Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #116
Date: Sat, 10 Jan 1998 18:25:17 -0500 (EST)
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persfin-digest Saturday, January 10 1998 Volume 04 : Number 116
IN THIS ISSUE:
ADVERTISEMENT: domainTNG
Results of "UPS Horror Story"
Best Way to Bring Money to Poland and Europe
Re: Cash Out Life Insurance to Pay Student Debt?
Re: Travelers Bank Travel Coupons - Me, too!
Quicken's option - Microsoft Internet Explorer (MSIE)u
Re: Computing TAX on converting to ROTH IRA
Can I Put Private Stock into a Roth IRA?
Keeping Old Copies of Persfin?
TravelersBank TravelerMiles Program
Re: Tax question for Non-resident dependents
Re: Quicken - Where is their accountability?
Roth IRA Web Sites
Re: quicken upgrade problem
Gold - I Think It's A Great Buy
re: buying land
Re: If Sellers Back out of Closing Question
Need Canada or Mexican Visa Card
Computer upgrades on personal computers as business expense?
Ending a car lease?
Re: Tax question for Non-resident dependents
Web calculators story
Re: Treasury direct
margin?
Converting Residential Property to Rental Property?
RE: The Value Of Investment Advisors
Q: income from a foreign source, how to report?
Re: car dealer problem - (LONG)
tax help vs do it yourself
How do I get saved ...... in Cuba
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Date: Sat, 10 Jan 1998 17:26:14 -0500 (EST)
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------------------------------
Date: Sat, 10 Jan 1998 17:30:09 -0500 (EST)
From: The Editor <Ira>
Subject: Results of "UPS Horror Story"
The "UPS Horror Story" ended happily. Sam was able to get his tickets
by visiting the UPS distribution center in Philadelphia. They were very
helpful and cooperative. At the least, this points to a communication
problem between the UPS telephone reps and the UPS distribution centers.
So thanks to everyone for their helpful suggestions. BTW, Sam had a
great vacation.
Ira
------------------------------
Date: Sat, 10 Jan 1998 17:45:41 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: Best Way to Bring Money to Poland and Europe
Based on my recent trip (we had a great time), I would recommend:
1) ATMs. There are plenty of ATMs in Poland, as well as the rest of
Europe. In Warsaw, there's one at the airport and several in Old Town.
You get the best rates and most efficient service. The language problem
can be a bit of a challenge, though. In Holland, I had no problem here -
the ATMs give you a choice of English, German, French, or Dutch and the
instructions were crystal clear.
2) VISA card. I paid most of my expenses (hotel, restaurants, gifts,
etc.) using a VISA card. No problem with authorization - in some cases, I
don't think they did any authorization, including at some hotels.
MasterCard is not as good because if the merchant wants to get
authorization, they have to phone a correspondent bank in the US.
3) Cash. Definitely carry some around, especially in small bills, for
local transit and taxis. If you carry small bills, you won't be forced to
change a large amount (say $50 when you need only $5) at the end of your
stay, and then be stuck with either worthless zlotys or get stung on the
reexchange back into whatever currency you need next.
I had a problem with the new $50 bills. The kantors (Polish money
change offices) thought they were counterfeit, even though they had the
proper stripe across the bill. Also, they won't accept bills with any
writing on them, though they don't hesitate to give you Polish bills with
writing on them. I had the same problem at the Holiday Inn in Prague.
4) Traveler's Checks. Definitely a last resort. First, you are charged
a whopping commission when you exchange them. Second, they're not
universally recognized, especially in more remote rural areas. Perhaps a
small amount of American Express checks (say $100) for extreme emergencies
is OK, but even there, a number of banks will give you a cash advance on
your VISA card. The American Express offices are good for emergencies,
however, so having a few AMEX checks could prove useful.
Hope this helps. Interested in your comments, as always.
Ira
------------------------------
Date: Sat, 10 Jan 1998 17:47:13 -0500 (EST)
From: "Cal Lester CLU" <cal_lester@email.msn.com>
Subject: Re: Cash Out Life Insurance to Pay Student Debt?
>In 1984, while I was a wee lad, my parents purchased a whole life insurance
>policy. The Death Benefit was $10,000. They paid premiums of about $14.00
>a month for a while. The most recent Policy Summary states that the total
>death benefit is now $14,656.55. The Net Cash value of the policy is
>$1,517.47. My parents have given me the policy to do what I see fit. As
>with most Americans, I have developed significant consumer debt. I was
>thinking about cashing in the policy and paying down a credit card.
>>>>Obviously, the first knee jerk reaction is "No WAY". A life insurance
policy in force is a very valuable tool. However, since you are 28 years
old, and you make no mention of a wife or family, one has to ponder the true
value of that plicy to you and/or you parents at this time.
IF there is a true need for any insurance at all, then in all
probability, the plicy in force should remain in force. IF there is not,
then the cash value, small as it is, could possibly be better utilzed to
reduce your outstanding debt (probably at a high interest rate). Once you
have done that ( and hopefully learned your lesson, and pay yourcredit cards
in FULL MONTHLY, so that you do not incurr any additional debt ) you might
want to look at "Variable Universal Life Insurance", to provide any
insurance needs that you might have at that time, PLUS a tax deferred grown
using mutual funds, all in one package.
Cal Lester C L U
Insurance Course Coordinator
Broward Community College
------------------------------
Date: Sat, 10 Jan 1998 17:48:24 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@deafcfp.com>
Subject: Re: Travelers Bank Travel Coupons - Me, too!
I wanted to know if anyone on this list has any experience with the
TravelersBank TravelerMiles Program? Its a $39/yr option with the
Quicken Platinum Visa Card. After every $6000 you charge, you get a
certificate for $100 off any airline's fare to any destination worldwide.
Up to four certificates can be combined ($400 off any airline ticket). In
addition, four certificates can be used for a free roundtrip coach ticket
on any U.S. airline within the continental U.S.
I can live with the other restrictions for free travel: 21 day advance
purchase and Saturday night stay. I am leery of the "lowest published
fare" phrase. I don't want to be in the situation where every itinerary
I might choose had only a minimal number of seats at the lowest fares and
they're all sold out. I am looking for feedback from others who may
have used the TravelersBank service (either through Quicken or another credit
card issuer). Is this a worthwhile service?
- --
I have been with this program via my own Travelers Bank VISA for more
than a year. Only two advices I can give are:
1. You are stucked with the Travelers Bank's own travel agent and you
have to keep pushing the agent until you are sure that you get good fare
or travel package at good price!
2. Never give coupons that are worth more than the actual cost because
there will be no credit for unused dollars. If it is $250, I only give
two coupons worth $200 and pay $50 instead. Do not use such a free
round-trip fare.
$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
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: Sat, 10 Jan 1998 17:49:42 -0500 (EST)
From: "Louis J. Schwarz, CFP, RFC" <sfc@deafcfp.com>
Subject: Quicken's option - Microsoft Internet Explorer (MSIE)u
"L. Mccullough" <loulou@u.washington.edu>
Subject: Quicken - Where is their accountability?
I just recieved a "special offer" upgrade to Quicken 98, and in the fine
print it says that you need "36 MB free disk space, plus 6 MB FOR
MICROSOFT EXPLORER"!!!
I called the 800 # and asked what they were going to do about that, in
view of the recent court ruling...the Answer was (after a 10 minute
wait),
"Oh, I don't know anything about that, that is a technical question and
you will have to call tech support"...which of course is not a toll-free
number. So of course I won't do this, as I have Netscape now and am
happy with it, so why do I HAVE to have Explorer installed on my computer.
- --
I faced the same question and chose the "no" button - it works fine for
me! I am still happy with Netscape that the former Quicken 6.0 version
provided.
Louis J. Schwarz, CFP, RFC
------------------------------
Date: Sat, 10 Jan 1998 17:50:31 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Computing TAX on converting to ROTH IRA
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>If you have a substantial amount in an IRA that you wish
>to convert to a ROTH IRA in 1998, do you compute the tax on
>the entire conversion in 1998 and then spread the tax due
>over 4 years? Or can you transfer 25% of your IRA to a
No. If you do a conversion in 1998 you spread the *conversion income*
over the four years. And it appears you have no choice in the matter.
The relevant code section reads:
"...in the case of a distribution before January 1, 1999, any amount
required to be included in gross income by reason of this paragraph *shall*
be so included ratably over the 4-taxable year period beginning with the
taxable year in which the payment or distribution is made."
>Also, can you transfer a portion of your IRA to a ROTH?
Yes. Just keep in mind that the taxability of the conversion depends
on the ratio of total non-deductible contributions to total value of
all IRAs and NOT on which IRA account the conversion is made from.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 10 Jan 1998 17:51:12 -0500 (EST)
From: Tim Mayclin <tmac1@ix.netcom.com>
Subject: Can I Put Private Stock into a Roth IRA?
Does anyone know if you can put private stock into a Roth IRA? I have
some stock options from a company that is not public yet. I want to put
the options into a Roth IRA so when the company does go public, I can
sell them and pay no tax.
------------------------------
Date: Sat, 10 Jan 1998 17:52:03 -0500 (EST)
From: Mike Morehouse <mikemore@rocketmail.com>
Subject: Keeping Old Copies of Persfin?
I really enjoy reading the persfin-digest. problem is there
is so much information, I don't have time to read it all.
Can you readers out there tell me the "best and most compact" way to
save past digest volumes. Is it best to select all text from by browser
and copy into a word processing document program like word pad or word 6.0?
Any ideas, I've thought about printing them out but my e-mail
program creates a lot of wasted space.
Any help would be appreciated. I can't keep them for too long
on my free e-mail site (rocketmail) because they eat up a lot
of space after 30 or so entries.
thanks
Mike Morehouse
mikemore@rocketmail.com
Opelika, AL
Ephesians 2:8-9
_________________________________________________________
DO YOU YAHOO!?
Get your free @yahoo.com address at http://mail.yahoo.com
------------------------------
Date: Sat, 10 Jan 1998 17:53:35 -0500 (EST)
From: "Jack R. Stokvis <Jack R. Stokvis" <smarts@galaxy.net>
Subject: TravelersBank TravelerMiles Program
>I am not concerned with the annual fee, but rather the fine print regarding
>reward redemption: "Free tickets are nonrefundable coach or economy class
>fares and apply only to the lowest published fare category on a particular
>flight available on U.S. carriers. ... You may be offered an alternate
>airline selection or times when redeeming free tickets, due to availability
>and varying airline flight schedules."
>
>I can live with the other restrictions for free travel: 21 day advance
>purchase and Saturday night stay. I am leery of the "lowest published
>fare" phrase. I don't want to be in the situation where every itinerary I
>might choose had only a minimal number of seats at the lowest fares and
>they're all sold out. I am looking for feedback from others who may have
>used the TravelersBank service (either through Quicken or another credit
>card issuer). Is this a worthwhile service?
I consider the TravelersBank TravelerMiles Program superior to ALL other
frequent traveler programs for several reasons:
1. You are not limited to any single airline.
2. You can used the $100 coupons in multiples to pay for airline tickets
(which with weekend stays, etc. can be purchased for less than $400) and
then, since they are revenue tickets, receive full airline mileage on
those tickets. On "Free" non revenue tickets from the airlines FT Bank
programs, you do not receive any mileage.
3. If you want a "free" ticket" it only costs $24,000 in charges vs
$25,000 with the airline bank accounts.
4. If you use the Quicken credit card which provides the TravelersBank
TravelerMiles Program as a $39 add-on, then you can download all the
credit charges into your Quicken program.
5. Since I haven't "cashed in" my coupons yet, I can't comment on the
other restrictions. However, to use regular airline FT miles, you must
usually plan trips six months in advance. With the $100, you can use them
as cash towards a ticket. It is much more flexible.
Hope this helps,
Jack Stokvis
------------------------------
Date: Sat, 10 Jan 1998 17:54:27 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: Tax question for Non-resident dependents
>
>Hi,
>
>My cousin has accepted a job in USA starting January 98. But his
>wife and kids will not be able to join him in 98 because of some
>personal reasons. They are solely dependent on him.
>
>Given this scenerio, I have the following questions:
>
>1. Can my cousin, claim tax deductions on his family even though
>they are not physically present in USA, but 100% dependent on him.
No he cannot. Either the family must live with him, or be residents of
Canada, or Mexico for some portio of the year. Of course there are other
criteria. I am assuming that you are not a citizen of either country.
>2. If yes, what is the procedure to follow ?
>3. If no, are there any LEGAL work-arounds/suggestions ?
As you can see the answer is no.
>Thanks,
>
>Sudhakar Vemuri
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
<http://www.acs.nmu.edu/instruct/business/sfoulks/default.html/>
------------------------------
Date: Sat, 10 Jan 1998 17:55:35 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: Quicken - Where is their accountability?
>
>I just recieved a "special offer" upgrade to Quicken 98, and in the fine
>print it says that you need "36 MB free disk space, plus 6 MB FOR
>MICROSOFT EXPLORER"!!!
This doesn't make any sense. Microsoft Explorer has always been part of
Windows NT and Windows 95. Do you mean Internet Explorer
>I called the 800 # and asked what they were going to do about that, in
>view of the recent court ruling...the Answer was (after a 10 minute wait),
>"Oh, I don't know anything about that, that is a technical question and
>you will have to call tech support"...which of course is not a toll-free
>number. So of course I won't do this, as I have Netscape now and am happy
>with it, so why do I HAVE to have Explorer installed on my computer.
>It is true, there are no choices, you take what they give you or do
>without. Seems like there should be someone who is accountable?????
Aren't you adult enough to take care of yourself. I suspect that you feel
that the government should regulate all commerce, as well as your personal
life also. I come from a different generation. If I don't like the way
the product comes, I DON'T BUY IT!! I don't need some idiotic bureaucrat
to make decisions like that for me. As a matter of fact I don't need an
idiotic bureaucrat to make ANY decisions for me.
In any event there is an option to use whatever Internet Browser you wish,
at last there is in Quicken 6 (Features, Online menus). Look in the
Incidentally Quicken 6 came with Netscape, but I use Internet Explorer at
home, so I changed to IE .
------------------------------
Date: Sat, 10 Jan 1998 17:56:20 -0500 (EST)
From: Don Apodaca <dapodaca@flash.net>
Subject: Roth IRA Web Sites
I've been reading a lot of questions and answers concerning the Roth IRA,
so I thought some readers here might find these sights useful:
http://www.rothira.com/
http://www.mfmag.com/jan1998/t_o_c.htm
------------------------------
Date: Sat, 10 Jan 1998 17:57:37 -0500 (EST)
From: taliadg@juno.com (talia D. Goeke)
Subject: Re: quicken upgrade problem
I have Quicken Deluxe v. 6 and about eight months ago when I was
downloading stock prices with it, it asked me if I wanted to upgrade.
After I went ahead and upgraded, the next time I opened up my Netscape
program I found that Intuit had gone into Netscape and erased all my
bookmarks and replaced it with financial bookmarks and replaced my "home"
setting to their home page. I was peeved to put it mildly.
Talia Goeke
------------------------------
Date: Sat, 10 Jan 1998 18:01:22 -0500 (EST)
From: "Mangiero, Susan" <MangieroS@sacredheart.edu>
Subject: Gold - I Think It's A Great Buy
Thanks for the great comments about gold. Yea, I think it's soon going
to be a good time to buy too, especially given the demographic/financial
crunch which all countries are going to face in very few years.
------------------------------
Date: Sat, 10 Jan 1998 18:03:03 -0500 (EST)
From: "Ken Meinken" <kmeinken@one.net>
Subject: re: buying land
> Now, a completely different topic: does anyone know of
> any good books about buying unimproved land?
>
> I'm thinking about buying a few acres and eventually
> putting a house on it, and am wondering what the common
> pitfalls are.
...
Jeff,
I think I may have seen a few books at the library, but they tend to
be on the general side. A lot of the things you need to consider are
more local issues.
We just bought 15 acres a few months ago, with plans to eventually
build on it.
One of the first things I've learned is "don't believe anything the
real estate agent tells you." They are either lying or are
criminally stupid. Just another case of "how do you know when a sales
person is lying...when they move their lips."
There can be a lot of costs involved in building a house on rural
land. A few of the items I know about so far: sewerage
treatment probably will run up $8000 to 15,000 here. Check with your
county dept of health for information (and hope that they are more
helpful than the moron I spoke to.) Gravel driveways can run
$11/lineal foot (and this is on _flat_ land, no heavy grading
required.) Water line tap in fee here is $3000, plus the cost of
the water line. Electric line installation might be free here.
Grading and water drainage could be another issue.
Overall, I estimated $30,000 for infrastructure type stuff and so far
we are okay.
On the other had, I've sure been having a great time working on the
land, doing the driveway, grading, etc. Don't know when we will
build the house, but I'm enjoying it a lot already! (No house, but we
put up a pole barn!)
Ken
kmeinken@one.net
------------------------------
Date: Sat, 10 Jan 1998 18:03:50 -0500 (EST)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: If Sellers Back out of Closing Question
>Jacqueline discusse a situation in which her lawyer found a problem
>with the title to the house she is buying. What should she do?
This is exactly the reason why you should run title searches
and hire a lawyer when buying a house; to find problems like this. You
should get this resolved _before_ buying the house, not after. Once
you've signed the papers, you have no power. Until then, you can
always walk away. There will always be another nice house.
> I will have spent (lost) money on my lawyer for the title search,
One way to look at is that you are one of the few people who
_didn't_ lose money on your lawyer. Usually, the lawyer just says that
everything is OK. You could have done it withot him. But your lawyer
actually helped you avoid a problem.
-David Martin
------------------------------
Date: Sat, 10 Jan 1998 18:04:34 -0500 (EST)
From: "Joe" <Broutek@worldnet.att.net>
Subject: Need Canada or Mexican Visa Card
Hello everyone - For personal reasons I need a Canadian or Mexican Visa
Card. I have excellent credit. Can anyone tell me how to go about doing
this? Thank you so much -
Greetings for a delightful holiday season and a happy New Year. - Joseph
------------------------------
Date: Sat, 10 Jan 1998 18:05:50 -0500 (EST)
From: Henrik Schmiediche <henrik@picard.tamu.edu>
Subject: Computer upgrades on personal computers as business expense?
Hello,
as a faculty member at Texas A&M my main income is salary. I do,
however, do several consulting jobs throughout the year which increase
my income by several K. The one tool I use more then anything else is
my personal computer. This computer was purchased using personal funds
and is used for personal / educational (teaching & research) /
consulting purposes. This year I upgraded the computer system
purchasing a new hard disk, better sound card, more powerful CPU and
recently after I noticed that a publishing/consulting project software
was running slugish I purchased extra RAM.
Can I these computer upgrades of my personal computer as business
expenses? Any ideas or pointers (suggestions how to handle this in the
future) would be welcome.
Thanks,
- Henrik
------------------------------
Date: Sat, 10 Jan 1998 18:08:12 -0500 (EST)
From: "Robert Loeser" <Robert_Loeser@medec.com>
Subject: Ending a car lease?
My car lease is going to end in a few months. The car has a few small
dings and chips, and the interior is a little dirty and uncleanable.
Will this cost me big? Or is this considered normal wear and tear?
Robert_Loeser@Medec.com
------------------------------
Date: Sat, 10 Jan 1998 18:12:12 -0500 (EST)
From: Shankar.Prasad@Eng.Sun.COM (Shankar Prasad)
Subject: Re: Tax question for Non-resident dependents
> My cousin has accepted a job in USA starting January 98. But his
> wife and kids will not be able to join him in 98 because of some
> personal reasons. They are solely dependent on him.
>
> Given this scenerio, I have the following questions:
These situations are covered in detail in Pub 519 "U.S. Tax Guide
for Aliens". You can get the IRS pubs by calling 1-800-TAX-FORM
or http://www.irs.ustreas.gov or ftp: ftp.fedworld.gov/pub/irs-pdf
I am giving you my understanding of the situation. It would be a
good idea to have things confirmed by a professional or at least
a personal reading of Pub 519. You might also want to post your
question to misc.taxes.moderated, where you will get some
professionals discussing things.
> 1. Can my cousin, claim tax deductions on his family even though
> they are not physically present in USA, but 100% dependent on him.
I believe not. I understand that the dependents must be physically
present in US (or a resident of Mexico/Canada, which probably does
not apply for your cousin).
> 2. If yes, what is the procedure to follow ?
N.A.
> 3. If no, are there any LEGAL work-arounds/suggestions ?
There is another concern for your cousin also. It looks like he
will be present in U.S. from Jan 98 (indefinitely ?). So he would
be a Resident Alien. If his wife will continue to remain out
of U.S. (in India ??) for the major part of calendar 1998, he will
have to file a "Married-Filing-Separate" return. The effective tax
he will pay to U.S. will be significantly higher than if he could
qualify to file "Married-Filing-Joint". His wife can opt to be
treated as a resident alien for 1998 and this would permit him to
file jointly. But this choice would expose the wife's non-US source
income (if any) to US Taxation. [ The gory details are in Pub 519 ].
Your cousin needs to decide whether the benefits of MFJ will outweigh
the cost of rendering the wife's foreign source income (if any)
liable to US taxes. Do not forget to count state taxes into the
calculation also, particularly if in California.
You did say that the family is "solely dependent on him". I interpret
this to mean that the wife does not have significant non-US source
income. If that is correct, then having the wife opt to be
treated as a resident alien would be beneficial.
If possible, his family's arrival into the U.S. before 31-Dec-1998
MIGHT allow him to file MFJ (resident aliens taxable on worldwide
income) AND claim personal exemptions. If he has some flexibility
about the time they wish to join him, he can keep this in mind.
Let me emphasize once again to read Pub 519 carefully, and maybe
get some professional advice.
- --
Regards
Shankar Prasad
Shankar.Prasad@eng.sun.com
------------------------------
Date: Sat, 10 Jan 1998 18:12:52 -0500 (EST)
From: Danialle Weaver <danialle@mindspring.com>
Subject: Web calculators story
Hi, everyone!
I just wanted to let you know that the story was posted on Friday evening to
the Wsj site.
The exact URL of the story is:
http://interactive.wsj.com/edition/current/articles/CyberPersonalFinance.htm
(That is only the URL for today, Monday, Dec. 22. Tomorrow, it will change.)
If you don't have a subscription to the WSJ site, you can sign up for a free
trial. If you don't get there today, try using the search function and
searching under my name. (After two weeks, you must use the advanced search
function.)
If you don't have Web access, or it's too much of a pain, and you'd like an
e-copy of your own, please respond via email to me privately and I'll
provide details on how you can get one.
Thank you again, everyone!
Happy Holidays.
Danialle Weaver
------------------------------
Date: Sat, 10 Jan 1998 18:12:54 -0500 (EST)
From: David Meyers <dmeyers@panix.com>
Subject: Re: Treasury direct
>From: "L. Chen" <am302@FreeNet.Buffalo.EDU>
>> One item of interest is the direct deposit/direct withdrawal feature on the
>> [...] I know I can do this from/to a bank account, but, I'd
>> rather not store my $ in a bank. Fidelity is no help here. I called the help
>Treasury Direct has an email contact (for answering questions) on their web
>page. They told me last summer that they can't do that -- only bank accounts,
>no mutual funds.
Note that some brokerage accounts with checkwriting
features may clear those checks through a bank - and
thus be usable for Electronic Funds Transfer access.
I haven't tried, but I suspect you can find out by
giving it a try. All the numbers you should need are
on the bottom of one of the checks that come with
your account.
- --D
------------------------------
Date: Sat, 10 Jan 1998 18:13:05 -0500 (EST)
From: "Benjamin Okun" <bokun@hotmail.com>
Subject: margin?
Hi...could somebody please help me improve my understanding about
investing on margin?
When you borrow money with your portfolio as equity, does the lender
view the loan as a percentage of your entire portfolio's value, or
rather does he view each security bought on margin a separate loan?
More specifically, suppose I have a $100,000 portfolio, and that I want
to take on maximum margin of 50%, and I want to take on that same
percentage of margin on each individual holding. Now imagine that some
holdings remain stable, while some holdings drop to the point that, on
an individual basis, I have less than 35% equity in one or some of these
securities. But, given my overall portfolio equity, my TOTAL equity as
a percentage of my total equity plus TOTAL debt is still above the
minimum. Will I get a margin call for those individual securities that
have decreased in value?
Thanks for your help....
Ben
------------------------------
Date: Sat, 10 Jan 1998 18:14:03 -0500 (EST)
From: Adam Londre <londre@cig.mot.com>
Subject: Converting Residential Property to Rental Property?
With the new tax law allowing the exclusion of taxable gains
on the sale of a home, does it also apply when converting residential
property to rental property? Previously, I believe when you
converted from Residential to rental you realized a captial gain
from the price you paid for the property and the current appraised
value at the time you converted it to a Rental property.
Does anyone know if this still holds true?
thanks much,
Adam
------------------------------
Date: Sat, 10 Jan 1998 18:19:33 -0500 (EST)
From: "???" <unsure.who.this.is>
Subject: RE: The Value Of Investment Advisors
Unlike THE LAW, investment can be approached on an individual basis with
a wide variety of scope, risk, and sophistication (and success). While
most trusts, partnerships, and sophisticated tax strategies might be
beyond the ability (and need, and desire) of the casual investor, mutual
funds, stock purchases, treasury direct, CDs, and other investment
strategies and vehicles are well within reach of the non-professional. It
is true that investing requires a certain amount of knowledge (as does
getting a drivers license, maintaining a checking account, or programming
a VCR). But the average investor can make some very simple, sound,
profitable decisions with very little research and training.
Professional advice has its place in investments and financial planning.
But just as when seeing a doctor, (or a lawyer), a little consumer
information is in order when shopping for advice or services. The consumer
should understand the costs associated with getting the advice or
service.
And the consumer should understand enough about the advice to make an
educated decision on a course of action. A service provider (doctor,
lawyer, financial advisor) who keeps the client in the dark does the
client a disservice (IMHO).
The top level decisions regarding my investments and financial planning
are made by the person who cares the most about the results- me! I make
informed decisions, based upon my own knowledge, and a variety of
resources, including the advice of a financial planner.
I resent Mr. Cahn's assertion that I am a fool for managing my own
investments. I also think he does the community a great disservice by
trying to perpetuate the notion that investing is beyond the ability of the
average person.
For starters, I was pointing out that IK made an error when he said that
Merill Lynch charges two commissions on a mutual fund transaction. Since
he is the moderator he should be more careful in his assertions.
I have been reading this list for a long time, since near it's
inception. I have been appalled by some of the messages printed here.
Such as when a 25 year old advises a reader who makes a query about his
mother's investments, that he should put her into a mutual fund which he
has invested in, which is a super performer. That questions which
appeared about two years ago created some outrageous responses from the
readers. I can only hope the original questioner did not take any of
the suggestions seriously.
I agree with you on the need for education, but I disagree strongly on
the ability of the average investor to manage his finances. I've been a
financial advisor since 1969, and I frequently see major disappointment
by individuals in their ability to meet goals. Just last week I had to
tell a client that he has about 8 years worth of funds available for his
retirement.
Dalbar Associates, a market research firm has been looking at the
experience of the individual investor for about a dozen years. Their
studies have consistently shown that the average investors experience is
about 20% of the market average.
Finally, over the years I've seen some periodicals quoted here often,
including the "Motley Fool". FYI there is a current SEC inquiry on
whether some individuals have used the MF chat lines to push stocks to
unsuspecting and naive investors. Finally with all due respect to the
brothers Gardner, they and their service have not yet gone through a
bear market, I'm withholding my opinion until they do so.
------------------------------
Date: Sat, 10 Jan 1998 18:20:18 -0500 (EST)
From: dulnev@jhu.edu (Jason Dulnev)
Subject: Q: income from a foreign source, how to report?
My Dad receives all his income from a foreign company that doesn't
have a US presence. I'm currently preparing his return and I'm not
quite sure how to handle the income reporting. The problem arises from
the fact that he doesn't receive a W-2 form from his employer. I
report the income as a W-2 income from a foreign source but am I
supposed to fill out something like W-2 and enclose it with the
return?
Thank you in advance for any help.
Jason Dulnev
dulnev@jhu.edu
------------------------------
Date: Sat, 10 Jan 1998 18:21:49 -0500 (EST)
From: kmealy@juno.com (Keith Mealy)
Subject: Re: car dealer problem - (LONG)
Summary for those who might have forgetten over Ira's
vacation:
A friend bought a car, and now has been called by the car
dealership who determined that they double applied a rebate,
and now wants the buyer to come back in and pay the difference.
The buyer claims, "a contract is a contract" and is refusing to go.
Discussion:
Let's change the scenario a bit and suppose that a similar
mistake was made in favor of the dealer, the rebate was not
applied properly, or the monthly payment was miscalculated
from the purchase price and interest rate. Would the buyer
still be resigned to the fact that, "a deal is a deal"? Of course not.
Now you could argue that the friend would not have bought the
car at the properly computed price. So I think the dealership
should be willing to work out some sort of deal, for example,
keeping the same monthly payment but extending the term.
kmealy@bigfoot.com
Cincinnati, OH
------------------------------
Date: Sat, 10 Jan 1998 18:23:07 -0500 (EST)
From: "Laine&Rachel" <ljs_rts@email.msn.com>
Subject: tax help vs do it yourself
I am a long time reader Personal Finance Digest. I enjoy the frank open
discussions that can get off topic. No one flames (as far as I know) people
when they post cellular phone questions or something like that.
I am curious about the benefits of using an accountant to prepare my taxes.
Up until last year my taxes were very simple. I made an error on my 1996
taxes and overpaid my taxes. The IRS did not catch the mistake. In fact,
they "lost" my return after they cashed my check. It only took 2 months to
get my refund though. I am lucky, I know. 1997 will be more complicated
because I bought a home and can itemize deductions for the first time. I
know I should avoid H&R Blockhead. But does it pay to use an accountant?
I've heard estimates of up to $400 for tax preparation. This sounds steep,
but it might be worth it if I save more that $400 in taxes and avoid any
penalties. Any thoughts would be appreciated.
Laine
------------------------------
Date: Sat, 10 Jan 1998 18:24:09 -0500 (EST)
From: "Joe" <Broutek@worldnet.att.net>
Subject: How do I get saved ...... in Cuba
Hello - I am Catholic, and I am going to see the Pope in Cuba. I was told
that you can't use a VISA Card that is credited to a USA bank there, or for
that matter any type of Travelers check, etc.., that is associated with a
USA financial institution.
I have a lot of experience traveling independently, so I know how to keep
money safely so as to avoid loosing it - including money belts, splitting
it up to different places, etc...
Since I can only use American Dollars there, it frightens me. What happens
if for any reason, I lose my money, or it is stolen, or for what ever reason
it's gone - what will I do? I need to find some way to get money to me in
Cuba in case of and emergency. I don't believe that the Pope will save me in
that regard - do you?
So ... I thought I would post this message, so that all you very intelligent
people would put your heads together and solve my problem. Any help will be
appreciated.
Thank you so much. Best Holiday Wishes - Joseph
------------------------------
End of persfin-digest V4 #116
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