From: owner-persfin-digest@lists.xmission.com (persfin-digest) To: persfin-digest@lists.xmission.com Subject: persfin-digest V5 #62 Reply-To: persfin Sender: owner-persfin-digest@lists.xmission.com Errors-To: owner-persfin-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes persfin-digest Friday, October 30 1998 Volume 05 : Number 062 In this issue of the Personal Finance Digest: NO POINTS NO COST LOAN Question about bond funds Taxed Income Refund Airline miles going to waste Re:Expiring air miles Subject: Expiring air miles 401(k) to Roth question. Re: NPNC -more numbers/Reply Re: Value-Line technical rating Re: persfin-digest V5 #61 The messages posted to the Persfin-Digest are opinions and are not intended to substitute for qualified professional advice. Subscribers should seek the services of qualified professionals for such advice. The publisher, Internet provider, and Digest contributors cannot be held responsible for any loss incurred as a result of the application of any of the information provided here. To ask questions or provide answers, send your email to "persfin-digest@lists.xmission.com". Also, you can "reply" to the persfin-digest and your email tool should fill in the same address. However, if you "reply", be sure to edit the subject field in your email to reflect your topic. Copyright (c) 1998, Jeff Salisbury POSTED SUBSCRIPTION FEE: $20/year. Payment is optional. You will not be billed. The Digest is available to all subscribers, whether or not they pay. I do not discriminate either in favor of paying subscribers or against nonpaying subscribers. If you feel that the information presented here is worth the fee, and you feel comfortable paying it, send cash, check, or money order (U.S. funds), payable to "Jeff Salisbury", to: Jeff Salisbury 65 North 1300 East Logan, Utah 84321 Payment will be acknowledged by e-mail if you include an e-mail address. Subscribe: e-mail majordomo@xmission.com, text: subscribe persfin-digest Unsubscribe: e-mail majordomo@xmission.net, text: unsubscribe persfin-digest ---------------------------------------------------------------------- Date: Wed, 28 Oct 1998 15:53:20 -0500 From: BOB FORD Subject: NO POINTS NO COST LOAN I hope everyone on this list will print and keep Randy Barnes recent posting about real estate loans. He is indeed "telling it like it is". Money is like every other thing you rent. Pay the = smallest amount of rent for your money you can. Mortgage brokers only get paid when they make a loan. If one of them gives you a hard time find another one. As long as you do not put any of your own money in to refi a loan and you get a smaller interest rate, you make out. BOB FORD BOB_FORD@COMPUSERVE.COM - - ------------------------------ Date: Wed, 28 Oct 1998 16:18:37 -0500 From: Peter Palma Subject: Question about bond funds I understand from reading bond fund prospectus, that the share value of bond funds goes down when interest rates go up. I know that the main purpose of bond funds is the interest return, not fund appreciation, but the interest rates are so low now that it seems like the interest rates (long term) are much more likely to go up than down. How is this accounted for in the share price (or interest rate paid)? As a completely hypothetical example, say two years ago the interest rate was 8% and I bought $10,000 worth of a bond fund that was paying 5% interest, tax free. The interest rates have gone down 2% to 6% since then which has increased the per share value of the fund. If I sell now, I've made a windfall profit on my capital in addition to the interest that I've accumulated. Compare that to now, when interest rates. are extremely low. If I buy $10,000 worth of a bond fund now when interest rates are 6% and the bond fund is paying 5% interest, I'm fine as long as I collect interest and don't sell the shares. If however, I decide in 2 years to sell the bond fund, my guess is that the interest rate is more likely to be 8% than 4%. So, I'll more likely lose capital on the per share price than gain. Is this just a bad time to buy bond funds, or is this capital risk reflected in the interest paid by the bonds? In my example above, would the bond fund from two years ago when interest rates were higher be paying a lower rate of interest than the current 5%? An example with historical numbers for share price and interest return would probably help. - - ------------------------------ Date: Wed, 28 Oct 1998 15:52:12 -0600 From: Jerry Conley Subject: Taxed Income Refund I think I know the answer to this question, but can always hope. Six years ago my son opted out of the military after 18 years. They gave him a lump sum settlement of about 80k. He had to pay both state and Fed income taxes on the full amount. Since then he joined the National Guard and has satisfied requirements and became vested for a retirement at age 65. When he begins to draw that retirement they will reduce his monthly entitlement by enough to pay back the lump sum distribution he received upon leaving the Army early. Is there a way to claim a tax refund based upon the amount taken in one tax year versus the payback over an extended period of time? The greatest factor would be the difference in tax brackets. Thanks for any advice you may be able to give. Jerry - - ------------------------------ Date: Wed, 28 Oct 1998 17:00:43 -0500 From: PowellFamily Subject: Airline miles going to waste Since we do not usually build up enough miles to actually use, I thought they would be going to waste also. Then we got a postcard in the mail with various magazines in it that could be bought with frequent flyer miles. Wow! That was great! Check with yours and see if they have a similar program. I always figured I could donate them to the library if I didn't get around to reading them all. Sherri - - ------------------------------ Date: Thu, 29 Oct 1998 09:27:56 +0900 From: Michael Madigan Subject: Re:Expiring air miles If your expiring miles are from either United or Northwest and you have at least 20,000 miles to expire, they will be extended through 1999. An alternative is to change them into Hilton HHonors points and use them there or swap them back later or into another carrier's program with the HHonors exchange program. Check it out at http://www.hilton.com - - ------------------------------ Date: Thu, 29 Oct 1998 09:41:24 -0500 From: "Dill, Mary" Subject: Subject: Expiring air miles Hi - I am in the same situation with United. I called the airline. They said they would send information about their donation program. I have not yet received this information, so I don't know how useful it is. I also was able to redeem some of these miles for magazine subscriptions. Also - does anyone know if the donation is made by me or the airline -- that is who gets to write off the value of the donation and what is a reasonable value to use? - - ------------------------------ Date: Thu, 29 Oct 1998 08:19:45 -0700 From: "J. Morgan" Subject: 401(k) to Roth question. I've heard advisors recommend transferring 401(k) balances to Roth IRAs under certain circumstances. Wouldn't the funds have to be transferred to an ordinary IRA first and then converted to a Roth IRA, or can a 401(k) be converted directly to a Roth IRA without having to pass through an ordinary IRA on the way? Just curious. - -- J. Morgan - - ------------------------------ Date: Thu, 29 Oct 1998 12:39:55 -0500 From: hic@world.std.com (Howard I Cohen) Subject: Re: NPNC -more numbers/Reply > Well, I want NPNC, which is why I started asking these questions in t > first place. Because my current loan is 7.5%, I was having a really > time getting a bank to refi at no cost since they want to up the inte > rate. Now that the rates on 15 year loans are around 6.5% no points, > can get a NPNC for around 7%. That makes sense financially (~$40/mon > to do. > > Thanks again for the info, and look forward to your responses. Sounds good. But the key is to shop around. I don't really know how the mortgage brokerage business works. But I know that shopping around does two things. It gets you talking mortgage talk to a lot of different people and so you learn some of the trade jargen - like lock in, points, closing, credit history and all that "technical" stuff. But it also gives you a profile of prevailing rates. It would be interesting to make a simple chart for comparison purposes between quotes. List all the interesting stuff. Like rate for 1 point, 2 points, estimated closing costs, etc. Pretty quickly you'll see the pattern and will become an instant 'expert.' Like I am. I suspect that brokers have more choices of banks that a bank, which only has itself to offer a rate for. To me that's a compelling reason to go to a broker. Just be sure they are licensed in your state. If you do get serious, however, be sure to confirm that there is no penalty for early payment, and find out the bank's policy regarding recomputing the amortization schedule if you pay down the principal faster than scheduled. That insures no surprises if you opt for a long term loan but plan to pay it off faster. Look up . Iy's very informative. Good luck, and let us know what you end up with. - - ------------------------------ Date: Thu, 29 Oct 1998 14:02:04 EST From: Yoda84@aol.com Subject: Re: Value-Line technical rating Can anyone explain what the technical rating means on the Value Line sheets? TIA Nora Handler - - ------------------------------ Date: Fri, 30 Oct 1998 14:49:28 EST From: Mendheart@aol.com Subject: Re: persfin-digest V5 #61 In a message dated 98-10-28 16:11:03 EST, you write: << Date: Mon, 26 Oct 1998 12:41:50 -0800 (PST) From: "L. Mccullough" Subject: Expiring air miles It seems to me that last year someone had some information about donating air miles to some organization(s) for use if the miles were expiring. Does anyone have any information about this. I have some miles expiring the end of the year and will not be able to use them and would sure like to see someone get some good out of them. Thanks. Linda McCullough The bluest skies are in Seattle >> Linda- You might want to try the local "Make a Wish Foundation" in the Seattle area. They usually incorporate trips into their efforts to meet individual requests. Seems like a lot of em to Disneyland or DisneyWorld. Denny The bluest skies are in Boise - - ------------------------------ End of persfin-digest V5 #62 **************************** - To unsubscribe to persfin-digest, send an email to "majordomo@xmission.com" with "unsubscribe persfin-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.