Archive for the ‘Finance’ Category
Just Ask
The out-of-control spin ignited by Bev’s recent disastrous diagnoses of debilitating diseases – breast and spinal cancer and ALS – has become a bit more manageable because of some welcome experiences with care, comfort and support personnel and organizations we’ve encountered who have taught us to ask.
Our first major eye-opener occurred when we were faced with a thousands-of-dollars-a-month chemotherapy medication the oncologist prescribed. We said we just can’t afford that much. A patient advocate on staff called us in and asked for a copy of last year’s income-tax return. A few days later we were notified the medication would be provided for us – FREE. The staffer told us to just ask for her whenever we feel the need for some support, whether it’s economic or emotional.
Then, during our first appearance at the ALS doctor’s regular clinic, monitoring tests were conducted by several medical experts and we also met with an ALS organization volunteer. A few days later, a delivery man dropped by with toilet support bars (which he installed for us) and a transport wheelchair.
“They’re on loan until you’re through with them,” he said. “If there’s anything else you need, just ask.”
While there is no stopping the disease chewing away at her nerve cells, these are just a couple of the several events that are making Bev’s life more comfortable by simply asking.
When Times Get Tough, Get Tougher
By Cecil Scaglione
Mature Life Features
Answers to all the economic arguments lead to a definite “Maybe.” Are we still in a recession, or is it a depression? Are we moving out of one or both? Is a massive inflation-driven Fed-fed stock-market crash stumbling over the horizon?
Retailers claim consumer buying is down. Home prices are rising. The number of added jobs announced each month are proclaimed by politicians to be encouraging but the unemployment rate remains static while hiring has dropped.
So it’s time to take things into your own hands, especially if you’re in the 40-plus age bracket and have been forced out a job by layoffs, downsizing, economic cutbacks or whatever the definition given for your severance. Instead of the harrowing hunt for a regular paycheck, you might look into providing a service that the downsized companies still need.
Corporate America has learned it can get along with fewer employees, thanks to the rocketing development of computer and telecommunications technologies. At the same time, younger workers are more transient and no longer join a firm with plans to stay on the job until they retire with the proverbial gold watch. So what does all this mean to you?
It’s the era of the free-lancer, the small-business operator, the sole proprietor, the entrepreneur. While companies large and small have discovered they don’t need such a large work force as has been traditionally assumed, it doesn’t mean they don’t need the same level of production or service. Companies still need packages delivered, bills paid, machines and equipment maintained, inventory controlled, accounting kept up to date, marketing counsel, management consulting, employee training and on and on and on, that can be, and is being, provided by outside vendors.
And, as outside vendors make more money devoting their time to business, they, too, become buyers of other services, such as babysitting, landscaping, animal-care, catering and many others. So take advantage of it.
It’s as simple as renting out your address for mail delivery. It costs you nothing and the people who pay the fee come around to pick it up. If you want to make more money, you can offer to deliver the mail for a fee. You can house- or pet-sit for people who have to go out of town to work, or go on vacation. If you speak other languages — German, for example — you can earn money as a guide to tourists who visit your area from foreign lands: in this case, Germany. A foreign tongue also can make you money as a courtroom translator.
If you decide to go into business and be your own boss, there is one rule to adopt: this is a business. It isn’t a hobby or a part-time job. However, you can turn that hobby or part-time job into a full-time business.
Always look professional. One colleague, a marketing consultant who works out of an office at home, never leaves the house without wearing a shirt and tie, even if he’s just going to the post office or the nearest copy-machine center. Another home-office acquaintance controls her time by locking up her “office” at quitting time and not going back into it when she’s not working.
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Loan to Family Member Is Money Down the Drain
By Cecil Scaglione
Mature Life Features
Neither a family borrower nor a family lender be, to paraphrase Shakespeare.
The Bard also wrote that lending money to a friend is an excellent means of losing both your friend and your money.
With family, you lose your money but you’re still stuck with the relative. It’s been estimated that as much as $65 billion is outstanding between family and friends.
Before you dig into your pockets to bail out a relative, ask yourself a few questions. First of all, do you need the money? If you do, how are you going to be able to go after it when your relative shows no sign of repaying you? If the borrower-to-be has a history of overextended credit cards, late rental payments, or job-hopping, what makes you think you’re going to get your money back?
What’s the money going to be used for? If the loan will enable a family member to complete a college education or help elderly parents keep their home, you might give the matter serious thought. But making a loan to a grandson and his wife so they can splurge on an anniversary cruise or to a daughter who collects race horses makes much less sense.
Parents have another concern. Lending to one child may spark jealousy in your other
children.
Family and financial experts agree on one major point: worse than the loss of money in any of
these person-to-person transactions is the rupture of the relationship. Putting things in writing can avoid some of the personal pitfalls.
Lender and borrower should agree upon and write down the amount of the loan, interest rate, and payment schedule. It’s a good idea to have the signing of the loan document witnessed or notarized. If you need to run it by an attorney, do so.
If a family member or friend who approaches you for a loan doesn’t want anything in writing, you can explain you need it for tax purposes in case you’re audited, that your accountant or tax preparer requires it.
When you do make a loan, charge some interest because the Internal Revenue Service will assume the loan earns interest and will expect you to declare that as income. And it’s up to you to record every payment made as well as giving the borrower a receipt each time.
It’s a financial transaction so treat it as such. If the person making the request for money doesn’t see it that way, you can suggest bluntly that if he or she wants charity, ask for it.
Incidentally, these suggestions also apply to coworkers, colleagues, neighbors, and anyone else who’s going to be around you for any length of time.
Mature Life Features, Copyright 2004
If the Best Things in Life …
… are free,
how come I’m always broke?
— Cecil Scaglione
Mature Life Features
Con Artists As Dangerous as Mugger with a Gun
By Cecil Scaglione
Mature Life Features
Con artists feed on the greedy and the careless. And also on the polite. Folks continue to give out numbers for their bank accounts, credit cards, and Social Security just because a caller has requested them.
The unseen solicitor poses as a fraud investigator looking into charges have been made against your credit card and offers to repair your account. He or she will ask to verify your numbers and address and other such information.
Ask for a phone number so you can call them back. Then hang up, whether they give you a number or not. Don’t be polite. They’re crooks trying to steal your money. Call the local Better Business Bureau and tell them about the call.
If you’re concerned about your credit-card account, call the phone number on the back of the card to discuss the
matter with a company representative.
The ubiquitous cell phone with a camera has become a weapon these thieves are using more and more. They use telephone camera to take photos of credit cards. That gives them your name,account number and expiration date — enough to run out and clean out your account. So don’t leave your card laying on a counter at the store or table at a restaurant.
Never let the card out of your sight. Crooked employees can swipe your card through a scanner to
copy the magnetic strip.
The expanding use of the Internet has widened the horizon for these crooks exponentially. Never
send any information over the ‘Net, unless you’ve initiated the contact with a reputable mail-order house you’ve dealt with regularly, such as Land’s End, or if you’re ordering something from an e-mail house, such as e-Bay or Amazon.
Don’t be fooled by an Internet website that looks official. Scammers can set up an official looking page and have your responses diverted to their own e-mailbox and merrily milk your funds. The Web also is a great marketplace for crooks selling bogus products described as healthful supplements and medical devices.
The old standby scams are still around, like the lottery and Nigerian schemes. The first involves a contact that says you’ve won money in a lottery and all you have to do to get your money is wire funds to cover tariffs and attorney fees because the money is originating from abroad. One Southern California resident was bilked out of more than $250,000 by these schemers not too long ago. The Nigerian plotters have a variety of stories that are all designed to break your bank. there for a bit and they’ll give you a handsome fee.
Then there’s this tried-and-true con. You receive a gaudy piece of mail or an “invitation” that says you’ve won a rather hefty gift or a tempting vacation trip, for example. All you have to do is send a few hundred dollars to expedite the paper work.
Chuck it in the paper shredder. If you don’t have one, get one. They’re inexpensive and can be used to shred all paper that carries sensitive and financial information: statements from your bank, credit-card companies, brokerage firm, and mortgage company.
Watch out for gift checks you receive in the mail. A neighbor cashed in small such check — it was for less than $10 — from a company she had dealt with and learned in her next statement that, by cashing the check, she signed on to pay a monthly fee for a travel service the company provided. She didn’t need any such service since she works for an airline but the firm said by cashing the check, she was automatically signed on, and that was that.
Remember the gilded rule: if something sounds too good to be true, it usually is.
Mature Life Features, Copyright 2004
Test Your Financial IQ
By Cecil Scaglione
Mature Life Features
A fun question posed not too long ago by Kiplinger’s Personal Finance is a quick test of your economics erudition.
It asked how big a check you think you would get if you chose the cash option after winning a lottery jackpot of $100 million but had to split it with another person who also had the winning lottery number.
After cutting the winnings in half and choosing a one-time cash payment, you would get a check
of about $20 million, according to the magazine.
By taking the one-time payout instead of payments over 30 years, the prize amount is whittled
down by the principle known as the ‘time value of money” using a formula comparing the worth of today’s dollar against $1 three decades from now.
This cuts your half-share ($50 million) of the lottery winnings to about $27 million. The Internal
Revenue Service claims about a quarter of that right off the top. And then there are layers of other state and federal taxes to cut through before being able to tote your final take to the bank. However, investing a $20 million windfall into tax-free investments isn’t such a terrible financial fate.
Another question dealt with this quandary: should a woman remarry after her husband of several decades has died and give up his Social Security survivor’s benefits based on his hefty earnings history?
It depends how old you are. If you’re 60 years or older, you can remarry and collect benefits based on your deceased spouse’s record.
Mature Life Features, Copyright February 2004
Saving a Buck Here and There Adds Up
By Cecil Scaglione
Mature Life Features
Every so often, Kiplinger’s Personal Finance magazine publishes lists of such need-to-know topics as how to keep more cash, invest $1,000, or retire as a millionaire without having $1 million. Among the most prevalent pieces of advice is how to get out of debt. You start by paying off all credit cards and then shopping around for cards with lower interest rates. You might consider a no-points home-equity line of credit to pay off those cards and then pay off the loan, which should be at a much lower interest rate than the credit-card debt.
Opportunities to save around the house are legion: switch to flourescent light bulbs, turn down the thermostat on your water heater, unplug that old refrigerator in the basement or garage, and install low-water-use shower heads and faucets. You can make a buck or two by holding an on-line yard sale.
Review your insurance premiums. Get rid of mortgage insurance if you don’t need it. Shop around to see if consolidating your auto and property coverage will cut down on premium costs.
Clip coupons for shopping and buy store brands as well as generic drugs. You can save a lot of money by buying a used car rather than new one. The higher the price of a new car, the more you save on a used model.
Also add to your assets by consolidating your investment portfolio to avoid multiple management fees. Tax breaks are available in the form of medical expenses, charitable donations, and mileage deduction for volunteer work. Don’t forget to deduct business expenses if you do any type of work or business out of your home. This includes phone bills, dues for professional memberships, and subscriptions, stationery, computer equipment, and postage.
Bear markets are an excellent time to make investments because stock prices are low. Lean times are good times to fatten your portfolio. Remember the first rule of business and investing: buy low, sell high. You also can invest small amounts of cash in items that you think might appreciate – wine, Persian rugs, or other collectibles-to-be.
Consider investing some time and money expert economic advice. Have a financial planner review your investments and prepare an opinion for you on which direction you should follow.
Mature Life Features, Copyright 2003
Who Do You Trust With Your Trust?
By Cecil Scaglione
Mature Life Features
Finding one or more trustees for your trust presents both emotional and economic problems. If you haven’t begun your search yet, start now.
Do you want someone in the family to handle all the responsibilities and conditions outlined in the trust that you, and your spouse and your attorney agonized over? Or do you feel more comfortable putting all this work in the hands of an impersonal professional?
Trusts are merely tools to help you with taxes and planning for the distribution of your estate. The costs and fees for preparing and managing a trust vary widely. So shop around.
Talk to an attorney. He or she will probably prepare the trust with you. You can name the attorney a trustee if you both agree. More likely, you will name one or two friends or family members as the main trustees. Some financial experts suggest you name an “outsider” as a backup trustee. This can be your attorney, a brokerage firm, your financial consultant, a mutual fund, or your bank. Banks still handle a major share of trust-account assets in the nation. This role reaches back to the days when customers and trust officers in community banks knew each other and established life-long relationships.
There should be provisions in your trust to replace a trustee who may become too expensive or who doesn’t perform his or her job according to the terms of the document. There also should be provisions allowing you or the beneficiaries of the trust to move to another state.
The trustee(s) you name can hire their own experts to help manage the trust. These duties include the responsibility of distributing the assets to beneficiaries, investing assets according to instructions in the trust, filing tax returns, and any other paper work.
Most institutions set the minimum trust size they will handle at $250,000. Those that accept smaller accounts may pool them together or invest them in mutual funds. The usual annual management cost is 1 per cent of the assets in the trust, although fees have been reported as high as 2 percent. The larger the account, the lower the percentage charged in most cases.
Before you begin shopping around for an institutional trustee, discuss the matter with your attorney, accountant, people you know who have appointed such trustees, and with the individuals you have named or plan to name as trustees of your assets.
Mature Life Features, Copyright 2003
Shop for your Retirement
By Cecil Scaglione
Mature Life Features
Instead of saving for your retirement, go shopping — for an income plan, that is.
Saving has such an onerous connotation to many of us. We think it requires discipline and deprives us of the immediate use of all the money we work so hard for. The notion of buying your retirement might ease the pain of the process, suggests the Financial Planning Association.
You’re going to shop a 401(k), individual retirement account, tax-deferred fixed annuity or some other plan that best for you. The money you put into that investment will be used for delayed purchases of groceries, vacations, medical treatment, family cars, insurance, clothing — everything you shop for and buy now. “Think of it as buying something on the lay-away plan,” said FPA member and San Diego certified financial planner Andrew Castiglione.
Act like your taking a trip to the Retirement Planning Mall. When you head to the megastores looking for a television set or refrigerator or winter jacket, you have an idea of what you want or need. Your study the colors and qualities of several models on your shopping trip, narrow down your choices, and finally make your purchase. Shop the same way for your retirement.
Do you want one with plenty of travel time or lots of hobbies? Are visits to your grandchildren high on the list of desired features? Are you thinking of moving or working part time? What medical-treatment options do you have in mind? It’s just like buying a TV set, in a way. You may not be able to afford the latest 60-inch flat-screen entertainment center and have to settle for a 32-inch model.
So you may not be able to afford a dream retirement, but you can avoid facing a nightmare if you shop as early as possible. Like, right now if you haven’t done it yet.
A retirement lifestyle that reflects your working-life standard of living will cost about 75 percent of the income you earn during your career, according to the FPA. Social Security and your company pension plan will cover part of that, but that’s not likely to cover it all. To get the best bang for your buck, buy your retirement plan as early as possible.
Mature Life Features, Copyright 2003
Frugality Firms Fiscal Muscles
By Cecil Scaglione, Mature Life Features
There’s a myth perpetuated in the saying “If you have to ask how much it costs, you can’t afford it.”
Nonsense. Even the wealthiest nabobs want to know the price of a product or service they’re buying. It doesn’t mean they won’t spend the money. They just want to know what value or return they’re getting for their money. That’s one reason they have money. They keep an eye on it.
Most people don’t know how much money they have in their pockets or purses. Even more have no idea how much credit they have on their cards. Those who know how much credit remains on their credit cards at any particular moment are pretty well nonexistent.
How do they expect to win at any financial game, which is measured in dollars, when they don’t even know the score? There are some simple economic exercises you can take to become fiscally fit.
For one thing, you can look at your credit cards to determine how much total credit you have. Then subtract your credit-card debt against that total find out how much credit you have left. And keep a running account of your available credit.
Then see how much money you have in your checking account. And in your savings account. Did you know what the totals were before looking? You shouldn’t have had to check. You should have known before looking.
If you didn’t know any of the above figures, it’s like playing a game of baseball, football, hockey, golf, you name it, and never knowing the score. How can you expect t be a winner?
Now count the money in your pocket or purse. Did you know how much you had? Put the change in a piggy bank, cigar box or whatever is handy. Never spend pocket change you carry home. It can accumulate and become a handy pool for spending for birthday or Christmas gifts.
All this is aimed at making you take account of every penny you spend. Do you leave the television set running while you take a shower? Or while you’re out cutting the lawn? Do you switch off the light when you leave a room? Why do you have two lights on in the same room? All this costs money that you can save by simply flicking a switch.
And it turns the spotlight on your money game.
Another exercise is the simple one your mother probably taught you: “gluing” the final small sliver of soap to a new bar. You can cut down the amount of laundry soap usage around the house if you wear those pair of casual jeans one day longer than you had planned. Same with that fleece vest.
These moves of economy stretch out to other areas. Why spend big bucks on movies when you can watch them on the Internet at home eating much cheaper popcorn? The same with pulling in books from cyberspace.
These simple moves should leave you with a clearer picture of what the money game is all about and lead you to more powerful exercises to help boost your financial fortunes.
Mature Life Features, Copyright 2003
