Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #103
Date: Mon, 17 Nov 1997 23:03:40 -0500 (EST)
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persfin-digest Monday, November 17 1997 Volume 04 : Number 103
IN THIS ISSUE:
ADVERTISEMENT: domainTNG
Car costs: We Like Saturns
Credit Cards w/Frequent Flyer on any airline? (AMEX)
Re: Online Brokers - How The Performed During 500 Point Drop
web site for pink sheet stocks?
paying for wife's health insurance
Re: E-Investing?
What does the Medical School Do With Leftover Body Parts?
Mutual-Fund Listings on the Web
Re: Employee Payment for Project at Fixed Price Legal?
Re: 125% Mortgage
Re: I Want to Run My Accounts According to Hoyle
re: ?mortgage loan thoughts?
Re: Bob Ford's Checklist on Death - Thanks!
RE: MAKE A WILL
tax-deductible IRA
RE: 1997 Tax Question
Deductible IRA Question
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Date: Mon, 17 Nov 1997 21:38:52 -0500 (EST)
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------------------------------
Date: Mon, 17 Nov 1997 21:39:56 -0500 (EST)
From: maness@sdcoe.k12.us (Jay Maness)
Subject: Car costs: We Like Saturns
This is anecdotal.
My wife and I have decided to use Saturns and maintain them well.
My wife and I are completely enamored with Saturns. We love the cars but
love the dealer more! We have the feeling that the employees of Saturn
truly have the interests of the customer foremost in mind.
Saturns are relatively inexpensive, rate fairly high in Consumer Reports
surveys, have quite high resale values. So, my advice is to buy a new
Saturn equipped the way you want it. If you are conveniently close to a
high school with an automotive department, have them do your scheduled
fluid changes. Have the dealer do the other required maintenance and enter
the fluid changes done at the high school into their data base.
If you are able to self insure, carry a million dollar umbrella insurance
policy, but only carry liability insurance on the car if you perceive your
risk to the car to be low.
The cars are reliable, so do not buy an extended warranty.
Personal experience: My 92 Saturn required a valve job at about 60,000
miles. This was an anomaly. The cars very rarely develop that type of
problem. The dealer knew that I had religously maintained the vehicle
according to the specs, so they ate half the cost of the valve job, despite
the fact that I did not have an extended warranty and the new car warranty
had expired.
We plan to drive our Saturns until they have about 200,000 miles on them.
Do not go with the cheapest vehicle you can find if you value your time and
convenience.
According to Car Talk, the cheapest way to own an automobile is to buy an
old, used vehicle that has been well maintained. Then, when something
breaks down, get it fixed. Unfortunately, by taking this route you have
high costs in inconvenience and in the risk of standing by the side of the
road.
Alternative suggestion: Read the Consumer Reports car issues and follow
their recommendatations.
Best of luck
Jay Maness
------------------------------
Date: Mon, 17 Nov 1997 21:40:46 -0500 (EST)
From: John <kahuna@financier.com>
Subject: Credit Cards w/Frequent Flyer on any airline? (AMEX)
There is the annual fee as IK mentioned. But did you know that if you
are using MCI or want to sign up with them, they will reimburse the $55
annual cost of the AMEX fee if you request to join the MCI/AMEX program.
If you drop MCI within the year, I believe they will prorate the credit
over the months you had MCI as your long distance carrier. Of course,
there is another annual fee to belong to AMEX's membership miles. But
wanted to tell y'all about the MCI offer.
------------------------------
Date: Mon, 17 Nov 1997 21:41:38 -0500 (EST)
From: John <kahuna@financier.com>
Subject: Re: Online Brokers - How The Performed During 500 Point Drop
With the big switch by investors to online brokers, you might like to
see the survey conducted after the 500 point drop earlier this month and
how the online brokers performed on this busy day.
http://www.thestreet.com/Markets/marketfeatures/24397_10301997.html
------------------------------
Date: Mon, 17 Nov 1997 21:42:46 -0500 (EST)
From: eric <eric_marcus@compuserve.com>
Subject: web site for pink sheet stocks?
Does anyone know if there is a web site for "pink sheet" stocks?
------------------------------
Date: Mon, 17 Nov 1997 21:44:59 -0500 (EST)
From: "Jim Reed" <jreed1@airmail.net>
Subject: paying for wife's health insurance
Al Kondo wrote:
>I run a small business and I recently took on my first employee... my
>wife! I am trying to do everything according to Hoyle... but I'm
>sure a few things will slip through the cracks. One of my questions
>is "Do I have to formerly write my wife a pay check every month?" I
>neglected to do so for the first two months, and then I began to
>wonder about it.
>
>Also, I am setting up my company's health plan whereby I will pay for
>all of my emloyees' health expenses as a benefit. As my wife is my
>only employee (and I don't expect to hire anyone else), this type of
>plan has beneficial tax consequence according to my accountant. Has
>anyone else tried something like this?
Yes, I've been doing this for a couple of years now. Your situation and
mine are very similar. My wife and I have a sole proprietorship with my
wife as the only employee.
Yes, she gets a payroll check (with all the standard payroll taxes
deducted and paid). You will need to issue her payroll checks to do what
you want, I believe.
I first found out about this from a plan call BizPlan which you can find
out about at the web site for the National Association for the
Self-Employed (NASE). I don't have their web site address in front of me
right now, but I believe your search engine can probably find it. If you
have any problems finding it, let me know and I will look it up for you.
My wife and I may be changing what we're doing next year however. We now
have a sub-s corporation that has a health plan written into it, so our
corporation may be paying all the health insurance and health expenses
in the future.
Kindest regards,
Jim, in Texas
jreed1@airmail.net
------------------------------
Date: Mon, 17 Nov 1997 21:48:46 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: E-Investing?
>Hi. I have a short question:
>Anyone find a good electronic investing firm to do trades over the web which
>doesn't cost too much?
Datek (www.datek.com ?) supposedly charges a flat $9.95.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 17 Nov 1997 21:52:26 -0500 (EST)
From: John Wallace <JWallace@karta.com>
Subject: What does the Medical School Do With Leftover Body Parts?
>From: BOB FORD <BOB_FORD@compuserve.com>
> B. CREMATION WILL REDUCE COSTS
> 1. YOU CAN KEEP THE URN A HOME. IT DOES NOT NEED TO
> BE BURIED.
> C. GIVE YOUR BODY TO A MEDICAL SCHOOL TO SAVE MONEY
> D. EMBALMING IS NOT A REQUIREMENT
[John Wallace] Question: If you donate your body to a Medical school
(either for Research and/or for Organ Donations); Does the Medical School
normally then take care of the cremation of the "Leftovers" and eventually
return just a box of ashes to your family, or what ?? And on what kind of
time frame, usually ??
------------------------------
Date: Mon, 17 Nov 1997 21:53:28 -0500 (EST)
From: "David J. Churchill" <churchilld@worldnet.att.net>
Subject: Mutual-Fund Listings on the Web
Does anyone know if there is a site such as QUICKEN.COM which not only
allows one to obtain quotes and graphical-performance information for
mutual funds, but also allows an investor to tell the difference between
a decline in share price due to market fluctuation and a $$ distribution
from the particular fund?
Thanks.
Regards,
Dave Churchill
------------------------------
Date: Mon, 17 Nov 1997 21:54:57 -0500 (EST)
From: Howard I Cohen <hic@world.std.com>
Subject: Re: Employee Payment for Project at Fixed Price Legal?
>
> Is it legal for an employer to ask an employee who is normally paid by th
> hour to complete a project at a fixed price to the employer based on
> employee's own estimate?
- --snip--
If it is legal, under what types of
> situations or rules would it be subject to? If it is illegal, a referenc
> to what part of the law prohibiting it would be appreciated.
>
> Thanks in advance for any information.
>
> ------------------------------
>
Dear Mr. Koyn:
I'm not an attorney, so I can't speak to the legal question of an employer
proposing a fixed price arrangement. But I spend many years working for a
civilian contractor having contracts with DOD, both cost plus and fixed
price. I also spent many years working as an independent contractor nee
consultant. I know the pitfalls and downside of many contractual
arrangements for technical items. So let me suggest some issues for you to
address to your employer, all aimed at suggesting that he (she) is way off
base.
1) If there is to be penalty for being late, there should be a reward for
being early.
2) Your contract should be full of all the exceptions that relate to
strikes, earthquakes, volcanoes, acts of war, terrorism, your employer's
plant burning down, and every other event, natural or unnatural that could
impact your schedule performance.
3) Now let's address resources. Your contract should also guarantee that
your employer will provide all necessary data, specifications, performance
requirements, tools, test equipment, consumable materials, as well as
office, plant, lab, factory and warehouse space. (Reserved parking space??)
And don't overlook power, heat, toilet facilities, procurement resources
like buyers, receivers (as in shipping/recieving), incoming inspection,
handling of defective items, storage in secure space - so no other employee
on a fixed price schedule will scoop your material, and on and on. In this
realm you should absolutely nullify the contract-or automatically change the
completion date if a vendor or an internal service group can't deliver to
YOUR schedule and performance requirements.
4) here is a very critical one. Negotiate absolutely the acceptance criteria
of your work. If it is a physical thing, understand who is going to judge
that you met your goals? Including arbitrators, if necessay. Will you be
working to a 'design' goal or a performance' goal? With DOD, on fixed price
we build to a design goal. The rocket had to he so long, and DESIGNED to
carry so much pay load. If the agency wanted to see if it would go to the
moon, well, that's extra. How long will the tests last and if they fail,
what are the rework, repair and remedy options. For example, NASA required
on many critical items that NO repairs be done. If the amplifier failed
because a transistor crapped out, don't repair it, throw it away and try
again. Of course if the transistor could be replaced by unplugging and
replugging, that was okay. Anything that requiring applying the heat of a
soldering iron, forget it.
4) Now, here's the good one, and probably the best one to sink the whole
idea. It involves intellectual property rights. Part of your risk should
give you license free (no cost) rights to the items your involved with. This
would include concepts, designs, configurations, processes, etc. that came
out of the work. Remember Bill Gates. Bill to IBM: 'I'll only charge you so
much a copy for DOS 1.0, but you grant me unlimited use of it myself!!' The
rest is history.
In the way of wrap up let me remind you of a couple of things. If your
employer is asking for more than an ordinary employee is expected to give
- -like best effort 40 hours per week, then employee is ABSOLUTELY entitled to
ask for things also. And it is now a give and take negotiation. How badly
does he want you to work fixed price? How far can he go in creating an
environment to guarantee that pitfalls you cannot control wont be a possible
problem?
The real bottom line is he shouldn't want you to accept such an offer. If
you are bright and sharp and capable of doing the work, he should recognize
that, treat you like a valued employee, give you all the resources you need,
explain the urgency of the schedule and plan (budget, performance or
whatever) and look to you to break your proverbial ass 'for the greater
good.' This would include your working nights and weekends because you care
about the company, not yourself. Alternatively, if you're stupid enough to
buy into his madness with all the caveats I outlined, then he has the wrong
guy and you'll both get into trouble.
If you buy into my argument, tell him you simply can't accept his proposal,
and if he'd like your resignation, you would RELUCTANTLY give it to him.
Having managed hundreds of engineers at a major aerospace company (I'll name
it if you'd like), the carrot - team responsibility, pull together, a free
lunch or beer bust occasionally, along with decent pay raises, promotions,
citations for good work, etc. yielded far better results. If one of my key
people threatened to resign - for any reason - I'd treat him or her as
someone very special and try as best I could to discourage it. And these
tactics still work. The better companys believe in carrot, not stick.
If he's serious, plan to get out. He simply does not understand management's
responsibility. A company makes its profit on developing, manufacturing and
marketing good products, not squeezing creative (or any) employees.
Good luck.
Howard
Howard I. Cohen, Director
CAD - Special Interest Group
Boston Computer Society
<hic@tiac.net>
------------------------------
Date: Mon, 17 Nov 1997 21:55:46 -0500 (EST)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: 125% Mortgage
In response to a recent post on the subject of 125% mortgages the following
is a summary from a Robert J Bruss* column in to-day's (11/16) LA Times:
The 125% loan is a combination of a real estate loan and a personal loan.
This is considered a high risk loan
Rates run between 11% and 16%. Rates seem to be a bargain with respect to
credit card rates but they are very long term (15 to 20 years) loans .
(for comparison this week in LA fixed rate Home equity 2nd's are running
9-10% for 80% Loan to Value with 0 points)
Lenders ususally insist that the borrower has a very good credit rating.
* Bruss's column appears in other newspapers's real estate sections and has
some good information once in a while.
Avrum Lapin
Upland., CA
------------------------------
Date: Mon, 17 Nov 1997 21:56:29 -0500 (EST)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: I Want to Run My Accounts According to Hoyle
>Also, I am setting up my company's health plan whereby I will pay for
>all of my emloyees' health expenses as a benefit. As my wife is my
>only employee (and I don't expect to hire anyone else), this type of
>plan has beneficial tax consequence according to my accountant. Has
>anyone else tried something like this?
>
Your health insurance premium will be a deductible expense from your
business paid for with pretax dollars. This is the best deal. You may
find it difficult to find insurers who will offer a group policy with only
two participants but you might be able to buy through your local Chamber of
Commerce. You will want to see if employee and spouse is a better deal than
two employees.
Avrum Lapin
Upland., CA
------------------------------
Date: Mon, 17 Nov 1997 21:57:19 -0500 (EST)
From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
Subject: re: ?mortgage loan thoughts?
> > I am just curious. The "125% loan" refers to 125% of the purchase
> > price? or 125% of appraised value?
>
> It is always 125% of appraised value.
What is the reason/basis/rationale for giving you a loan that is 125% of
appraised value? The loans have to be documented. [They can't simply say
that they think the appraised value is lower than it should be. If they can
do that, they don't need an appraisal to begin with.]
Lily Chen
am302@freenet.buffalo.edu
------------------------------
Date: Mon, 17 Nov 1997 21:58:02 -0500 (EST)
From: KATHLEEN OWENS <ACE.KOWENS@MEMO.ACEHARDWARE.COM>
Subject: Re: Bob Ford's Checklist on Death - Thanks!
I think Bob Ford's Checklist for the deceased is the best. This
is a subject most of us never want to think of, however, if it is
done, can take A LOT of unnecessary stress off the grieving.
Thanks for a job well done, Bob!
------------------------------
Date: Mon, 17 Nov 1997 21:59:13 -0500 (EST)
From: Jeff Morgan <Morgajs@parsec.com>
Subject: RE: MAKE A WILL
Bob Ford wrote:
>My sympathy on the loss of your father. Death is something most of us
of
>us do not like to think about or plan for. However planning for your
>death is a priceless gift we can give our loved ones. The following
are
>some notes from a class I teach on retirement planning. I think they
>might be a benefit to persfiners. Please note that I am NOT an
attorney
>and the following is not legal advice. It is just my opinion. Sorry
that
>the notes all in caps.
>
>Also note the following list are not complete. There will be other
things
>that need to be done on a death.
Thank you for your thoughts, Bob. The items on your list have
come in handy already as my wife and I embark on the long
overdue task of putting our own affairs in order.
I'd like to add some comments to your list. Since the following
is cut and pasted from another mail message, MS Exchange may
add some attribution marks (>), but your list is in caps, and my
suggestions are in lowercase. I hope you and others may find it
useful. I'm not an attorney either, these are just some thoughts
based on my recent experiences.
3. DO NOT LEAVE THOSE DECISIONS TO YOUR SPOUSE OR
RELATIVES. LET THEM KNOW WHERE THESE INSTRUCTIONS ARE
KEPT AND WHAT THEY ARE
A. DO NOT PUT THEM IN A SAFE DEPOSIT BOX
In some cases, safe deposit boxes may be sealed at death of a tenant,
and opened only when state and federal tax agents are present. This
may even be true in the case of the death of *one* of the tenants of
a jointly held box.
F. SOME AIRLINES WILL GIVE YOU A SPECIAL FARE TO GO TO A
FUNERAL OR TO TRANSPORT A CASKET.
United and Delta wanted the mortuary name and number, and the director's
name.
They were helpful in mentioning that we could have received a lower fare
had
we given two weeks prior notice.........
INCLUDE IN YOUR OPEN AT MY DEATH FILE
A COPY OF YOUR BIRTH CERTIFICATE
A *certified* copy from the state, not a Xerox.
THE LOCATION OF YOUR BIRTH AND THE DATE OF YOUR BIRTH
YOUR MOTHER'S MAIDEN NAME YOUR FATHERS NAME
The mortuary wanted birthdays and birthplaces for Gran and Gramps, also.
YOUR WISHES ABOUT AN AUTOPSY
This may not be your decision. It may be made for you by a coroner or
medical examiner.
YOUR WISHES FOR THE DISPOSITION OF SMALL ITEMS NOT IN
YOUR WILL SUCH AS, CLOTHES, PERSONAL EFFECTS, BOOKS,
ETC
Keep records for tax purposes. These may be charitable donations if
given away.
DISPOSITION OF ANY OF YOUR SPERM HELD IN A SPERM BANK
And eggs in an egg bank?
A TAPE OR VIDEO RECORDING IN YOUR OWN VOICE EXPRESSING
YOUR WISHES WILL BE GREATLY APPRECIATED BY YOUR
NEXT OF KIN
Keep in mind, though, that video *wills* are not valid in all states.
3. THE CHECK BOOKS SHOULD BE LOCATED AND LOCKED UP.
Ask the bank(s) about automatic deposits and payments.
If a balance is low, make sure service charges don't zero the account.
4. AN INVENTORY OF EVERYTHING IN THE HOME SHOULD BE
MADE
Cheap and easy to rent a camcorder and write it all down later.
5. A HOLD ON THE MAIL SHOULD BE TURNED IN AT THE POST
OFFICE
Or mail can be forwarded to next of kin.
8. THE WATER SHOULD BE SHUT OFF
9. THE GAS/ELECTRICITY SHOULD BE SHUT OFF EXCEPT IN
WINTER
Unless the home and yard must be maintained to keep the
house ready for eventual sale.
10. THE FIRE INSURANCE SHOULD BE CHECKED TO SEE WHEN IT
EXPIRES
And kept in force! Same for flood, earthquake, liability umbrellas,
etc.
12. THE PHONE COMPANY SHOULD BE NOTIFIED TO DISCONNECT
THE PHONE.
Or you may want to hook up an answering machine so you can
retrieve messages remotely. Use a male voice to record a message.
Say "WE" can't come to the phone... etc. Don't give any details.
Also, you may want to have the phone call install an "anonymous
call reject" feature.
Most police departments will put the house on a watch list,
and drive by now and then to take a look.
16. NEWSPAPERS SHOULD BE STOPPED
And magazines, record and book clubs, etc.
17. THE DECEASED MINISTER SHOULD BE NOTIFIED OF THE DEATH
I might rephrase that one! :-)
4. CANCEL AUTO INSURANCE
Strongly disagree! If *anyone* happens to have an accident without
liability insurance while using the deceased's vehicle, the *estate* is
liable! It's cheap insurance, keep it in effect until the vehicle is
retitled
and your own insurance provides coverage.
6. GET SEVERAL COPIES OF THE DEATH CERTIFICATE
Twice as many as you think you'll need. A two week wait the first time,
four to six weeks for subsequent orders. California's are $8.00 each.
11. CANCEL ALL CREDIT CARDS
Usually, card companies and banks will require a certified copy
of the death certificate.
A. PAY ALL CREDIT CARD BILLS
Don't forget homeowner's insurance, auto insurance, and the mortgage!
Car payments, too. Wouldn't want any repos or foreclosures at this
time.
11. COLLECT ANY ANNUITY
Don't forget IRAs, 401(k)s, 403(b)s, etc.
12. COLLECT ANY SOCIAL SECURITY BENEFITS ($255 BURIAL)
As far as I know, this applies only to surviving spouses, not to adult
children. It *may* be a benefit for minor children, I don't know.
Thanks again for your list, Bob. It's been very useful so far.
- --
Jeff Morgan - morgajs@parsec.com
------------------------------
Date: Mon, 17 Nov 1997 21:59:57 -0500 (EST)
From: Yan Zheng <yzheng@saturn.vcu.edu>
Subject: tax-deductible IRA
I know there have been enormous discussions on Roth and non tax-deductible
IRA. However, my question is on the tax-deductible IRA and Roth. A friend
of mine can make a $2000 tax-deductible IRA in 1997. There are two questions.
(1) By IRS rule, one can open an IRA before April 15 of next year in order
to take the advantage of tax deductibility for the year. Roth starts on
Jan 1st, 1998. Can he open an IRA at any time before April and convert it
to Roth the next day in 1998? We think in this way, he can have $2000 tax
deductible for 1997 and does not have to pay much tax for withdrawal. But
is it allowed?
(2). This friend is 58 years old. At the moment he is at 28% tax rate,
but he thinks his tax status may go lower if he retires. Is it worth to
convert the IRA to Roth? Also, what are good investment strategies for an
old man who does not have any dependents' expenses any more and all he
needs is for himself? He projects he can live till at least 75. What can
and should he do as investment for the next 15 years?
I greatly appreciate it if someone can help provide answers to these
questions.
Yan Zheng
------------------------------
Date: Mon, 17 Nov 1997 22:01:18 -0500 (EST)
From: "Blair, Frank" <fdb@plcmc.lib.nc.us>
Subject: RE: 1997 Tax Question
HELP!! I try to keep close watch on my federal taxes thru the year
and this year I reduced my withholding to account for the $400 per
child tax credit (2 kids) which I should qualify for (there is some
income limit, isn't there?). However I was reading something last
night that this credit doesn't start until 1998! Is this true? If
this credit doesn't apply for the 1997 tax year, then I am
underwithheld by $800 - $1000 and could possibly owe a penalty. Does
anyone know the details of this tax credit.
The following is on the Taxpayer Relief Act from the IRS' website:
The Act provides taxpayers with a child tax credit for each qualifying
child under 17 years of age.
The credit is first available for the 1998 taxable year, and so may be
claimed on tax returns to be filed in 1999. For that first year, taxpayers
may claim a maximum credit of $400 per qualifying child.
The maximum credit increases to $500 for subsequent years. This credit is
phased out by $50 for each $1,000 of the taxpayer's modified adjusted
gross income ("AGI") in excess of $110,000 for taxpayers filing jointly,
$75,000 for single taxpayers, and $55,000 for married taxpayers filing
separately. Generally, the credit is limited to tax liability net of
credits (other than EIC). However, families with three or more children
may be entitled to a credit in excess of tax liability.
For verification and more information you can check this quote at:
http://www.irs.ustreas.gov/plain/hot/tax-law.html
Frank Blair
------------------------------
Date: Mon, 17 Nov 1997 22:01:56 -0500 (EST)
From: "Brian O'Rourke" <borourke@strategies-u.com>
Subject: Deductible IRA Question
I read in Money magazine that the recently passed tax bill allowed one to
deduct his IRA even if his wife has access to a tax-sheltered retirement
account. Does anyone know if this deduction will be phased in? Or will it
take effect all at once in 1998?
Brian O'Rourke
------------------------------
End of persfin-digest V4 #103
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