Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #98
Date: Wed, 29 Oct 1997 21:05:55 -0500 (EST)
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persfin-digest Wednesday, October 29 1997 Volume 04 : Number 098
IN THIS ISSUE:
ADVERTISEMENT: LAN ACCESS TO MCI MAIL
re: Tuition and IRA withdrawals
3 free tracking portfolios of 50 each- or more
Other people writing your checks
Almost Teenager + Mutual funds
Question on Roth vs Education IRA
mortgage refinance?
Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
Spreadsheets and Y2K Problem
Re: Yet another Roth IRA question
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Date: Wed, 29 Oct 1997 20:47:57 -0500 (EST)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
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------------------------------
Date: Wed, 29 Oct 1997 20:49:07 -0500 (EST)
From: TaxPlanner@aol.com
Subject: re: Tuition and IRA withdrawals
Responding to the question: "Is it true that one is able to withdraw up to
$10,000 from an IRA without the 10% penalty if it's for tuition?"
The early withdrawal tax does not apply to IRA distributions to pay for
"qualified higher education expenses" (such as tuition) of the taxpayer, the
taxpayer's spouse, or any child or grandchild of the taxpayer or the
taxpayer's spouse.
This provision is effective for distributions made after December 31, 1997
with respect to tuition paid for education furnished in academic periods
beginning after that date.
Certain reductions apply; i.e., the amount of "qualified higher education
expense" for any taxable year must be reduced by the amount of certain
scholarships, educational assistance allowances, and certain other payments
(other than a gift, bequest, devise, or inhteritance) that are excludable
from gross income.
By the way, unlike the "first-time homebuyer" exception to the 10% tax, I
don't see, in the 1997 tax tax, any reference to a $10,000 limit with respect
to education expense withdrawals. Anybody have any comments on this?
Edie Silvestri
TaxPlanner@aol.com
------------------------------
Date: Wed, 29 Oct 1997 20:50:52 -0500 (EST)
From: "Cajun Joe" <Broutek@worldnet.att.net>
Subject: 3 free tracking portfolios of 50 each- or more
Hello - To those of you who like to track portfolios. Infobeat at
[http://www.infobeat.com.] will allow you to have 3 portfolios of 50
funds each (150 funds total).
Each day from Monday to Friday, they will Email you the days closing
prices of each portfolio. On Saturday they will Email you the weeks
summation of your gains / losses.The portfolios can then be cut and
pasted into Microsoft Excel from the Emails. This is all free.
If 3 portfolios is not enough, you can go to any on line Email service
center, and create as many new Email addresses as you wish. Then with
Infobeat create 3 more new portfolios for each new Email address that
you have. Infobeat understands this tactic and fully approves of it - I
asked them.
If anyone needs any help in this regard - feel free to Email me at
[broutek@worldnet.att.net] - - - - Cajun Joe
------------------------------
Date: Wed, 29 Oct 1997 20:52:04 -0500 (EST)
From: Alfred Anderson <anderson@alum.mit.edu>
Subject: 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?
I was concerned about this too. I asked my banker about this and they
replied that, should this happen, the bank would underwrite the cost.
In reality, the banks today do not do signature verification on each
check they process.... too much volume. So, it is less expensive for
the bank to deal with the error exceptions than to validate each check.
You're right... this does make me nervous too.
- --
*****************************************************
* Alfred Anderson Voice: 507-284-9123 *
* Mayo Foundation Internet: anderson@mayo.edu *
* Rochester, MN *
*****************************************************
------------------------------
Date: Wed, 29 Oct 1997 20:52:50 -0500 (EST)
From: Steven Klein <SKLEIN@snm.org>
Subject: Almost Teenager + Mutual funds
My 11year old delivers newspapers. He is interested in investing in a
mutual fund for expenses down the road. However, I am looking for a
fund family that is right for kids. What he wants is low mininum to open
account ($250.00 or less) and systematic investments not be a
requirement. He wants to be able to put money in as he feels like it.
Does anyone know of a fund family with this low mininum and does not
require a monthly investment?
Steve
------------------------------
Date: Wed, 29 Oct 1997 20:53:46 -0500 (EST)
From: Bhupinder Singh <Bhupinder.Singh@bentley.com>
Subject: Question on Roth vs Education IRA
If I can withdraw without penalty or have to pay income tax, from a Roth
IRA account for my kids education, why would I use the Education IRA,
unless of course that the money was not enough from the Roth.
Or am I missing some aspect of the Roth IRA ?
The advantage being that the Roth IRA would not necessarily have to be
used for education, in case I am lucky and my kids are Einstein and
Tiger Woods :-). Also I am not sure if I have an Education IRA, how does
that show up in financial aid calculations for need-based assistance. Or
how do IRA's, 401K's show up as, when a college is figuring out how much
one can afford to pay, for one's kids education ?
Bhupinder Singh
------------------------------
Date: Wed, 29 Oct 1997 20:56:13 -0500 (EST)
From: Tim Brown <Tim.D.Brown@MCI.Com>
Subject: mortgage refinance?
A simple question which may save me some embarrassment....
I recently purchase a condo with a mortgage from First Union which falls
under their program for the Community Reinvestment Act. 3% down, no
PMI and 7.5% fixed (30 years). I made some home improvements which
I'd like to attempt to finance w/in a mortgage. I have virtually no
equity in the place (6 months) but I'm not sure if they will re-finance
simply on a higher appraisal.
Basically I want to refinance for cashflow purposes and to have the home
improvements @ a low interest rate. I am really not too worried about
the break-even analysis on the refinance fees. Thanks!
------------------------------
Date: Wed, 29 Oct 1997 20:57:38 -0500 (EST)
From: Stephen Brodeur <sbrodeur@draper.com>
Subject: Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
>Subject: Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
>> $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).
DM> Except that the 8% return is an after-tax return, while the
DM>11% is a before tax return. So you also need to take your tax bracket
DM>into account.
I disagree. The 8% mortgage prepayment return is the same as a *taxable*
investment with an 8% return. If you prepay your mortgage to save that 8%
in interest, you no longer get the benefit of the tax deduction you would
have received if you had paid that interest. For every $100, you save $8 in
interest a year, reducing your interest deduction by $8 a year, which is
equivalent to increasing your taxable income by $8 a year. A taxable
investment that returns 8% a year would also increase your taxable income
by 8$ a year. Same thing.
Note that this assumes that the investment return is produced so that it is
recognized as a steady (flat) income stream taxable as normal income
annually (like interest on a CD). It gets more complicated if capital gains
are alos involved. It also assumes that you can take advantage of all of
your mortgage interest as a deduction (no alternative minimum tax, etc.).
- -Steve Brodeur
sbrodeur@draper.com
standard disclaimer. just me. not a professional. opinion, not advice.
------------------------------
Date: Wed, 29 Oct 1997 20:58:32 -0500 (EST)
From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: Re: Pay an extra $100/month on a 30 Year, $200K Mortgage?
> >............... snip ..............>
> > $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.
.............. snip .................
If you have an 8% mortgage, then the 8% is a *pre-tax* return.
Lily Chen
am302@freenet.buffalo.edu
------------------------------
Date: Wed, 29 Oct 1997 20:59:48 -0500 (EST)
From: "Robert Hartwig"<Robert_Hartwig@swissre.com>
Subject: Spreadsheets and Y2K Problem
Fellow Persfinners:
Has anyone encountered and solved the following problem using 1-2-3 or
Excel?
Frequently, when I model cash flows I do it over a long time horizon--say
1995 to 2025. Often the flows must be graphed but the horizontal axis
labels do not fit along the horizontal access (too crowded) (I know about
changing font size, orientation, etc.) I typically like to use the last 2
digits of the year to save space and make the chart look less cluttered,
but the only way to get Excel or Lotus to print out "00" for the year 2000
or "01" for the year 2001, etc., is to convert those numeric entries to
labels. Having to do this is tedious and also makes creating a formula for
the year labels impossible, as some labels are numeric while others are
text.
In short, Does 1-2-3 or Excel have a way of handling this? Is there a way
to get a spreadsheet (via some date format, perhaps) to recognize that "00"
comes after "99"? Obviously I expect this problem to occur virtually every
day for the next few decades, so I'd like to develop a permanent solution.
For the statisticians among you, I note that SAS has long since had a
solution to this problem. Using the CUTOFF command (e.g., CUTOFF=50;) will
make SAS recognize any 2-digit year with a value under 50 as coming in the
next century, not early in this one. Example: "10" is interpreted as the
year 2010 and not 1910.
Thanks.
Bob
------------------------------
Date: Wed, 29 Oct 1997 21:01:45 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: Yet another Roth IRA question
>From: Rich Carreiro <rlcarr@animato.pn.com>
>Subject: Re: Yet another Roth IRA question
>>The folks at Strong funds recently informed me that when I transfer
>>deductible contributions from a regular IRA to a Roth IRA, the taxes
>>due can be paid out of the principal in the IRA, by virtue of a
>>premature withdrawal of principal which would not be subject to a 10%
>>penalty.
I> don't know if it is true or false, but I wouldn't do it anyway
>(unless I had no choice). Paying the taxes out of the IRA funds
>reduces the amount of money that can grow (and be withdrawn) tax free.
>By paying the taxes out-of-pocket you are in effect making a
>contribution (the taxes paid) to the Roth.
I agree with Rich's logic. In addition the people at Strong gave you some
bad advice. Money withdrawn from a regular IRA, and not deposited in the
ROTH IRA is subject to the 10% penalty.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
<www.nmu.edu/instruct/business/sfoulks/>
------------------------------
End of persfin-digest V4 #98
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