Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #138
Date: Wed, 25 Mar 1998 21:59:20 -0500 (EST)
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persfin-digest Wednesday, March 25 1998 Volume 04 : Number 138
IN THIS ISSUE:
ADVERTISEMENT: MCI CONNECT
RE: Purchasing Foreclosure Property
RE: contractor /regular employee?
Re: Wash Sale Question
Telephone long distance
MCI ld net offer catches
Re: best investment in middle age?
How to switch to a career in finance?
mutual fund sale quesiton
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Date: Wed, 25 Mar 1998 21:51:32 -0500 (EST)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: MCI CONNECT
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------------------------------
Date: Wed, 25 Mar 1998 21:52:53 -0500 (EST)
From: Rick.Schafer@bdk.com
Subject: RE: Purchasing Foreclosure Property
> I'm looking for ways to purchase single-family homes for rental purposes and
> the following idea came to mind. Can you help me find flaws in this approach?
>
> Find property being foreclosed. Look for property in a good neighborhood where
> the amount due on the mortgage is in a "reasonable" range. If the house looks
> good from the outside, send the owner a letter with the following terms:
I like the idea of no or little money down to buy properties -- I have done it &
it can be done under special circumstances. I do have a comment about this plan
tho'. . There is much more to the property owners expenses than the mortgage.
These include taxes, water, sewage, repairs, maintenance, vacancies as a
percentage of potential rent (we use 20% in our area), business expenses such as
car, tools, cell phone, computer, software, insurance, plus your positive cash
flow.
To determine how much mortgage a property can support, you need to calculate the
Net Operating Income. This is basically your gross potential income, less the
things I have mentioned, but NOT less the mortgage (P&I). You have to think of
& subtract everything. The number you are left with is the cash available to
pay a mortgage. In other words, this will be your mortgage payment every month.
Now, take a realistic interest rate and the time period you plan on (15, 30
yrs) and look up in a mortgage table how much you are able to borrow. Finally,
add to that number any down payment you plan to make. Now you have the price
you can pay for the house.
I personally have never been able to understand how single families can be
rented for a profit unless they are almost free or if there is a huge down
payment. I look at 3-4 families at $20-30k/unit that can be bought for little
or no money down. At this price, in my area, the mortgage is about 1/2 the
potential income. This way, w/vacancies, I can count on a reasonable return.
In very rough numbers, a $100k house would have to rent for $2000/month to make
a profit. Not likely... but if you figure it out, let me know!
------------------------------
Date: Wed, 25 Mar 1998 21:53:36 -0500 (EST)
From: Rick.Schafer@bdk.com
Subject: RE: contractor /regular employee?
>From: "Mike O'Connor" <mikeo@dibaind.com>
>Subject: contractor vs. regular employee
>Hello persfiners,
>I will be graduating from college in May with a degree in computer
>science. I am 27 years old and I have accumulated about $25,000 in
>student loans, with an interest rate of about 7.8%. My goals are ot get
>the loans paid off . I have gotten job offers in the $48,000 range that
>I am considering, but I also have come across contracting opportunities
>that pay in the $35-$40 an hour range. What I am wondering is which
>would be the better choice financially? I am not too concerned about
>benefits becasue I do not have a family nor do I intend to anytime soon.
>Also, if I do work as a contractor, will I be able to deduct expenses
>(such as a car payment) from my taxes?
>Thanks in advance,
>Mike O'Connor
Mike,
As software engineering manager here in the east, I have hired many software
job-shoppers. Presently in our area they are in big demand -- depending, of
course, on skill set. Java, VB, NT, SQL, client-server, C++ skills, all at the
'hit the ground running' level, are in demand here in CT. To get the skills I
needed here, I brought a guy down from New Hampshire. Other way of looking at
that is, to get the temp job he wanted, he moved from NH to CT...
There is a saying among shoppers that 'you're not a job shopper until you have 6
months in the bank.' That's because, over time, it runs hot & cold. However,
it is probably the very best way to get experience that will make you more
valuable if/when you decide to go permanent.
Call the temporary technical manpower agencies in your area. Have them give you
a 6 month projection for available work. If you can work for a year you'll be
way ahead. If you have no mortgage & are open to moving a few times over the
next few years, I'd say go for it!
Good luck!
Rick Schafer
------------------------------
Date: Wed, 25 Mar 1998 21:54:29 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Wash Sale Question
>I am unclear as to how the wash sale rule works on the U.S. 1040.
>Scenario:
>Jul 1 - Stock bought for $16
>Aug 1 - Stock sold for $14
>Aug 7 - Stock bought back for $13
>Dec 3 - Stock sold for $21
This is, thankfully :-), a relatively easy wash sale scenario. It
can get pretty confusing. Your scenario will go like this:
You have a $2 loss on the 8/1 sale. However, buying the stock back on 8/7
disallows the $2 loss, which is added to the basis of the newly bought
shares. So even though you paid $13 on 8/7, the tax basis is
$13+$2=$15. When you sell it on 12/3, you will therefore realize a
gain of $21-$15=$6.
In this case the wash sale rule didn't really have an effect because
the whole series of transactions was in the same tax year. But if you
sold on Jan 3 instead of Dec 3, there would be a difference -- instead
of a $2 loss this year and an $8 gain next year, you would have no
gain or loss this year and a $6 gain next year.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Wed, 25 Mar 1998 21:54:55 -0500 (EST)
From: "Stewart Hull" <slh33@hotmail.com>
Subject: Telephone long distance
Thanks, Peter Palma, for identifying the MCI 9 cent /minute offer in
V4#132.
http://www.mci.com/aboutus/products/netsavings/overview.html
It's just what I was searching for.
Readers not interested in the MCI offer may find something else they
like at
http://www.wp.com/Fone_Saver/ld.html
Thanks again,
Stewart L. Hull
------------------------------
Date: Wed, 25 Mar 1998 21:55:46 -0500 (EST)
From: rpalma@msai.mea.com (Peter Palma)
Subject: MCI ld net offer catches
A few issue ago, I described an MCI long distance
offer of 9 cents/minute long distance available at
http://www.mci.com/aboutus/products/netsavings/overview.html
I ordered this myself and thought I'd share the catches with you.
They sent me two phone cards when I specifically told them that I didn't
want a phone card.
The out of state long distance is 9 cents/minute as they say.
They also switch you to their instate long distance
to their service which is 25 cents per minute 7 AM
to 6:59 PM M-F.
I haven't checked the rate from AT&T and the local phone company
but this seems outrageously high to me and wasn't stated anywhere
on their web site.
They did send a $10 long distance coupon to cover the cost of
switching to their service.
I haven't decided yet if I'll keep the new service.
------------------------------
Date: Wed, 25 Mar 1998 21:56:11 -0500 (EST)
From: jeff@scrooge.csd.sdl.usu.edu (Jeff Salisbury)
Subject: Re: best investment in middle age?
> Subject: best investment in middle age?
> I have about $20K sitting in a low interest savings account. I am a 53
> year old male who plans to work at the present occupation of college
> professor until 65. My wife is the business manager for the local YMCA
> and will probably hold onto her position until she retires in about 20
> years. We are comfortable with a pretty decent cash flow. Given our
> current situation, what would be the best way to invest the $20K? The
> stock market has been outrageously successful lately, but we read so much
> about how we are due for a downturn on Wall Street. We have only
> invested in the past in mutual funds, bank savings accounts, IRAs and
> retirement accounts. We would appreciate any advice on maximizing our
> investments without risking too much. Thanks.
>
> Ryo Imamura
> imamura@elwha.evergreen.edu
>-- End of excerpt from Ryo Imamura
Ryo,
I recently read a book called "Bulletproof Your Financial Future". This book
has forever changed how I view investing and asset allocation. It is the most
intelligent look at asset allocation that I've read. This book covers the
subject of investment asset allocation as it should be. An in-depth analysis of
historical data is utilized to develop a plan to protect your investments,
while seeking long term growth. This book will open your eyes to the rational
of asset allocation, and provide guidelines for establishing your own lifetime
plan.
http://www.xmission.com/~lefavi/
I am in no way affiliated with the author of this book. I was just mightily
impressed.
Best Regards,
Jeff Salisbury
------------------------------
Date: Wed, 25 Mar 1998 21:57:55 -0500 (EST)
From: "R. Prasad" <u13579@hotmail.com>
Subject: How to switch to a career in finance?
Hi All,
I have been on the list for a while but this is my first message.
I have a question related to careers in finance.
I have a PhD in (chemical) engineering & do programming/simulations/
modeling in my full-time job. I am curious about how I can switch to
a career in financial analysis - market, stocks, derivatives, etc.
(without doing an MBA?).
I am 30 with a passion for finance / investing, etc. and live in
the Chicago area. Salary is not an issue initially - I'd just
like to break into the field.
What is CFS, CPA... ? Is there any reference on what various
certifications are, how long it takes and how I can make the
transition?
Any pointers?
thanks
R. Prasad
------------------------------
Date: Wed, 25 Mar 1998 21:58:20 -0500 (EST)
From: "Brian Lee" <bklee87@hotmail.com>
Subject: mutual fund sale quesiton
I recently sold a mutual fund and I was wondering how I report the
taxes. Over previous years, I had paid taxes on the dividends and was
wondering what I do now. I haven't sold a mutual fund before, and it did
have some gains.
------------------------------
End of persfin-digest V4 #138
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