From: owner-persfin-digest@lists.xmission.com (persfin-digest) To: persfin-digest@lists.xmission.com Subject: persfin-digest V5 #79 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 Thursday, January 14 1999 Volume 05 : Number 079 In this issue of the Personal Finance Digest: Re: A bad real estate deal Re: Help getting back on track RE: A bad real estate deal Re: Contributions to a Roth Conversion IRA Re: Dec 31 stock sale question Re: Roth conversion questions RE: A bad real estate deal RE: Help getting back on track SAVE ON YOUR PHONE BILL Money flow statistics on stocks a coupla things Re: A bad real estate deal a bad real estate deal HELP GETTING BACK ON TRACK Mortgage loan sharks :^) Money market account recommendations? 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, 06 Jan 1999 18:56:13 -0500 From: Jim McGrath Subject: Re: A bad real estate deal My guess is that your town assesses homes at 75% of market value. When you paid $104K for your home, you established its market value. An assessment establishes a base for tax collection. An appraisal will provide an estimate of market value. If my guess is right, the town now thinks your house is worth around $109K. Many real estate people will give a free appraisal in hopes of picking up future customers. Jim >We bought a condo (half a duplex) for $104K in 1993. The assessed value >immediately dropped to $78K. At the moment we owe $92K and it's assessed >at $82K. We have no plans to move, but what would happen if we did? If >we had to move for job reasons, for instance, and we sold for $82K, I >imagine we'd owe the bank $10K in cash? Which we don't have. If we >deeded the place to the bank, would that hurt our credit rating? > >- -- Nancy Slator, neslator@amherst.edu - - ------------------------------ Date: Wed, 6 Jan 1999 20:55:04 EST From: AINITGR8@aol.com Subject: Re: Help getting back on track First and foremost, you need to sit down and write EVERYTHING out. Creditor, full balance due, minimum monthly payment, how much you are behind, etc. Secondly, NO MATTER WHAT YOU THINK, you need to put 10% of EVERY SINGLE paycheck away into an emergency savings to help you when the unusuals pop up. You may insist that you can't afford to do that but I'll bet my salary you can. #1. Keep track of everything you spend, every single penny for 30 days. Do you eat out at lunch? Do you eat dinners out? What do you do for entertainment? How much are you spending each month on groceries? Etc. You can cut huge amounts out of your spending by simply cutting back or even cutting out meals out. Set yourself on a grocery budget. Spend a few extra minutes each week looking at the newspaper ads for sales at grocery stores. Make yourself live by this budget by putting cash in an envelope each month. You'll find that if its the 20th and you only have $40 left in the envelope, you begin to immediately assess what is necessary and what is not. Your spending can be curtailed in that area. If you are seriously in trouble, do you really need cable tv? Do you really need more the basic phone service? Gym club memberships, auto club memberships, consider selling any automobiles you are making payments on and purchasing something a little older without payments. It all depends on how seriously YOU want to get ahead. It's a long hard process but you can do it. Both my husband and I work full-time jobs and make considerably less than the national average. BUT, we have managed to cut our spending and live very comfortably. We have no credit card payments, no car payments, contribute over $7K/yr to our retirement and contribute 10% of each paycheck to emergency savings. We own 2 homes, with mortgages of course (we are currently working on fast paying these) and own 2 cars. We live in an area that is an average cost of living and make average pay. We are considerably farther along than others we know our age because we hunkered down early and decided what was important. (we are in our late 20's). We go on vacations once every 2 years, but get away for weekends by going camping or visiting friends in other areas. We have decided that finances will NOT dictate our lives. Besides, most people with "fancy" cars and homes have "fancy" debt along with it. We have the freedom to change jobs, move across the country, etc. And we have acted on that freedom. Anyway, you can do it! We did it! Yes it's hard and it sometimes still is. Just remember where you want to be and realize that it is VERY MUCH worth the "pain" now. NO PAIN, NO GAIN as they say! Christina - - ------------------------------ Date: Wed, 6 Jan 1999 20:57:39 EST From: AINITGR8@aol.com Subject: RE: A bad real estate deal Honestly, your best bet is to keep the home and rent it out if worse comes to worse. Even if you voluntarily give the property back it is still considered a foreclosure and a foreclosure is WORSE than bankruptcy on your credit record. Reputable lenders will lend to some with bankruptcy within 12 months of discharge, make that a MINIMUM of 48 months for a foreclosure. Christina Ethridge - - ------------------------------ Date: Wed, 6 Jan 1999 21:13:11 -0500 (EST) From: "L. Chen" Subject: Re: Contributions to a Roth Conversion IRA > >................... > >What are the pros and > >cons of making future contributions to my conversion acount? > > There are no cons. The change treats all Roth IRA accounts as a single entity > (just like all traditional IRA accounts are a single entity) and imposes > ordering rules on them (you are deemed to be withdrawing *contributions* > first, then *conversions*, then earnings, regardless of which account you take > money from). Let's say I 1. convert $10K to Roth in 1998 2. contributed $2K/yr in 1999 and 2000 to Roth 3. convert another $5K to Roth in 2000 4. Withdraw $15K in 2004 Would $14K or $15K of the withdrawal be tax-free? i.e. The clock for the 5yr penalty-free withdrawal for the 1998 conversion starts to run on 1/1/98. How about the conversion in 2000 -- 1/1/98 or 1/1/2000 ?? TIA Chen - - ------------------------------ Date: Wed, 6 Jan 1999 18:46:51 -0500 From: Rich Carreiro Subject: Re: Dec 31 stock sale question >I sold a stock on Dec 31, 1998. The order was executed on >the 31st anyway. Since we are operating in a T+3 environment, >the settlement date is in 1999 (Jan 6). Under which year >do I declare the gain for tax purposes? Trade date is what counts, not settlement date. So it was a 1998 transaction for tax purposes. Rich Carreiro rlcarr@animato.pn.com P5-100/RedHat Linux 4.2 - - ------------------------------ Date: Wed, 6 Jan 1999 18:49:13 -0500 From: Rich Carreiro Subject: Re: Roth conversion questions > What you are spreading over the 4 years is the taxable gains that >are included in your income. Example if your converted IRA had a gain of >$40000 Not quite. While the earnings in the IRA are certainly taxable, so are the contributions if you received a deduction for making them. If some of your contributions were non-deductible, you have to pro-rate them coming out. You do not pay a double tax on non-deductible contributions, but you can't take them out first. See Form 8606. Rich Carreiro rlcarr@animato.pn.com P5-100/RedHat Linux 4.2 - - ------------------------------ Date: Thu, 7 Jan 1999 06:56:10 -0600 From: "Sladek, John" Subject: RE: A bad real estate deal In reply to Nancy Slator's question about getting rid of a condo property that has declined in value, a friend of mine had a similar experience a few years ago. I'm afraid that letting the property go back to the bank might not be enough. Tha bank wants their loan amount. When my friend did this (let the bank foreclose), the bank then sued her for the difference (it was about $30,000). Since she was retired, she had to dip into savings to pay it off. And yes, she ended up with a bad credit rating. > Date: Sun, 03 Jan 1999 18:26:03 -0500 (EST) > From: Nancy Slator > Subject: A bad real estate deal > > We bought a condo (half a duplex) for $104K in 1993. The assessed value > immediately dropped to $78K. At the moment we owe $92K and it's assessed > at $82K. We have no plans to move, but what would happen if we did? If > we had to move for job reasons, for instance, and we sold for $82K, I > imagine we'd owe the bank $10K in cash? Which we don't have. If we > deeded the place to the bank, would that hurt our credit rating? > > - -- Nancy Slator, neslator@amherst.edu > > > - - ------------------------------ Date: Thu, 7 Jan 1999 08:15:46 -0500 From: "Porter, Jim R" Subject: RE: Help getting back on track >Date: Sun, 3 Jan 1999 13:07:16 -0800 >From: gillianmasters@juno.com (gillian m thomas) >Subject: Help getting back on track > >This has probably been covered numerous tmes, but I am new to the list >and I don't have web access to look at the archives. If anyone can tell >me how to access the archives by email (some lists you can), or direct me >to books or anything else that may help I'd appreciate it. > >During the last 4 years I have been living paycheck to paycheck. My >outstanding debts have not been paid and a few more have been added. >Everytime I start to make payments something comes up (kid gets sick, >husband loses job, etc...), and I seem to just kepp getting farther and >farther behind. > >I recently accepted a sizable raise and promotion, but we had to >relocate. My husband has not been able to a job here. And once again >when I thought I might be getting ahead, I'm going backwards. The move >wiped out our savings account. > >Any help on budgeting, saving money, etc..., would be greatly appreciated > >Gillian >gillianmasters@juno.com Gillian, I'm sure that the wiser members of this list will be offering more and better ideas than these. I can only pass on things I have heard many times that have worked for me and others. WIthout any more specific information, it's not possible to know where the right place to start is. Are you not able to pay your monthly bills? Are you using credit cards to make up the difference each month? Do you save any of your income at all? (savings account, 401(k) plan, whatever) Can you pay your monthly bills but have a large amount of debt that you are trying to reduce? Do you rent or have a mortgage? Do you have two car payments? Your strategies will be different depending on whether your income doesn't meet your day-to-day needs as opposed to being able to keep current but struggling to reduce what you owe. More info will surely bring better advice. But anyway... - -- Maybe your husband can work part-time, even if it is not in his chosen field, to bring in some extra income. If you can make it on your income today, use the part-time job's income to reduce debt. - -- If you have credit card debt at a high interest rate, focus on reducing it first. It's a killer. If you are prone to impulse spending, don't carry your credit cards with you and only pay cash. - -- Other list members may want to comment about the pros/cons of deciding whether to replenish an emergency fund first, or to reduce debt first. - -- Make sure you know where your money is going now. If you find that "the money just slips away", keep track of every penny you spend for a month or two so you at least are aware of your spending habits. - -- Do you and your husband share a similar philosophy on personal finance? It will be hard to establish and stick to a plan unless you both agree on it. - -- Don't be discouraged! You can do this. Provide a little more information and I'm sure you'll benefit from the advice the smarter members of the list will offer. Congratulations on your promotion. Jim Porter - - ------------------------------ Date: Thu, 7 Jan 1999 11:20:52 -0500 From: BOB FORD Subject: SAVE ON YOUR PHONE BILL If you want the advantages of an unlisted phone number but you don't want to pay a additional monthly charge on your phone bill, here is a simple way to do it. = Have the name in the directory listed as John Smith (assuming that your name is not John Smith). Any white pages has a lot of people named Smith so you "phone listing name" will be one of many. = You will not pay the monthly fee to the phone company for an unlisted number but you will not be found by anyone looking for your phone number. Charging you for NOT listing your number seems to me to be a ripoff. You are saving the phone company money by not having to print your number in all of their directories but they charge you for saving them money. BOB FORD BOB_FORD@COMPUSERVE.COM FAX 714-637-2955 = Editor of the 57-56-55 CHEVY LIST and TURBOGLIDE REGISTRY - - ------------------------------ Date: Thu, 7 Jan 1999 18:51:27 -0500 (EST) From: "L. Chen" Subject: Money flow statistics on stocks In Wall Street Journal, there is a table on the top 10 inflow/outflows. If the # is positive, it means there were more volume on the uptick trades; whereas a negative # means there is more volume on the downtick trades. But what does it mean in term of bullishness/bearishness for the stock? e.g. MCI Worldcom closed up on high volume on Wed., and the money flow is negative. It seems if people are buying heavily on downticks, there wouldn't be downticks in the first place; and people can sell too while the prices are going up. Anyway, would appreciate if one of you can explain how to interpret that table. TIA Chen - - ------------------------------ Date: Fri, 08 Jan 1999 09:36:00 -0500 From: Randy Barnes Subject: a coupla things > Subject: Even lots/odd lots? > > What are the disadvantages of buying odd lots? ...... > online brokers I use, DATEK and Discover Brokerage Direct. > > Scott L. Scott, I say go man. There are no disadvantages. Online trading offers a great way to buy a few shares cheap. Our investment club has been using Waterhouse and have made 14 odd-lot trades. All have been executed quick and no noticeable "bump" as they're almost always limit orders. Our little account has made us very happy with an IRR of over 84% in 1998. ( http://www.rbarnes.com/aaic.htm ) - -RB - ----- --- ---- > when I thought I might be getting ahead, I'm going backwards. The move > wiped out our savings account. > > Any help on budgeting, saving money, etc..., would be greatly appreciated > > Gillian I'm becoming a fan of bankruptcy. This sounds shocking at first, but you'll suffer the same or worse fate if you have multiple delinquencies, or CCCS. (Consumer Credit Counseling Service..see your phone book). You'll find it easy to buy/lease cars etc after a Chapter 7/13 filing, and after 2 years a mortgage is fairly easy, providing you "keep your nose clean", (re-establish credt and NEVER pay late!) A few years down the road you'll be miles ahead. If you want to tough it out, I admire you for it. You have only two options. More income or less outgo. Get hub to work immediately. If he's healthy there's $10 hr jobs everywhere. I know of a residential window washer making 80k. on $30 start-up costs. If this is not an option due to parenting etc. start slashing. Sell the car if it's worth more than 2k and get yourself a nice reliable 85 Camry like mine. (It refuses to breakdown and cost nothing to drive. I'll keep it forever.) Hopefull some ideas you find here will help you in some way. Lots of folks here are pulling for you and believe you'll be on a better track before you know it. Good to see you using a free email service. Use a PC somewhere and find a free internet connection. One of several is at http://www.netzero.com/ Then search for more money saing and income ideas. You go girl! ================================================ Randy Barnes, Helping Hand Technologies Get FREE Windows 98 web-based training at.. http://www.rbarnes.com ================================================ - - ------------------------------ Date: Fri, 08 Jan 1999 09:37:36 -0500 (EST) From: Nancy Slator Subject: Re: A bad real estate deal On Wed, 6 Jan 1999, Jim McGrath wrote: > My guess is that your town assesses homes at 75% of market value. Thanks for offering comfort, but I just checked with the assessor's office and in our state (Mass.) the assessment has to be the full value of the house. So we really do owe $10,000 more on the mortgage than the $82,000 it's assessed at. (And this is not a depressed market -- values are increasing again and the average house in this town costs twice what ours did.) I'm still looking for ideas on how we could offload this monster if we had to move. - -- Nancy Slator, neslator@amherst.edu - - ------------------------------ Date: Fri, 8 Jan 1999 11:02:16 -0500 From: BOB FORD Subject: a bad real estate deal >From: Nancy Slator >Subject: A bad real estate deal = >We bought a condo (half a duplex) for $104K in 1993. The >assessed value immediately dropped to $78K. At the moment >we owe $92K and it's assessed at $82K. We have no plans to >move, but what would happen if we did? If we had to move >for job reasons, for instance, and we sold for $82K, I imagine >we'd owe the bank $10K in cash? Which we don't have. If we >deeded the place to the bank, would that hurt our credit rating? >- -- Nancy Slator, neslator@amherst.edu = Nancy There is no easy answer for your problem. If you owe your mortgage lender $92,000, they will want $92,000 to settle the debt just like your or I would want the full amount of any debt we were owed. They might consent to a "short sale" (taking less than the amount owed) if you could give them a good reason why the should. About the only good reason is that it will cost them more money to dispose of the house if you give it back to them than letting you pay less than you owe on the mortgage. = However, please consider the tax consequences of a short sale. = You may get a 1099 from the lender for the difference of the amount owed and the amount they take to satisfy your debt. In your case it would be for $10,000. This must be added to your reported income and you must pay income taxes on this amount. If you give your house back to the lender, your credit rating would suffer. The way they look at it is that you owed $92,000 and you did not pay the amount owed. They will report that to the credit reporting agency. GOOD LUCK BOB FORD BOB_FORD@COMPUSERVE.COM - - ------------------------------ Date: Fri, 8 Jan 1999 11:02:14 -0500 From: BOB FORD Subject: HELP GETTING BACK ON TRACK >From: gillianmasters@juno.com (gillian m thomas) = >During the last 4 years I have been living paycheck to >paycheck. >SNIP > = >I recently accepted a sizable raise and promotion, but we had >to relocate. My husband has not been able to a job here. And >once again when I thought I might be getting ahead, I'm going >backwards. The move wiped out our savings account. > = >Any help on budgeting, saving money, etc..., would be greatly appreciated > = >Gillian >gillianmasters@juno.com = GILLIAN You may not like this answer but it is probably the only way you can get out of the hole you are in. You husband must get a job. = Very few families can survive today without the incomes of both parents. If your husband is unemployed, his full time job should be getting a job. GOOD LUCK BOB FORD - - ------------------------------ Date: Fri, 8 Jan 1999 09:50:09 -0700 From: "Jeff Salisbury" Subject: Mortgage loan sharks :^) Fellow Persfin'ers, Recently, I was chatting with a friend who is in the mortgage business. He was telling me how slimy some of the industry practices can be -- particularly the 125% mortgage. A couple of days ago, I spotted this comic strip: ftp://ftp.xmission.com/pub/users/m/mcjathan/canslim/125_percent_mortgage.gif True to life! Best Regards, Jeff - - ------------------------------ Date: Thu, 14 Jan 1999 09:00:49 -0600 From: "Robert R. Kalt" Subject: Money market account recommendations? Hi All, The interest rate on my money market account (not fund) has steadily declined and now is 3.13%. I am looking for a new FDIC insured account for my super safe money. Any ideas?? - -------------------thanx-----------------Bob-------------------------------- - - ------------------------------ End of persfin-digest V5 #79 **************************** - 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.