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November 2007
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January 2008

Should I Sell My Structured Settlement?

Jim, three years ago I received a structured settlement from a lawsuit due to a work related injury. I am now back to work and I receive $1,000 per month and will continue to for 10 years. I am considering selling my settlement payments to receive a lump sum, is this a good idea? Many people that are receiving monthly payments from structured settlements consider selling them for a one time lump sum payment. There are numerous companies in the business of buying these settlements. Be prepared to accept much less than the total of your future payments. For example,... Read more →


I Am Considering Investing In An Index Fund, Is This A Good Idea?

An Index Mutual Fund is designed to mirror the movement of its underlying index. Probably the most popular type of index fund is those that follow the S&P 500. The primary benefit to employing an index fund is the ability to put your investments on “auto pilot”. There are many different types of index funds, but the S&P 500 is the most popular. Many proponents of the “Buy and Hold” approach to investing suggest that index funds are the best way to invest. In support of their argument, they correctly point out that S&P 500 index funds (and many others)... Read more →


What Do You Think About (Multi-Level) Network Marketing?

Generally, I am not a proponent of network marketing companies. These companies face many challenges, which is why virtually all go under in about two years after they start. The first problem is that they have to sell a product at a competitive price while still building in enough money to pay generous commissions to their sales representatives. This is very difficult to do in the age of Wal-Mart and the Internet. Today, margins on retail products are slimmer than ever. The network marketing company of today has to typically pay a commission to several layers of its agents on... Read more →


What Is Your Opinion of Reverse Mortgages?

Many people are surprised when I tell them that I think reverse mortgages are a great option for people in retirement. Too many retirees today are living without enough money to enjoy their retirement, and some without the funds to even cover their medical needs. For those with a home that is substantially paid off (at least 50% equity), the value of their home may be the key to a better retirement. The concept of reverse mortgages is very confusing, but need not be. A great book on this subject is Reverse Mortgages for Dummies. A reverse mortgage allows individuals... Read more →


Can You Explain The New Law That Reduces The Taxes On People In Foreclosure?

President Bush signed into law this week a “tax cut” for people in foreclosure. Under the prior law, if your house was foreclosed and sold for less than the mortgage balance, you would have to declare that amount as income! Yes, I know it is hard to imagine, but this was the law. The concept is based on the principle that the mortgage companies loss had to be declared as a gain by the person to whom the loss was attributed. For example, if you owed $200,000 on your mortgage and ended up in foreclosure and the auction of your... Read more →


Do I Need A Will, A Trust, Or Both?

We start with the premise that everyone needs a Last Will and Testament, properly prepared by an attorney in the state where you live. I do not recommend using a Will kit or online substitute. As I have said in my seminars, you can’t come back from the grave to correct mistakes you made in your Will. A family with children needs a Will, most importantly to establish a successor guardian for the minor children. If a tragedy were to happen, you want to be sure that your children are going to be raised by the individual you have selected... Read more →


What Can I Do If The Credit Bureau Refuses To Remove Incorrect Information From My File?

OK, you have followed all of my advice, written letters of dispute to the credit bureau and still no results? Well, now I will share with you how to go to war with them. The first thing you want to do is to be sure you have worked on the issue both at the credit bureau and with the creditor as well. Generally, the credit bureau will remove or update an item if the creditor agrees. So, at the root of most credit disputes is the original creditor. I suggest first challenging the item with the credit bureau, since this... Read more →


Do I Need To Carry Life Insurance On My Children?

I am not an advocate for substantial life insurance policies on children. If we go back to my premise that life insurance should be used primarily as a mechanism to replace lost income, children are not good candidates for life insurance. I do suggest carrying small life insurances policies (less than $10,000) on a child to cover the cost of a funeral if a tragedy were to happen. In my case, the way I have done this is through an add on to my own life insurance policy. Ask your life insurance provider about adding small policies (known as “riders’)... Read more →


I Am Being Told That The Credit Scores I Bought From An Online Credit Report Service Are Not My Real Scores, Is This True?

Believe it or not, but those expensive online credit report services are not giving you your real credit scores. In Fact, they even have a special name for the fake credit scores they provide, educational scores. I learned this about three years ago in my mortgage business when on occasion clients would bring in their own credit report to compare it against the one I had. This usually happened when my credit scores were lower than the scores that the client had obtained on their own. We have found that the scores being sold from the online services are almost... Read more →


I Have a Timeshare That I Don't Want, A Company Is Offering To Try and Sell It, But They Want $500 Up Front, Is This A Scam?

I do not recommend paying up front money to have your timeshare listed for sale. Most of these timeshare listing companies do not sell many timeshares and make their money through the up front fees. The problem with selling a timeshare is that there is virtually no secondary market for them. In fact, many charities will not even accept a timeshare as a donation! It is one of those classic commodities that is sold and not bought. People buy timeshares after ending up on a tour usually connected to a free gift they were offered. Believe me, no one goes... Read more →


Based On Everything Happening With Real Estate Right Now I Am Considering Renting For A Few Years, What Do You Think?

While I have historically been an advocate of homeownership, I am not really sure where I stand on that today. Due to the current crisis in the housing market, there are many parts of the country where rent is so cheap that it makes no sense at all to buy. For example, in my own local market there are 3,000 square foot homes near the ocean renting for $1,200. To buy a home like this would require a payment of $3,000 per month or more. Even with the tax benefits associated with owning a home, renting is still a better... Read more →


We Are Buying Our 16 Year Old A Car, Should We Put Her Name Or Ours On The Title?

I have received this question many times and I wish there was a perfect answer. Of course, there is no greater control over a teenager than to have the authority to take away their car, but having your name on the title can be very risky. In the event of an accident, the driver and the owner of the vehicle can be sued. By putting the title of the car in your child’s name, it would be difficult for you to end up being sued if they were at fault in an accident. There are still some legal theories upon... Read more →


What Are Some End Of Year Tax Strategies That I Should Be Working On?

Typical strategies for end of year tax planning are based on maximizing deductions for the current year and deferring income into the next year. Some common examples include making charitable contributions prior to year end. This includes donations of money as well as donations in kind. Perhaps this would be a good time to clean out your garage and make a donation of your unused household items or that old car that you don’t need. Pay your mortgage payment due in January the last day or two of December, since mortgage interest is deductible in the year it was paid.... Read more →


What Is Umbrella Liability Insurance and Do I Need It?

Comprehensive personal liability insurance (CPL), also known as umbrella liability, provides a method for individuals to carry additional liability coverage to protect against liabilities that may exceed the coverage limits on homeowners and auto insurance. The term umbrella liability is used to describe the concept of an umbrella of liability protection over an individual (that extends beyond the auto and homeowner policies). We are all familiar with the liability coverage we purchase for our vehicles and our homes, a CPL simply stacks additional coverage above and beyond those limits. As an example, if you have a maximum of $500,000 in... Read more →


My Disagreements About Money With My Husband Are Leading To The End of My Marriage, Any Advice?

Jim, I thought I had a good marriage and we seem to get along about most things except money. We constantly disagree about money and we are at a point where the word divorce is starting to come up, any advice? I have received this question many times over the years and it is a tough one. What I have learned in talking with couples that have disagreements over money is that they do not have a financial plan. If both spouses sit down with a financial planner or financial counselor and come to an agreement on a plan, there... Read more →