter a
>nursing home. Of those that do, about half will stay less than a year
>and 30% only three months. The whole article is worth reading.
First- other than subscribing where do you find a copy of the Bloomberg
Personal article.
Consumers Reports (11/97) has a number of articles on Long Term Care.
Their figures are that 1/3 of men and 1/2 of women aged 65 will require
long term care (approximately 41% of population assuming equal numbers of
men and women) so Bloomberg's 57$ not requiring care seems consistent. On
the other hand Consumer's states that the average stay is 30 months with
90% staying less than 48 months. A bottom line in the Consumers article is
that if you can afford to drop $160k you can easily skip nursing home
insurance. I suspect that if you are just getting by you don't need it
either.
One thing that bothers me is that most of the statistics that I see on the
subject come from articles/literature/studies which presuppose that you
should be buying Long Term Care Insurance (the guys who run MedicAid
certainly want you to buy)
To me the issues with Long Term Care insurance are -
a) If you have a spouse/dependent at home, can they survive after you spend
down to the Medi-Aid limits
b) Even if you don't, if you survive the long term care, can you afford to
live after discharge.
No to either of the above questions suggests that long term care insurance
may be worth considering.
Avrum Lapin
Upland., CA
------------------------------
Date: Mon, 27 Oct 1997 23:23:34 -0500 (EST)
From: Mary Lou Loomis_Arnold Baranco <baylynx@wenet.net>
Subject: Real Estate Question: Sell now or wait?
I own a single family home in the San Francisco Bay Area. I purchased
the house for investment purposes in 1986 and it has always been a
rental. The community the property is located in is currently undergoing
a phase out of rent control. It will be totally exempt from government
mandated rent control by Jan 1999.
I recently invested over $15k in upgrading and improving the home with
the thought of selling. The place is vacant and I still pay a mortgage,
taxes & insurance. Real estate is on the upswing here and recent
comparable home sales suggest I could probably get $150k for it now. I
paid around $100, but have been depreciating it over the past eleven
years.
If and when I sell, I will not be reinvesting in real estate. I'm
tired of being a landlord. Plus, having experienced a very fickle real
estate market, I would prefer to put my money to work in no-load mutual
funds (which I already own and am much more comfortable with.)
Questions:
1) If I sell, how will the depreciation I have already taken impact my
bottom line?.
2) How does depreciation affect the capital gains taxes I will have to
pay?
It seems that depreciation has always been my friend at tax time, but how
will it rear it's ugly head when I sell this property?
Your thoughts, advice and constructive comments are welcome.
Mary Lou
------------------------------
Date: Mon, 27 Oct 1997 23:24:58 -0500 (EST)
From: "Cal Lester C.L.U." <Cal_Lester@classic.msn.com>
Subject: RE: Long Term Care Insurance
>From: "Richard A. Bauer" <owowo@netguard.net>
>Subject: Re: Long-Term Care Insurance
Re the recent thread on this subject - there is an excellent article in
Bloomberg Personal, November 1997, page 119. It is well balanced
article. It talks about advantages and affordability and cost of living
considerations. Per the article 57% of people reaching 65 never enter a
nursing home. Of those that do, about half will stay less than a year
and 30% only three months. The whole article is worth reading.
Richard A. Bauer St. Louis, MO
http://www.netguard.net/~owowo/index.htm
>>>> Richard, did you ever notice that when the TV newscaster reports that
there is a 30% chance of showers, that invariably YOU happen to be in that
particular area where it IS raining ??
For those that can afford the EXTRA cash outlay ( generally 40 to 50% EXTRA )
they should investigate the Return of Premium riders that are available from
various carriers. Some return a portion of the ENTIRE PREMIUM PAID IN TO DATE
every 5 or 10 years.
Cal Lester CLU
------------------------------
Date: Mon, 27 Oct 1997 23:25:38 -0500 (EST)
From: Chilkunda Rajesh <Rajc@donacmn.com>
Subject: What is "tax year of 12 full months"
Hi
I and my wife have very little taxes witheld for '97 from our income (we
file jointly), though this amount is equal to our last year's ('96) tax
liability.
Last year, I worked from Jan to Dec '96 whereas my wife only worked part
of the year. Will we still qualify for the "tax year of 12 full months"
exception to the penalty for not having enough taxes witheld in '97?
I realize I can still make estimated payments now, but really would like
to avoid it if I can....
Thanks in advance.
Rajesh
------------------------------
Date: Mon, 27 Oct 1997 23:26:32 -0500 (EST)
From: Steve Ford <stevford@dave-world.net>
Subject: College fund for 6 year old?
A couple questions for you "experts" out there.
1. Is it better/worse/no difference for the parents to have assets in
their names versus the children for purposes of college financial aid
formulas? Family of 5, AGI of $80,000, junior and senior in high school
now.
2. To plan for our 6 year old's education, what are our best options
for a 12 year window? We are willing to take some risk.
Thanks.
------------------------------
Date: Mon, 27 Oct 1997 23:27:27 -0500 (EST)
From: "Anderson, Alfred I." <anderson@mayo.edu>
Subject: Get Rich Quick - Real Estate - $0 Down?
For what it is worth, I saw the last half of an Info-Mercial on a UHF channel
last night. Some guy (didn't get his name) was stressing the benefits of his
program. Apparently we are to send for his tapes (audio, video, or on a
CD-ROM) and he will share his program on how to buy real estate property with
no money down (even if you have bad credit) and either sell it for a huge
profit or rent it out and get a great cash-flow.
Three "easy" payments of $59.95/month with a full money-back satisfaction
guarantee.
I called the 800 number and told the individual I missed all but the end of
the program where the number was shown but I was interested. Could they send
me a printed description of the tapes?
He answered "No, we don't have anything to mail out". Nothing. I then asked
for another number to call (thinking this was just an ordering site) and the
response was that this was the main office but they have no promotional
material to mail out. He suggested I wait for the InfoMercial to be shown
again.
I asked if he knew when I could see it again and he hung up on me.
I got to thinking about this..... Calling for information to be mailed to you
in advance of any "non-written promotion" might not be a bad idea. Who knows
what "guaranteed money back" means unless it is in writing.....
Thoughts? (Anyone know of the program??)
***************************************************************
* Alfred Anderson OV ID: AP00085 Internet: anderson@mayo.edu *
* Mayo Foundation (507)284-9123 Pager: 4-6014 *
***************************************************************
------------------------------
End of persfin-digest V4 #97
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