From: jeff.salisbury@xmission.com Date: 30 Oct 1999 12:14:42 -0600 helo=xmission.com) by mail.xmission.com with esmtp (Exim 2.12 #2) id 11hczV-0007Qo-00 for persfin@lists.xmission.com; Sat, 30 Oct 1999 12:12:37 -0600 Message-ID: <381B3500.7B74B029@xmission.com> X-Mailer: Mozilla 4.7 [en] (Win98; U) X-Accept-Language: en MIME-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit Fellow persfin'ers, It has been a long time since we've seen any activity on our list. I am planning to make a concerted effort to resurrect our group. Here is an article on a the attitude of a large segment of Americans toward savings. I hope none of you feel the same way! Best Regards, Jeff Salisbury ============================== Deseret News www.desnews.com Friday, October 29, 1999 Americans are betting on lottery over savings They don't expect to see $500,000 in lifetime Associated Press WASHINGTON -- One-quarter of Americans believe their best chance to build wealth for retirement is by playing the lottery, not by patiently saving and investing, a survey says. Those living paycheck to paycheck are even more likely to feel that way. Misconceptions about how small amounts of money can grow keep millions of people from taking the steps that could greatly improve their lot, say sponsors of the survey released Thursday -- the Consumer Federation of America and the financial services firm Primerica. "If Americans understood that their chances of winning a big lottery jackpot were 10 (million) to 20 million to one but that they could accumulate hundreds of thousands of dollars through regular saving, more families would put $50 away rather than spending it on gambling or unneeded consumption," said Primerica Chairman Joseph Plumeri. Invested for 40 years at a 9 percent annual yield, $50 a week would add up to $1,026,853. Stephen Brobeck, the consumer group's executive director, said banks and brokerage firms must take some of the blame for the fact that many Americans don't realize there are ways to invest profitably even small amounts of money, such as in savings bonds or mutual funds. "I don't think they've done an adequate job in publicizing those products to the low- and middle-income households," Brobeck said. "There are decent savings options out there for any household." The poll indicated 28 percent of Americans believe winning a lottery or sweepstakes is their "best chance to obtain a half a million dollars or more in your lifetime." Among households with annual incomes of $35,000 or less, those holding that belief jumped to 40 percent. Overall, fewer than half -- 47 percent -- of all those surveyed said saving and investing some of their income was the most reliable route to wealth. People were also asked how much $25 invested weekly for 40 years at a 7 percent annual yield would amount to. Fewer than a third guessed over $150,000. The correct answer is $286,640. A series of similar questions found that younger and lower-income Americans, along with women, tend to most undervalue how savings can add up. But that $286,640 is still not the half-million dollars the survey asked about. "There are a number of households that will have a very difficult time under any scenario," Brobeck said. But he noted, "In every income class there are savers and there are spenders . . . there are still, even in the lower-income classes, a minority who save and accumulate wealth." The telephone poll of 1,010 Americans 18 and older conducted July 22-25 has an error margin of plus or minus 3 percentage points. - ------------------------------------------------------------------------------- From: Rich Carreiro Subject: Re: tuition reimbursement & taxes Date: 30 Oct 1999 15:15:50 -0400 >Hi. If an employer offers tuition reimbursement, should they, or are they >required to, take taxes out? It depends. First, the tuition reimbursement plan has to be set up properly for reimbursements to be tax-free (this is analogous to regular expense reimbursement plans -- if those aren't set up properly, the reimbursements are taxable income). Second, I *think* that certain types of tuition aren't eligible for tax-free employer reimbursement, but I'm less sure of that. Rich Carreiro rlcarr@animato.arlington.ma.us "I've come to the conclusion that there should be a tort for wasting my time if you're being an idiot." -- paraphrase of Stephen T. Middlebrook - ------------------------------------------------------------------------------- From: Nancy Slator Subject: Retiring on the lottery Date: 31 Oct 1999 08:35:06 -0400 (EDT) On Sat, 30 Oct 1999, persfin-digest wrote: > > WASHINGTON -- One-quarter of Americans believe their best chance to > build > wealth for retirement is by playing the lottery, not by patiently > saving and investing, a > survey says. This isn't what the people were asked. (See below.) > Stephen Brobeck, the consumer group's executive director, said > banks and brokerage > firms must take some of the blame for the fact that many Americans > don't realize there are > ways to invest profitably even small amounts of money, such as in > savings bonds or mutual > funds. Are there really ways for a 20 year old with $50 to get 9 percent interest? > The poll indicated 28 percent of Americans believe winning a > lottery or sweepstakes > is their "best chance to obtain a half a million dollars or more in > your lifetime." My local paper didn't print this much of the article. This is completely different than the headline. If I don't think I'm ever going to accumulate half a million dollars, then it makes no difference to say the best way to do it is the lottery. The beginning of the story makes it sound like there are a lot of people out there who are really *counting* on the lottery for retirement. I have a state retirement plan. I'm not going to have half a million dollars when I retire, but I will have a pension. It's probably statistically true that my best bet for having a half a million dollars in the bank is the lottery -- and I don't even buy tickets. -- Nancy Slator, neslator@amherst.edu - ------------------------------------------------------------------------------- From: BOB FORD Subject: WINNING THE LOTTERY Date: 31 Oct 1999 12:36:31 -0500 Jeff The article about people thinking that the only way = to have any money is to win the lottery shows = the sad state of education in the US. As the article points out, the odds of winning the lottery are very very small. I am searching for ideas on how to give people a financial education. I encourage people = that may have any ideas to either post them or e-mail them to me. For many years I have taught retirement planning. The sad fact is that I get most people when they are to old to do proper retirement planning. People plan their vacations better than they plan their retirement. How can I = reach people when they are young = enough to create a financially secure retirement plan? I would welcome any ideas on this subject. I hope Jeff can revive this list. There are many talented people on the list that can give sound financial advice. There are certainly enough financial problems that need to be solved. = BOB FORD BOB_FORD@COMPUSERVE.COM Editor of the 57-56-55 CHEVY LIST and TURBOGLIDE REGISTRY -