Getting Personal
In this edition of Getting Personal, Chris and Tess talk about lazy investing styles, lending to family, consolidating retirement accounts and foolproof investments.
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From New York City, NY, 08/20/2008
I was opening a Roth IRA and was looking at the client agreement from a major financial firm. One of the terms asked says "Securities in your account may be loaned to us or orthers." That seemed kind of odd; is that normal? Is that how short sales are done - by loaning the securities of other clients for short amount of times?
Thanks...Madhu
From Tulsa, OK, 08/18/2008
I am a homeowner in Tulsa, OK and would like to move to Jacksonville, Florida. Currently, I have no employment prospects but search limited because of current distance. The housing market in Tulsa is not as bad as in other markets. I feel confident that I can sell my house but will not get as much money from the sale as I would like to pay off about $15,000 credit card debt. I was thinking about selling and living in an apartment for a year to save money and pay down expenses. I can live in an apt for cheaper than housing expenses-no maintenance costs. I have reduced all of the housing expenses that I can. Does this plan sound logical? What additional things for me to consider can you offer?
From WA, 08/17/2008
I bought and remodeled a new house last spring. By the time I was done, the real estate market was flat, so I'm renting my old house until it picks up again. I own the old house free and clear. I have no debt other than the new house, but would like to put about another $30K into remodeling it. I've got one kid heading to college this fall and another in 2 years. I've got about $30K set aside for the kids' college. I'm 47 and would like to retire at age 55 (ha ha). I have my retirement plan, and one from my husband who passed away two years ago.
My question is: when I sell the old house, what is the best thing to do with the proceeds? Pay off the new house entirely? Pay it off partly and put the rest aside for something else? Don't pay off any of it and use the funds for...?
Thanks!
From ft pierce, FL, 08/17/2008
Want to know if it's a good idea to put a big chunk of our IRA into an IRA CD - 12 month. Currently, it's in a money market paying not even 1% through UBS. We each have about 50K in here. Broker says 4.25% is a silly thing to do because inflation will outdo any gains we make here. (frankly, I don't think there's anyway to outdo that anyway, but we hate to see the money just sitting there) I will leave my American Fund alone - that has about 30k and leans heavily into the market. We contribute the max to our IRA each year, I am 48, husband is 55, he is major earner. We are VERY VERY conservative and want nothing to do with risky investment at this point. I realize risk = gains, but we're not doing it. So, is the CD good for the interim? Thanks!!! We need to do SOMEthing!
From Palm City, FL, 08/12/2008
Greetings, My wife and I are thinking of selling our current house in order to buy one we would be more satisfied with. Problem is it is at most worth what we paid for it in 2004 and more likely a little bit less. We purchased for 400k and we have seen sales all around this price, some lower some higher. Question is, assuming we end up selling it for less than we purchased it for, would it be better to wait for the market to recover so we did not take a loss or just sell it for the loss and figure we will buy the next house at a lower price and it will all work out in the end? Does not feel right to sell for less than we paid. BTW, numbers are about 120k in equity and thus 280 in mortgage. Thanks for any advice.
From New Richmond, WI, 08/11/2008
I am contributing money into a 529 plan to save for my twin daughter's college education. I am invested in the Wisconsin Edvest plan because of the state tax write-off and lower fees. Can I roll my money to a different state's plan that allows for more options? Will I lose the state tax write-off? Could I have 529 accounts in multiple states concurrently?
Thanks!
From Tallahassee, FL, 08/09/2008
I am a novice to investing and want to take your advice and start an index fund tied to the stock market, not sure which index (Dow, S&P, etc.). I tried to find one by going to Morningstar but was overwhelmed with information and gave up. Is there an easy way to select such a fund? I think Vanguard had about a dozen or so index funds and I have no idea how to pick and choose.
Help!
Keith
From Independence, MO, 08/08/2008
I live in independence, Mo. and would like to buy a CD from Discover Bank in Greenwood, De. Where can I find out for sure that this is a legitimate bank and is it safe to do this kind of transaction over the internet?
Steve
From san francisco, CA, 08/05/2008
jp noble:
Page 7 of Vanguard's "plain-talk education about ETFs" gives an example of determining the minimum initial principal for efficient ETFs. Their example does not take into account the impact of other fees (sale commission & expense ratio) over time because they can vary widely between different ETF/mutual funds. These costs are an important determinant in final returns (true performance).
From South Orange, NJ, 08/05/2008
I am installing a dual-fuel boiler in my house to escape the high cost of fuel oil this winter. I just received a credit card offer for balance transfers without a transfer fee and no interest for 15 months. I was thinking of putting the cost of the boiler (which is $18,000) on an existing card, then transferring the balance to the new card and paying it off interest-free over the 15-month period. I have excellent credit and my concern is whether this would have an adverse impact on my credit score, since I have no debt other than the mortgage on my house, and have never carried a balance on a credit card. Is my concern valid?
From Rochester, MN, 08/05/2008
After calculating the Roth IRA phase out limit, do my wife and I both get to put in this amount or do we each only get to put in half? For example, if our phase-out limit is $3,500, can we actually contribute $7,000 as a couple?
Also, does the $15,500 401(k) max include employer match
From Santa Cruz, CA, 08/05/2008
What is a better option for health insurance. If you use your employee's insurance as your primary insurance and your spouse's as a secondary insurance or is it better to use a Flexible Spending account?
From Santa Cruz, CA, 08/05/2008
I have some additional questions regarding last weekend's show about loaning money to a family memeber to help buy a home. If your family member loans you money to buy a house at a market interest rate, can you write the interest paid off your taxes? Also, if you are a first time home buyer will you still get the 'first time' home buyer credit?
From Clarkston, MI, 08/04/2008
I'm 60 and retired after 25 years in management with one of the "big 3" US car companies. My 401k is losing ground to the tune of 10%/year, and is now worth $143K. I have $36K in a savings account at Chase Bank, a house appraised last month at $243K. The economy here in MI is really going south. My financial advisor at Chase wants me to roll my 401k over into two accounts: $50K into a managed fund and the rest into an account with Pacific Life that guarantees 5%/year in interest. Is this a good idea?
Bob
From omaha, NE, 08/03/2008
I am 50 yrs old--married-female-combined income less than 50K/yr--I am self employed-I contribute $25/wk into a 401k set up thru edw jones..balance around $12k--yeah only $12...too little too late??? is there anything I can do not to have to work until I die...
From Raleigh, NC, 08/03/2008
I have a T-bill purchased through Wachovia. They insist I must have a brokerage account to which they put the matured T-bill and interest. This is also my checking account. Is my checking/brokerage account covered by FDIC? Wachovia's version of dealing with customers is truthiness not truth.
From new york, NY, 08/03/2008
Is there a threshold amount of money that one should start a portfolio with? I'm thinking about investing in ETFs, but didn't know if there's a principal amount below which fees (either inside the fund or charged by the custodian) will make investing inefficient.
From Gladwin, MI, 08/03/2008
I have just come in to some money from an estate (20,000) I want to put half on the house payment to get that paid but I am not sure where to put the rest. Should I save it for taxes on the money or should I invest it somewhere?
I see Countrywide has 4.1% CD for 7 months. What can you advise me? Thanks.
From VT, 08/02/2008
I purchased a whole life policy 15 years ago. It was paid up with dividends covering premiums until this year when the dividends were reduced. I now am being asked to make two large payments in the next to years which are supposed to eliminate future premiums. I am 66. Does it make sense to continue with this policy not knowing if dividends will change again and the cycle repeated? If I have sufficient investments etc, does it make sense to have a whole life policy. I could take the accumulated cash and get a term policy instead. Suggestions?
From Columbia, MD, 08/02/2008
The last caller on your 8/2/08 show asked Chris Farrell about managed funds. Chris missed the opportunity to inform the caller that, on average, actively managed funds do not outperform index funds anywhere near enough to pay back the higher management fees they charge.
From Columbia, MD, 08/02/2008
The last caller on your 8/2/08 show asked Chris Farrell about managed funds. Chris missed the opportunity to inform the caller that, on average, actively managed funds do not outperform index funds anywhere near enough to pay back the higher management fees they charge.
From vienna, VA, 08/02/2008
I cannot understand why financial advisers always say to leave you money in the market. I have taken my money out of the market and put it in CDs twice in my career. Once prior to the .com crash and the next time prior to the housing crash that we are currently experiencing. Why was my view of the market wrong? Why is the fact that I was wise enough to know what does not work in the economy and pull my funds out, wrong? I just can't see it and neither can my balance; untouched by both falls in the market and much larger as a result. If you look out into the world and say to yourself, "this will never work." Isn't that a good time to protect your nest egg? How many people today can say that they are making six percent. I'll bet it is not very many. Most have lost loads of money and are now making two percent. It just makes no sense to me. Sure there are a few funds that have done well. None of which were funds where we had money, nor were they easy to predict. A CD was a much better bet and represented a "market timing" decision.
From Tallahassee, FL, 08/02/2008
I will be retired in 3 1/2 years, at which point my defined benefits plan will pay out approximately 1/3 of my current salary. I will have about $1 million in investments (fairly well diversified). To reduce the potential for erosion due to falling stock prices I would like to know what you think of selling those investments and putting the money into federal treasury notes? I know there will be a tax hit but if I do it when my income is reduced by 2/3 it might not be that bad. Your thoughts?
From Park Rapids, MN, 08/02/2008
Want to retire: what advice? We have little soc.sec. self-employed,kids done. Assets in biz R.E. total 500,000 (in N.Mn that's alot)& home about 5-600,000;Annuity 50K, IRA 50K inheret-
ance soon 500,000. Don't trust brokers.
Ages 56(F)58(M) good health. Comments?
From Troy, MI, 08/01/2008
I have $75K which I would like to "park" in an interest earning method highest possible) which I can access in case of emergency. I am retired, in the $80K annual income range. Thanks!
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