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Subject: persfin-digest V4 #127
Date: Sat, 21 Feb 1998 10:50:52 -0500 (EST)
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persfin-digest Saturday, February 21 1998 Volume 04 : Number 127
IN THIS ISSUE:
ADVERTISEMENT:
14c/Minute Calling Card?
Re:S+P Futures
Re: Social Security
Index data etc..
RE: Stock Split Terminology?
Custodian/broker for UTMA account?
Re: Life Insurance Questions
Do Judgements count when buying a house?
Re: Paying Taxes By Credit Card / Life Insurance
Re: Tax Question
Re: Social Security Tax Limit Increasing MUCH Faster Than Inflation
Re: Refund of Earnest Money?
Re: Tax question
Long Distance Access Fees DOUBLE CHARGED?
Phone calls while on the internet?
Re: historical quotes
Re: DJIA calculations
Renting 1040 Software for $10 From Intuit
Dealer Financing vs. Bank Financing For A Car?
Re: Social Security Tax Limit Increasing MUCH Faster Than Inflation
Re: Historical Quotes / Calculating DJIA?
Re: Geodesic Dome Mortgage
Re: Correcting W2 Error
Re: Paying Taxes by Credit Card?
Re: Cost Base of Stocks?
Re: How To Calculate Gain/Loss on Mutual Funds in Excel?
Web site to calculate returns?
Money Online is now offering help about the year 2000 Problem
Credit Report - Why So Many Inquiries?
Working in a foreign country?
RE: refund of earnest money
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Date: Sat, 21 Feb 1998 10:12:58 -0500 (EST)
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------------------------------
Date: Sat, 21 Feb 1998 10:13:58 -0500 (EST)
From: eric <73354.3477@compuserve.com>
Subject: 14c/Minute Calling Card?
Who has the 14c per minute calling card?
------------------------------
Date: Sat, 21 Feb 1998 10:14:27 -0500 (EST)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Re:S+P Futures
> Subject: S&P Futures Trading Start Time?
> Does anyone know what time of day the S+P Futures starts trading? I
> wake up around 7AM and have noticed that CNBC already has the S+P
> futures posted on the TV screen.
>
> sk
I thought these were traded pretty much around the clock and around the
world. THe new E-Mini trades electronically 23 1/2 hrs a day.
All markets use the S&P and trade in many exchanges.
DO NOT try to get up before the S&P!
- -Randy
------------------------------
Date: Sat, 21 Feb 1998 10:15:10 -0500 (EST)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: Social Security
>Recently, Rich Carreiro, helpful as ever, noted that for the 1998 tax
>year the 6.2 percent Social Security tax will apply to the first
>$68,200 earned, or $4228. Last year, only the first $65,400 was taxed,
>resulting in a levy of $4055.
>This represents an increase of 4.27 percent, year-to-year.
But there are a lot of people who don't reach the $65,400
threshold, so their tax burden doesn't go up. It is probably the TOTAL
amount of social security taxes collected that have gone up by the
amount needed to account for inflation.
> Every study I've read indicates that today's high wage workers are
>the *least* likely to get their money's worth from the Social Security
>program, so I think it is most inequitable to have their tax burden
>going up every year in real dollars.
Of course social security is unfair, what else would one
expect from the government? Its only real purpose is to make large
parts of the population dependent upon the government and thus easy
for politicians to manipulate. I could go into great detail, but this
isn't the place for a long political speech.
-David Martin
------------------------------
Date: Sat, 21 Feb 1998 10:16:09 -0500 (EST)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Index data etc..
>From: Rick Gleason <spyneyes@ix.netcom.com>
>Subject: Historical Quotes / Calculating DJIA?
I have two questions I'd like to send your way.
#1 - Where on the web can I find historical quotes for the S&P 500
Index. I'm looking specifically for it's close on April 19, 1997. I
know there are places to get historical quotes for stocks and mutual
funds, but do not know where to find the same for an index.
http://www.paclink.net/ilogic/freedata.htm
This address (URL) has LOTS of valuable info including daily S&P 500
hi/lo/close for about 10 years.
My favorite file from this site is the MASTER Stock Split List - it
gives split history for most stocks looking back over a long term (it is
about 70 pages long)
#2 - Can someone explain exactly the procedure in calculating the daily
Dow Jones Industrial Average? Is it the dollar value of the thirty
added up since a particular date or what?
The Dow is computed by adding the total value of the 30 stocks and
dividing by a factor that adjusts the distortions caused by stock splits
over the years. As of Oct. 24, 1996, the factor was 0.33539933.
http://www.washingtonpost.com/wp-srv/business/longterm/glossary/
a_m/dow_jones_industrial_average.htm
Hope this helps - Randy
------------------------------
Date: Sat, 21 Feb 1998 10:17:06 -0500 (EST)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: RE: Stock Split Terminology?
>From: dmak@tma-net.org
A company that declares a stock split usually declares a record and
payable date. For instance, with Microsoft's upcoming split, it
announced that shareholders as of a 2/6 record date are eligible for
the split, to be paid on 2/20. I don't understand what happens to
those who buy MSFT between 2/7 and 2/19. They still get the split,
don't they?
As one who sometimes trades splitting stocks I ignore all these
details. THe only date I care about is the actual date the split
happens, and even that's no big deal to most investors. Your price and
number of shares are going to be adjusted no matter when you buy/sell.
A word of warning, if you're buying just because of a split, you'll be
sorry. You still need to do your homework. I buy SOLID companys with
consistant growth, after the first phase of a price run-up after an
announcement. The stock price will often dip after the first advance
when traders take their quick profits. I like to be out soon after the
actual split at a 10-15% profit. If it doesn't go up I'm out anyway.
ONE source (there are probably better) of an explanation of splits is
at http://www.dpliv.com/roughnec/Stock%20Splits.htm
Hope this helps. Good luck - Randy
------------------------------
Date: Sat, 21 Feb 1998 10:17:33 -0500 (EST)
From: Shankar.Prasad@eng.sun.com (Shankar Prasad)
Subject: Custodian/broker for UTMA account?
Hi
I am looking for a brokerage / Mutual Fund firm which will allow
me to open a UTMA account for my child (in CA). I basically plan
to transfer some ESPP-acquired stock to my child in the UTMA (I
might make this transfer once a year or so). Once the stock is in
the UTMA, I would like to sell some or all of it and invest the
money in mutual funds (within the UTMA). Occasionally, I might
also need to make withdrawals once or twice a year (to meet some
of the child's expenses which are eligible for UTMA accounts).
Ideally, I would like to do the above from a single account which
should allow me to transfer in securities, sell them, and also
invest in mutual funds. Checkwriting for withdrawals would be a
plus. I am open to using online brokers (datek, etrade ...??)
and want to minimize costs. Annual/custodial fees, inactivity fees,
fees for checkwriting, commissions for selling should be minimal.
A good range of mutual funds available via a no-transaction-fee
program would be a plus.
I was initially consider Schwab for this - but they have changed
to charge humonguous fees unless you have a 25000 minimum. Any
other brokerages which might be suitable ?
- --
Regards
Shankar Prasad
------------------------------
Date: Sat, 21 Feb 1998 10:19:18 -0500 (EST)
From: "Cal Lester" <cal_lester@email.msn.com>
Subject: Re: Life Insurance Questions
>From: "Phillip Jennings" <pjennings@pharm.utah.edu>
>
>I will be changing jobs in the next few months and relocating across
>the country. Currently my wife (who also works full-time) and I both
>have group term-life policies through our employer in an amount that
>we consider adequate should one or both of us dies. We have saved
>towards retirement very aggressively over the past few years and now
>have over 6 figures in our 403-b and TIAA-CREF accounts.
>
>>>> Will you or your wife be changing "employer". The reason of course
is that if you do, you will in all probability LOSE your "GROUP" insurance
program/programs. If NOT, then that will remain a part of your insurance
program. Also , you failed to mention how much GROUP insurance you have.
>As we will need to obtain new life insurance policies once we
>relocate, I am trying to decide on the proper amount of insurance to
>purchase.
>>>> If this is true, you must first look at your "CURRENT INSURABILITY".
Is there any possibility that either of you might be "less insurable" today,
then you were. Also Group insurance underwriting is generaly looser than
individual insurance.
If per chance either of you IS less insurable, then you might
want to examine the possibility of "conversion" of your existing contracts.
My question is: since our 403-b money is ours and payable
>to our beneficiary on our deaths, should I consider this payment when
>calculating how much life insurance I need? For example, if I have
>a retirement account worth $100,000 and determine that I need
>$400,000 worth of life insurance, should I only purchase a policy
>worth $300,000?
>>>> The answer is BOTH Yesy & No. Yes you should consider as a part of
the "assets" that will be available to your heirs at your death. However,
since it is a "retirement account", in all probability it is "UNTAXED"
money, and the ENTIRE proceeds from that account would be Income Taxable to
your heirs. Therefore, you should discount it at the maximum tax
rate.........
I hope that this information has been of value.
Cal Lester CLU
Insurance course coordinator
Broward Community College
Cal_Lester@msn.com
------------------------------
Date: Sat, 21 Feb 1998 10:21:14 -0500 (EST)
From: Don R Shegog <drshegog@gte.net>
Subject: Do Judgements count when buying a house?
I am looking to purchase a home within the next year. I currently have a
a judgment outstanding against me due to a stupid mistake from college. Do
I need to have this judgment paid off before I can apply for a mortgage?
------------------------------
Date: Sat, 21 Feb 1998 10:21:54 -0500 (EST)
From: JONESW@ccsua.ctstateu.edu
Subject: Re: Paying Taxes By Credit Card / Life Insurance
Barry asked about paying income taxes by credit card. The last I heard, this
is legal, but the IRS refuses to pay the fees (perhaps 2% of the total) to
the card issuer, since the IRS would get less that way. Naturally, card
issuers only let people charge things so they can make money, so they don't
want to let people charge large amounts for free.
You can do effectively the same thing, by sending in a convenience check.
However, I think this is a very bad use of credit, since you will pay the 2%
surcharge (or more) and very high interest as well. It is better just to pay
the IRS's penalties for a few months; they are generally lower than credit
card interest.
It is contrary to the purpose of credit cards to allow charges of income tax
anyway. The purpose from the merchant's point of view is to get more
business by encouraging people to buy more merchandise than they would if
they had to pay cash. The IRS does not have to worry about encouraging
people to pay more taxes than they otherwise would. So I think it is a silly
law that even considers allowing charging one's income taxes.
*****
Phillip asked about whether life insurance should be offset by 403b savings.
The purpose of life insurance is (for most people, and apparently for you) to
provide an income to dependents who would otherwise suffer from the loss of
your income. If your wife will be quite well provided for by the 403b
savings, and you have no other dependents, there appears to be no need of
life insurance. You can reduce it as your 403b savings accumulate, as long
as the total value of 403b and life insurance can be expected to provide a
very nice income to your dependents.
I could never understand why people with hundreds of thousands in investments
needed that $10,000 life insurance policy advertised on TV to cover funeral
costs; they already have plenty to cover the funeral costs.
P.S. Price term life insurance from TIAA-CREF; you may find that it is
substantially cheaper than employer-provided term life insurance. I did.
Bill Jones
------------------------------
Date: Sat, 21 Feb 1998 10:22:21 -0500 (EST)
From: Tom Gaffney <tgaffney@kent.edu>
Subject: Re: Tax Question
I was wondering if anyone can provide me with an answer to this true scenerio:
A friend received a settlement (for breach of contract) of ~$200,000 in
1997. He received a 1099 recently which indicated his share after the
lawyers (2/3 rds). This settlement was for lost income from ~1994. At
that time, he was receiving income as a S-Corp. He is now just an
individual working for an employer. Is there any type of tax shelter
investment that he can use to help defray a huge tax bill? I know he can
go with an IRS (Roth or Deductable). However that is only good for $4,000.
(he is married). Any suggestions from the list? Thanks!!!!
Tom Gaffney
tgaffney@kent.edu
------------------------------
Date: Sat, 21 Feb 1998 10:23:09 -0500 (EST)
From: HLO2-1/H12 225-4218 <horton@pasta.enet.dec.com>
Subject: Re: Social Security Tax Limit Increasing MUCH Faster Than Inflation
>From: Paul Michael Brown <paulo@mirror.his.com>
>Subject: Social Security Tax Limit Increasing MUCH Faster Than Inflation
>IMHO, it appears as if the formula used to calculate the yearly
>increase in the limit for Social Security taxes has been manipulated
>by the greedy geezers and their allies in Congress to cause the
>equivalent of "bracket creep" for high wage workers. Every study I've
>read indicates that today's high wage workers are the *least* likely
>to get their money's worth from the Social Security program, so I
>think it is most inequitable to have their tax burden going up every
>year in real dollars.
Paul,
Social Security and Medicare are actually in a whole lot worse shape
than many people realize. Even with the recent so-called reforms
(including the tax increases you complain about) the system is
spinning rapidly toward insolvency.
Peter G. Peterson (former Secretary of Commerce, first president of
the Concord Coalition, etc.) has written an excellent little book on
the subject,
"Will America Grow Up Before It Grows Old"
Random House (1996)
ISBN 0-679-45256-7
which shows in graphic detail how out of whack the whole system is.
For instance, with no changes in old-age entitlements, by the year
2040 Social Security and Medicare will consume ALL federal revenues!
And of course the so-called Social Security Trust Fund is anything but.
All that's in the kitty is a bunch of federal IOUs, with the current
SS surplus going toward meeting today's federal voracious appetite
for congressional fact-finding junkets to Paris and Rome, stockpiles
of mohair, peanut subsidies, garrisons in Germany (protecting West
Germans from East Germans, I suppose), BATF thugs, and other essentials.
This "trust fund" has no stocks, no commercial bonds, no hard assets,
nothing that any proper fiduciary would include in a long-term trust,
just a stack of federal paper with nothing backing it up except the
power to impose ruinous taxes on the next generation.
I've been advising my younger colleagues that they will get exactly
nothing - zero, nada, nichts, nechevo - from these programs. There
just won't be any money. I've also advised them to start pressuring
their congress critters to make some meaningful changes, such as
privatizing the whole affair. Unfortunately many would rather spend
their time discussing the latest episode of "The Simpsons."
All you persfiners out there, get Peterson's book, read it, and after
it scares the daylights out of you, pass it on.
- -Jerry
------------------------------
Date: Sat, 21 Feb 1998 10:24:17 -0500 (EST)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Re: Refund of Earnest Money?
>My mother and father-in-law signed an agreement to buy a new home on
>12-12-97. They put down 5K earnest money. My father-in-law died on
12-14-97
>and when I spoke with the sales rep. on that day she assured me there
would
>be no problem and a full refund of the money would be forthcoming. After 5
>wks. of no refund I called her again and she basically said the same thing
>as in our previous conversation and promised to look into it. After 2 mos.
>of no refund I phoned her again and now her position is she'll refund the
>money only after they sell this home to a new buyer claiming my in-laws
had
>requested upgrades and she needed to recover those expenses before
>refunding the earnest money. This obviously is a change in her stated
>position and puts my mother-in-law at the mercy of their sales staff. I
>believe that both my mother and father-in-law signed the original
agreement
>to purchase.
> Tom Gilbertson
TOM
(THE USUAL WARNING)
I am not an attorney and the following is not legal advice. It is just my
opinion. It is based on my experience in California. The laws of other
states may be different.
You should see a real estate attorney as soon as possible.
If the home seller will not cooperate and return your deposit, this could
get nasty. Your attorney will probably tell the seller that he/she will
put a lis pendus (pending lawsuit) on the home and the seller can not get
title insurance if they sell the house. This will give the seller a
powerful incentive to return the deposit.
GOOD LUCK
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Sat, 21 Feb 1998 10:24:46 -0500 (EST)
From: Greta Taglieri <greta.taglieri@iis.varian.com>
Subject: Re: Tax question
>My CA state tax bill is 6000$, while my employer deductions are
>7300$. I have the following scenerios depending whether I choose
>to itemize my state taxes or not.
>
>Scenerio 1: Itemize 7300$ as state taxes, instead of standard deduction
>of 6900$. I will shave 400$ from Taxable income reported.
>But, I have to add state tax refund(7300-6000=$1300) to this year's
>income.
>
>Scenerio 2: Go for standard deduction and forego 400$ at 28% tax
>break, but do not add the refund of 1300$ in this year's income.
>
>I think Scenerio 2 is more profitable than 1 since we will be taxed
>at 31% marginal rate for 1300$ next year than saving 400$ to be taxed at
>28% in this year's tax bill.
>
>I request you to review my logic and respond.
Sudhakar,
Perhaps there are more things you could itemize, in addition to the $7300.
Things like Real Estate Tax (if you own a home) could dramatically increase
your itemized deductions, without being subject to the various minimum
percentage of adjusted income levels. I believe other things can go in
also, such as car registrations and excise tax (not that these would be
very significant).
Also, because of deductions, you can't really be sure that next year your
adjusted income will be at the 31% rate.
Greta Taglieri
Beverly, MA
------------------------------
Date: Sat, 21 Feb 1998 10:28:24 -0500 (EST)
From: Steve Brodeur <sbrodeur@draper.com>
Subject: Long Distance Access Fees DOUBLE CHARGED?
I'm angry.
I'm paying TWO extra fees for my long distance service (besides actual
calls). ARE YOU?
I have been paying a long distance access fee, currently $3.50/month, to my
local telephone service provider since the FCC allowed it shortly after the
breakup of Ma Bell. As I fuzzily recall, this fee reimburses the local
carrier for costs associated with connecting the local network to the long
distance providers.
[ I believe that historically, in the days of phone monopoly, long distance
service profits were used to subsidize the cost of local service. This had
the effect of getting more phones into more houses, especially houses that
might not have otherwise subscribed because of the monthly cost. This was
smart business because these additional phones could then be the
destination for other long distance, paying customers, as well as the
occasional outgoing long distance call.]
This month I received a new charge from MCI as well. They call it a
"national access fee", and describe it as follows [from my bill]:
"The FCC is now requiring MCI and all other long disctance companies to pay
a fee to the local phone companies based on the number of lines subscribed
to each carrier for originating and terminating your long distance calls.
As a result, MCI will pass along a subscriber fee to each usage customer."
I called my local provider, Bell Atlantic (formerly NYNEX), to ask if this
will replace the $3.50/month I'm paying them directly. Bell Atlantic says
that the $3.50 is still in effect and will continue; you'll have to ask
your long disctance provider about the additional fee.
Does anybody know if I'm now paying the same fee twice? Is MCI the only LD
provider that is passing this cost along to the consumers now that the
"FCC" is "requiring" them to pay the locals? When did this "FCC
requirement" go into effect?
Who do I get mad at- the legislature, the FCC, the local/LD phone
companies? all of them?
- -Steve Brodeur (x2496)
------------------------------
Date: Sat, 21 Feb 1998 10:29:05 -0500 (EST)
From: eric <73354.3477@compuserve.com>
Subject: Phone calls while on the internet?
I read (somewhere) about a "thing" that allows me to get incoming phone
calls while on the internet. Anyone know anything about this?
Eric
------------------------------
Date: Sat, 21 Feb 1998 10:29:43 -0500 (EST)
From: Jason Kaufman <JHK@copper-mt.com>
Subject: Re: historical quotes
#1 - Where on the web can I find historical quotes for the S&P 500
Index?
You can find this by typing SPX or ^SPX into any place that lets you
look up historical quotes.
Jason H. Kaufman
Copper Mountain Trust Corporation
Portland, Oregon 97204-3713
Corporate Web site: http://www.copper-mt.com
------------------------------
Date: Sat, 21 Feb 1998 10:30:14 -0500 (EST)
From: Jason Kaufman <JHK@copper-mt.com>
Subject: Re: DJIA calculations
#2 - Can someone explain exactly the procedure in calculating the daily
Dow Jones Industrial Average? Is it the dollar value of the thirty
added up since a particular date or what?
It is the price weighted average of the 30 actively traded stocks. It
is calculated by adding the trading prices and using a divisor that is
adjusted for stock dividends and splits and cash equiv. distributions
equal to 10% or more of the closing prices of an issue, as well as for
substitutions and mergers. It is quoted in points, not dollars.
Jason H. Kaufman
Copper Mountain Trust Corporation
Portland, Oregon 97204-3713
------------------------------
Date: Sat, 21 Feb 1998 10:31:25 -0500 (EST)
From: Jason Kaufman <JHK@copper-mt.com>
Subject: Renting 1040 Software for $10 From Intuit
This was e-mailed to me and I thought this would be of help to some:
Intuit's TurboTax site lets you "rent" the software to file your 1040
for $10, and they'll send your return to the IRS for another $10.
http://www.news.com/News/Item/0,4,19140,00.html
related page: http://www.investorguide.com/Taxes.htm
Jason H. Kaufman
Portland, Oregon 97204-3713
Corporate Web site: http://www.copper-mt.com
------------------------------
Date: Sat, 21 Feb 1998 10:32:27 -0500 (EST)
From: "Nikhil Shah"<nshah@ect.enron.com>
Subject: Dealer Financing vs. Bank Financing For A Car?
Hi!
I am planning to buy a car and I am approved for a loan from my bank @
9.00% for 48 mo's.
There are many car dealers who are trying to convince me that they can give
me 4.9 % - 6.9% for 48 months.
I am trying to find out what are the pitfalls of obtaining financing from a
dealer compared to a bank.
I would really appreciate it if some one could answer my question.
Thanks.
Nikhil Shah
------------------------------
Date: Sat, 21 Feb 1998 10:32:56 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Social Security Tax Limit Increasing MUCH Faster Than Inflation
>Recently, Rich Carreiro, helpful as ever, noted that for the 1998 tax
>year the 6.2 percent Social Security tax will apply to the first
>$68,200 earned, or $4228. Last year, only the first $65,400 was taxed,
>resulting in a levy of $4055.
>
>This represents an increase of 4.27 percent, year-to-year.
>
>I understand and accept the idea that Social Security taxes should be
>indexed so that the money coming into the system remains the same in
>real dollars. But I am not aware of *any* source that calculated the
>1997 inflation rate at whopping 4.27 percent. Even if you accept the
I had wondered about that as well. I found the answer buried on the
SSA web site (www.ssa.gov). Basically the FICA limit depends on both
inflation AND on a nationwide salary survey. There are two parallel
computations and whichever leads to the higher number is used.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 21 Feb 1998 10:34:32 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Historical Quotes / Calculating DJIA?
>#2 - Can someone explain exactly the procedure in calculating the daily
>Dow Jones Industrial Average? Is it the dollar value of the thirty
>added up since a particular date or what?
At whatever time you want to know the DJIA, add up the dollar prices
of the 30 stocks at that moment and divide by approx 0.24 (I forget the
exact number -- you can find it in _Investors Business Daily_).
The reason you divide by 0.24 and not by 30 is because the DJIA is a
price-weighted average (instead of cap-weighted), so when a stock in
the DJIA splits, the divisor needs to be pushed down to keep the average
continuous.
Example -- pretend we have the Perfin Average (to be computed like the
DJIA). It consists of stock A, stock B, and stock C. So when we
start, PA = (A+B+C)/3. Let's say A=$10, B=$20, C=$30. Then
PA=($10+$20+$30)/3 = 20. Now C splits 3-for-1. Its price is now $10.
If we naively compute PA we get ($10+$20+$10)/3=13.33. The PA has
massively dropped because of a non-event. To remedy this, we change
the "3" such that the before-split and after-split PA numbers are equal:
$10 + $20 + $30 $10 + $20 + $10
--------------- = ---------------
3 x
or
$60/3 = $40/x -> $60x=$120 -> x=2
So from now on we compute the PA as (A+B+C)/2. The next time there's
a split the "2" will get smaller. If a stock in the PA is replaced
with a stock having a lower price the divisor will shrink (if it's
replaced with a higher priced stock, the divisor will rise). This is
what has happened over the years to the DJIA. Splits and replacements
have reduced the divisor from 30 to 0.24.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 21 Feb 1998 10:34:59 -0500 (EST)
From: jmetz@slonet.org (JMetz)
Subject: Re: Geodesic Dome Mortgage
When I built my geodesic kit in 1988, there was a Geodesic Dome
Council of America which had a list of lenders. You might just persue
that avenue. Email me and I will look through my extensive library of
building books to see if I can find the address. My 3,000 sq. foot
dome cost me $90,000 to build and finish. I love it.
Entrepreneur, vivant, plumber, musician, chef, carpenter, electrician,
gardener, psychologist, historian,teacher, provider, mechanic,
nurse,chauffer,repairman, friend, enabler, masseur,
babysitter, chemist, dishwasher, ameliorator, husband, father
-just a few of the things I do.
jmetz@slonet.org
------------------------------
Date: Sat, 21 Feb 1998 10:36:46 -0500 (EST)
From: Kent Shaw <kshaw@pop.erols.com>
Subject: Re: Correcting W2 Error
>From: alufml@fanniemae.com (Francois-Michel Lang)
>
>Last year, my wife worked part time at a small business that recently
>went out of business, but not before sending her a W2 that appreciably
>understates how much federal tax she had had withheld from her paychecks.
>I know the W2 is wrong, because with each paycheck she received, we noted
>the deductions for fed, state, and FICA, and the fed total we summed up
>is << the number on the W2.
>
>I've tried contacting the ex-business, but their phone has been disconnected,
>their space is for rent, and the former owner has an unlisted phone number.
>Bottom line: I don't think I can get hold of the business or its owners.
>
>Does anyone have any suggestions about how we can not pay this tax twice?
>I don't believe there's a box for "federal tax withheld but not reported
>to you on a W2"!
>
>Any help would be appreciated.
Contact the IRS. They can provide you with the forms and procedures for
correcting an erroneous W2 form and can also verify the taxes paid by the
employer on your wife's behalf.
Kent Shaw, CPA
------------------------------
Date: Sat, 21 Feb 1998 10:37:11 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Paying Taxes by Credit Card?
>I heard that the new tax law allows one to pay Income Tax by charging it
>to a credit card. However, the Form 1040 instructions do not mention
>this. Is this allowed for 1997, 1998, or was it disallowed?
The law allowed the IRS to accept payment of taxes by credit card.
However, it specifically does NOT allow the IRS to pay processing fees
to the card companies (i.e. the standard 2-5% fee that merchants pay
to card companies). Since the credit card companies aren't going to
get paid as of now, they won't let the IRS be a "merchant" and
therefore there will be no credit card payment of taxes until this is
resolved.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 21 Feb 1998 10:38:45 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Cost Base of Stocks?
> What is the formula to calculate the cost base of stocks?
There's no formula. The basis is generally what you paid for the
block of stock, though there may be an adjustment (see below).
> (I may buy 3 shares one month, sell 10 the next, buy 2 the next...
>etc) I also reinvest the dividends.
You have to track it block-by-block. Also, unless you instructing
(and getting an acknowledgement from) the selling agent as to which
specific shares you are selling, you must calculate your gain/loss
as if you are selling the oldest shares first. Note also that the
reinvestment of dividends is itself a purchase and therefore each
reinvestment is a separate block.
> One trick is that I get a 10% discount on the purchase that
> is reported as income to me on W2.
For any purchases this happens for, your basis is the market price of
the stock (i.e. you add the reported income to what you actually paid,
and since the reported income equals the discount, your basis becomes
the actual price of the stock).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 21 Feb 1998 10:39:23 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: How To Calculate Gain/Loss on Mutual Funds in Excel?
>Individual ROR calculations should consider:
>When the account was started
>All cash flows including deposits, withdrawals and distributions
>The time each cash flow occurred
>The weighting of the funds in the account
>
>The Modified Dietz time-weighted calculation satisfies all of
^^^^^^^^^^^^^^^^^^^^^^^^^
>these considerations.
No, it doesn't. The individual *monthly* returns take into account
cash flows that happened in that month, but the monthly returns are
linked together without consideration as to how much money is in the
portfolio at any time. In fact, the whole purpose of a time-weighted
measurement of return is to wipe out most of the effect of cash flows
into and out of the portfolio. This is an eminently fair thing to do
in many circumstances (such as when measuring the performance of a
fund manager -- the measurement of the performance of the manager
shouldn't be based in part by whatever positive or negative cashflows
the fund shareholders happen to throw at him). However, if someone is
trying to see the return they earned on their money as it actually was
invested (and disinvested), I would argue that a dollar-weighted
measure (such as internal rate of return) would be better.
>This is a time-weighted calculation that accounts
>for all cash flow activity in an account (including deposits, withdrawals)
>and the time that each cash flow occurred. We calculate monthly returns
>using the modified-Dietz formula below. The monthly returns are then linked
>together to calculate ROR over a specific time period.
>
>Step number 1 (monthly return):
>(MVE - MVB - SCi) ¸ ( MVB + SCiWi) where,
>MVE = market value at end of the period
>MVB = market value at beginning of the period
>SCi = sum of individual cash flows
>SCiWi = sum of weighted cash flows
>
>Step number 2 (Linking):
>((1+r1) x (1+r2) x (1+r3).-1) where,
>r1, r2, r3. = rate for month 1, rate for month 2, rate for month 3..
Here's my example, which starts with yours.
>John Investor has $1,000 in Fund A at the beginning of month number 1. In
>the middle of the month he makes a PAC purchase of $200 and at the end of
>the month his fund holding (Fund A) is valued at $1,300.
>
>Modified-Dietz Calculation:
>
> MVE - MVB - SCi = $1,300 - $1,000 - $200 = $100
> MVB + SCiWi = $1,000 + ($200 x 15/30) = $1,000 + $100
r1 = $100/($1000 + $100) = 9.1%
To make further calculations easier to follow, I'm going to assume
that he bought 100 shares at $10 (the $1000) and then another 20 shares
at $10 (the $200) for a total of 120 shares, and they were worth $10.83
at the end of the month (120 times $10.83 equals the $1300 ending value).
I'm now going to assume that for the next 5 months Mr. Investor stands
pat. He makes no additional purchases. Meanwhile, the share price increases
6% per month (this is an awesomely great year :-) :-).
For month 2:
share price rises 6%, so from $10.8333 to $11.4833, so ending
value is 120sh * $11.4833 = $1378
MVE - MVB = $1377.6 - $1300 = $78
MVB + SCiWi = $1300 + $0 = $1300
r2 = $78/$1300 = 6%
For month 3:
share price rises 6%, so from $11.4833 to $12.1723, so ending
value is 120sh * $12.1723 = $1460.68
MVE - MVB = $1460.68 - $1378 = $82.68
MVB + SCiWi = $1378 + $0 = $1378
r3 = $82.68/$1378 = 6%
and so on until at the end of month 6 the share price is $14.4974
and John's account is worth 120 * $14.4974 = $1739.69. We have that
r1 = 9.1%, r2 = 6%, r3 = 6%, r4 = 6%, r5 = 6%, r6 = 6%
Linking these returns so far we have a 6 month return of:
1.091 * 1.06 * 1.06 * 1.06 * 1.06 * 1.06 - 1 = 0.4600 = 46%
John Investor, happy with this result, now puts in $100,000 at the
middle of month 7 with the share price at $15. This buys him
$100,000/$15 = 6666.667 shares for a total of 6786.667 shares. But
now the market finally breaks. The sharr price sinks to $14, so that
his account is now only worth 6786.667 * $14 = $95013.34. For month 7
we have
MVE - MVB - SCi = $95013.34 - $1739.69 - $100000 = -$6726.35
MVB + SCiWi = $1739.69 + (15/30)*$100000 = $51739.69
r7 = -$6726.35/$51739.69 = -13%
We now link these up and get a total 7 month return of:
1.091 * 1.06 * 1.06 * 1.06 * 1.06 * 1.06 * 0.87 - 1 = 0.2702 = 27.02%
So it appears that despite this downturn, John has had a return of
27.02% year-to-date. But hold on -- John has made total investments
of $1000 + $200 + $100000 = $101200 that are only worth $95013.34
after month 7. Clearly John has lost money -- his personal net worth
has unquestionably decreased. Yet the calculation shows he had a
positive return of 27%. What happened?
The problem is that the linking of the monthly returns makes no
allowance for the money in the portfolio from month to month. It is
true that John earned 9.1% in month 1 and 6% in months 2-6. However,
he earned that return on a small sum of money. When he finally had
the -13% month, he had it at a time where he had lots of money in the
portfolio. The loss on that large sum more than made up for the gains
on the smaller sums, and so John lost money. However, the linking
doesn't account for this and it thus shows a gain year-to-date. A
dollar-weighted measure such as IRR would have taken porfolio size
into account and would have showed a negative year-to-date return for
John.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sat, 21 Feb 1998 10:40:24 -0500 (EST)
From: "Jackson, Anthony D." <JacksAD1@central.ssd.jhuapl.edu>
Subject: Web site to calculate returns?
Hi All,
Anyone know is a web site that allows you to calculate hypothetical
returns from certain investments over given time periods? What I'm
looking for is say I invested "$Xdollars" in Fund/Stock "Ticker
Symbol" on date x/x/19xx, what is my return and fund/stock worth on
date x/x/19xx. I'm trying to do the "What if I had invested $X
dollars in Fund X on date "past", what would it have been worth
today".
This is similar to calculating your return at
http://cgi.pathfinder.com/cgi-bin/Money/portfolioworksheet.cgi
"TJ"
Jacksad1@JHUAPL.EDU
------------------------------
Date: Sat, 21 Feb 1998 10:41:46 -0500 (EST)
From: Mark Ollendorff <mollendorff@cybernautics.com>
Subject: Money Online is now offering help about the year 2000 Problem
With all of this talk about computers not being able to handle the year
changing to 2000, many people have begun to think seriously about their
financial institutions and how it will affect them. I work for Money
Online and there is a section on our site that is dedicated to the Year
2000 problem. It has different sections dealing with financial
institutions, social security and credit cards, to name a few. Within
those sections, there are articles offering advice and help to everyday
people about how to take precautionary measures. I have been a member of
this list for sometime, and I really think that many list members will be
interested in what some of the articles have to say.
Find it at:
http://www.pathfinder.com/r0/money/mls/in?/money/y2k/index.html
I hope you all find it as informative as I have.
------------------------------
Date: Sat, 21 Feb 1998 10:42:29 -0500 (EST)
From: K Miranda <kmiranda@earthlink.net>
Subject: Credit Report - Why So Many Inquiries?
I recently got a copy of my credit report from Experian.
There were 22 accounts listed. Fortunately, there weren't any deragatory
comments or mistakes to the accounts. To my
surprise, there were 41 inquiries since May of 1996. Some of
these were legitimate but there were six IN A ROW, WITHIN three
months from American Express. Which I have never applied for
or accepted a card from. There were seven IN A ROW, WITHIN three
months from Providian Bancorp. Again, never applied for or
accepted. Does this mean that for every 'pre-approved' card
offer I get, there is an inquiry made to my credit report. I'm
worried that this is going to count against me when I'm looking
for a mortgage.
Anybody know more about this? Should I be worried or do creditors
understand that inquiries are made without the consumers knowledge?
Thanks,
Kristina
kmiranda@earthlink.net
------------------------------
Date: Sat, 21 Feb 1998 10:43:30 -0500 (EST)
From: karenh@mcsi.net (Karen Henderson)
Subject: Working in a foreign country?
Hi all,
I am going to be moving to Queensland, Australia to work for at least the
next two years. Does anyone have any advice regarding working/living
abroad, handling taxes, opening bank accounts in Australia, buying
property etc. Any suggestions will be appreciated!
Karen
karenh@mcsi.net
------------------------------
Date: Sat, 21 Feb 1998 10:44:16 -0500 (EST)
From: Ron Rothenberg <Homebase@world.std.com>
Subject: RE: refund of earnest money
<<<
12-12-97. They put down 5K earnest money. My father-in-law died on 12-14-97
and when I spoke with the sales rep. on that day she assured me there would
be no problem and a full refund of the money would be forthcoming. After 5
>>>
In most states, the disposition of the earnest money is governed solely
by the contract agreed to by the parties. What does it say happens in the
event of the death of one party, or the change in the financibility of the
buyers?
Whose lawyer wrote the contract? I thought so.
What the salesperson TELLS you is generally irrelevant. To be enforcable,
contracts to purchase real estate must be in writing.
- -rsr-
Ron Rothenberg
Ron Rothenberg, CFP E X C L U S I V E B U Y E R ' S B R O K E R
Belmont, MA 02178 We help make you a smarter homebuyer
------------------------------
End of persfin-digest V4 #127
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