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Jewish World Review Jan. 31, 2002 / 18 Shevat, 5762

Bruce Williams

Bruce Williams
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Consumer Reports


Multi-level marketing; Are correspondence courses worth it?


http://www.NewsAndOpinion.com -- DEAR BRUCE: What's the deal with correspondence courses that advertise "nationally accredited" diplomas on TV? Do businesses actually acknowledge them, or is the whole thing a big scam? -- W.D., via e-mail

DEAR W.D.: There are many distance-learning schools that are held in high regard. A lot of people have been trained at home to raise their skill levels, and there are accredited colleges that offer college degrees that can be earned entirely or almost entirely through the mail or via the Internet. There are also schools that do little more than rip off the public. Consult the U.S. Department of Education Web site (http://www.ed.gov/Technology/distance.html) for more information about alternative learning programs.

DEAR BRUCE: I plan to retire in 17 years at age 55. I earn $70,000 gross, and my wife earns $7,000 at her part-time job. My company matches my 401(k) up to 6 percent. Which would make more sense -- to invest the maximum of 15 percent in the 401(k) and take the tax savings now, or to put the money into a Roth IRA and have tax savings later? -- S.M., via e-mail

DEAR S.M.: While there are conditions for you to collect early, generally speaking, you cannot pull your money out of the Roth until age 59-1/2, and your target is age 55. It would be wise for you to sit down with your accountant and work out precisely how the additional money -- probably about $1,000 a year in tax savings versus Roth IRA after-tax amount yields of $4,000 from last year and $6,000 this year -- will yield later on. You will have to assume some rate of return and apply it to both sides of the equation.

Obviously, if your earnings increase substantially, you would be better off with the Roth IRA because no matter how large this money grows, taxes are not a consideration. If the money grows inside a tax-deferred account, the tax consequences must be considered. There is no cut-and-dried answer to this question. It's a personal decision, and there is no "correct" course of action.

DEAR BRUCE: My son is 30 years old and about to get involved in a multi-level marketing endeavor. What I can do to convince him that a many of these are a waste of time and money? -- M.B., Providence, R.I.

DEAR M.B.: The attrition rate in multi-level marketing is enormous. There are a few people who stick it out and manage to recruit successful people below them and make a great deal of money. Most fall away after they have made the initial purchase. There are two litmus tests that I would apply: 1) Is the emphasis on recruitment, rather then selling? If that's the case, then I would opt out; and 2) Is a substantial amount of money required upfront? If it's a matter of only a couple of hundred dollars, and your son can afford to lose this much, it may be a good lesson. If, however, he is required to invest thousands of dollars, I would do my best to discourage him unless there is a reasonable way to recapture this money other than by selling. Company guarantees aren't worth a whole lot because the companies may very well not be there when it's time to honor that guarantee.



Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).

Up

01/30/02: Avoiding estate taxes; debt consolidation
01/25/02: Deal with firing head on
01/24/02: Drop collision coverage on older cars
01/21/02: Leveraging equity in real estate; about using equity in rental
01/17/02: Consider Roth for grandchildren; "throwing money away on renting;" make dealership honor their sticker?
01/15/02: How much down payment for car?
01/10/02: Rate jumps when account closed; when you go over the maximum allowable income for a Roth IRA
01/09/02: Air fare 'bargains'; changes to 'living trust'
01/07/02: Insurance for long-term care
01/04/02: Renting to college children; buy or rent house for newlywed?
01/03/02: Gift certificate about to expire; we were never billed
12/31/01: Cashing in 401(k) is bad idea; fed up with shipping charges
12/27/01: For young people to borrow cheap money to invest is a wise idea; traveling with pets
12/24/01: New or used car -- which is better?
12/21/01: Keeping accounts separate; buying a home after foreclosure on credit record bankruptcy
12/19/01: Is refinancing best?
12/17/01: Long-term health insurance
12/14/01: Using home equity to buy car
12/12/01: Roth IRA's are good idea
12/10/01: When bankruptcy is an option
12/07/01: Reverse mortgages boon for seniors
12/06/01: When to drop collision coverage; deductible and nonreimbursed expenses in condos
12/05/01: Use broker to move retirement fund; a lawyer to refinance home and check the papers?
11/30/01: Joint ownership of CDs; sick spouses
11/28/01: Refinancing student loan possible
11/26/01: Gift or loan?; Stick with penny stocks?; How much of a premium should I negotiate above my regular stateside wage?
11/19/01: Replacing oil tank; Why am I penalized for bettering myself?
11/16/01: An RV is quite a different breed of cat; Keep or sell old car?
11/14/01: Wife's name left off deed; tax-deferred interest in your case certainly has an upside?
11/12/01: Appraising stamp collection; financial advisor changes his mo; an enforceable loan to a son?
11/08/01: IRAs for needy children; Sell or become a landlord?
11/05/01: Advice for seniors; when fighting over a will isn't worth it
11/02/01: Giving money to grandchildren; condo tax write-off
10/31/01: Example of air travel safety; renting as a waste of money; defaulting on a credit card
10/26/01: Is unused credit a bad thing?
10/24/01: The mysterious safe-deposit key
10/22/01: Options available for 401(k)s
10/19/01: Use caution with viaticals
10/18/01: 403(b)s; Whole life or term insurance?
10/15/01: Getting your credit report; Private Mortgage Insurance ; Are those ads on TV about help with IRS debt legitimate?
10/11/01: Good time to buy?
10/08/01: Annuity a poor decision
10/04/01: Taxes on game shows; contractor and mechanics liens
10/01/01: 'Bridge' loan explained
09/26/01: Friend has good deal
09/24/01: Consider the franchise option
09/17/01: Single vs. multi-family rental
09/14/01: Buy house or invest?; Universal insurance v. a mutual fund?
09/12/01: Safe investment, modest return
09/10/01: CD yields little return
09/07/01: Sending funds overseas
09/06/01: Contracts v. mortgages; What is a nice nest egg?
09/04/01: Senior likes entering contests
08/31/01: Rental property return
08/23/01: House too large for widow
08/22/01: Second thoughts about gift; Why should I have to pay for a sewer line that I neither want nor can afford?
08/20/01: Consider used cars over new; outsource billing; careless mechanics
08/16/01: Investing an inheritance
08/14/01: Government grant availability
08/13/01: Roth IRAs for education
08/08/01: Refinancing small mortgages
08/06/01: Bi-weekly mortgage payments?
08/02/01: Refinancing dilemma
07/31/01: Annuity advice; living trusts
07/30/01: Helping kids save money
07/27/01: Down payment or retirement?
07/24/01: Law suit "buy-out"; lease or buy vehicle?
07/19/01: 401(k) concern at age 70
07/18/01: Spouse responsible for debt
07/16/01: Refinancing to get investment money
07/12/01: Renting in retirement communities
07/10/01: Refinancing mobile home advice; why single house rentals are generally a poor investment; how determine if income is decent in condo
07/06/01: Property burned on day insurance issued; paralegals and wills
07/03/01: Converting stamps to cash
06/29/01: Puppy swindle; buying v. renting; too goods
06/27/01: Keeping an older car; dad's dead and he left everything to mom; brokers and "captive agents"
06/25/01: What's a reverse mortgage?
06/22/01: Bonds for college a bad bet; debt consolidation loans
06/20/01: Guidelines for refinancing your home
06/18/01: Keep or sell rental property?; 27-year loans; turning 401(k) into a Roth IRA
06/15/01: Investor worries about stock loss
06/11/01: Second marriage wills
06/07/01: Title insurance on new home; loan against primary residence; shares and class action lawsuits
06/05/01: Must we have a real estate lawyer? Fences make .... trouble
06/04/01: Ring no longer needed; "cherry pickers"
06/01/01: Dad responsible for son's damage
05/31/01: Avoid will kits
05/30/01: Where there's a will ...
05/25/01: Best way to pay for remodeling
05/23/01: Medicaid took my mother's home
05/21/01: Trouble with undeclared tips; Cheaper to rent than own?!
05/18/01: Construction and cash; qualifications for rates for first-time home buyers
05/16/01: Salesman or financial adviser? What is a title policy and how does it work?
05/11/01: Gift money for children
05/10/01: Advice for seniors
05/08/01: Investing 101
05/07/01: Should I rent my house out?
05/03/01: Retired citizen wants to pay off mortgage; boyfriend/girlfriend accounts
05/01/01: Roth Educational Account explained; recouping losses
04/25/01: Parent wants to invest
04/24/01: Mortgage lengths; my granny has hefty credit card debt
04/23/01: What is PMI and how can I get rid of it?; Credit card account services
04/19/01: When to incorporate; you may be breaking up my marriage
04/18/01: I'm an heir to an additional monthly income , but it's becoming a tax burden
04/17/01: False promises to clear bad credit
04/13/01: Back-to-back ticketing dilemma
04/12/01: Using home equity to buy a car
04/10/01: Sister wants Mom's house
04/05/01: Should I pay or stay?
04/04/01: How should we invest $40,000?
04/03/01: Size
03/30/01: I want to be a real estate agent; surviving siblings stocks
03/27/01: Seeking financial literacy
03/20/01: Pay off the credit card?
03/15/01: Just wait 'til you sell...
03/13/01: They're trying to give me a better car; I'm not filing
03/12/01: Timeshares not worth your time
03/09/01: Your tax protection is maxed-out; ealry birds and audits
03/08/01: How old is too old for a Roth?; laws on landlords investing your money
03/07/01: New job, old 401(k); buy v. leasing car
03/05/01: Basement swimming, anyone?
02/27/01: Don't take mommy's money!; livid at landscaper
02/26/01: Teach your daughter to be responsible
02/22/01: Go get a(nother) job; Change a traditional IRA to a Roth IRA?
02/21/01: Stocks buy a 'piece of America'; everyone needs at least $1 million worth of liability insurance
02/20/01: No hassles bring low return; 'repo' houses
02/15/01: Term insurance on what terms?
02/13/01: Must I charge tax? Can dotted property line stop us from building on our land?
02/12/01: Picking the 'best' lawyer
02/08/01: Who has the best mortgage rates?
02/05/01: No life insurance to cover a loan; notch babies and social security; avoiding paying a lot of tax on severance pay
02/02/01: Life insurance for regular people?
01/31/01: Debt free
01/29/01: A house divided; I won the jackpot --- but the IRS took the winnings
01/24/01: Sons as landlords
01/23/01: Pitfalls of buying land; cleaning up a financial mess
01/22/01: Aiming for partnership; Have investments in the child's name?
01/19/01: Roths and young people
01/17/01: Home-sellers must disclose; IRS can still get you --- even after a divorce
01/15/01: Advice on buying a business
01/11/01: Credit cards and 401Ks
01/09/01: Power of Attorney questioned
01/08/01: An 8-year-old unpaid bill
01/04/01: Accidents where the victim is responsible; health club heartache; laptop lunacy
01/03/01: Towing a new car; Must reveal my insurer's name?
12/28/00: Paying off a mortgage; Borrow yourself to prosperity?
12/26/00: My dad won't make a will
12/22/00: Most work-at-home offers cater to fools; trust deed investments
12/20/00: Your son needs tough love
12/18/00: Time to move on
12/14/00: Should we move retirement account?
12/13/00: U.S. notes can be the answer
12/08/00: Series EE, I, EE, I, Oh!
12/07/00: Paying mortgage twice a month instead of once
12/05/00: IRA vs. 401(k) investing; "gofer" gripes
12/01/00: Those credit card "checks"; non-compete agreements
11/30/00: Dumped by insurers when I did nothing wrong
11/27/00: Collision insurance is a waste?
11/23/00: Rent our house or sell it?
11/21/00: Fixed or adjustable rate?
11/20/00: Debt consolidation requires discipline
11/16/00: Ten-year fixed-rate mortgages
11/15/00: Higher interest means higher risk
11/10/00: Maybe a mobile home
11/09/00: At 21, save for today and tomorrow
11/08/00: Can I shelter my severance pay?
11/06/00: I don't wanna save for retirement!
11/03/00: Getting your money back is enough
10/31/00: Employment ads that make you pay
10/27/00: Reader takes on Bruce
10/26/00: Tell your kids to 'get real'
10/25/00: Don't pay 'the rascals'
10/23/00: Mickey Mouse tax steps
10/18/00: Economizing is not always wise
10/17/00: Young investors should start a Roth IRA
10/13/00: Maybe your prices are too low
10/12/00: Dealing with underground home oil tanks
10/11/00: Go with simple interest!
10/05/00: When property is worth more than the home
10/04/00: Put part of windfall in a Roth
10/03/00: Not paying taxes on interest from house sale
09/28/00: Protection by Medicaid and Medicare
09/27/00: Refinancing home without alerting crooks
09/26/00: Base investments on trust
09/25/00: Do we really need a will?
09/21/00: She took off with the car
09/20/00: Diversify your financial advisers?
09/18/00: How to inherit a house
09/15/00: The tax scoop on student loans
09/14/00: House buying only for the young?
09/13/00: No reason to give credit
09/11/00: Must I pay for my gifted child's college tuition?
09/08/00: We got bitten on purchase of dog
09/06/00: Pools can soak you
08/28/00: When the insurance company has an 'out'
08/25/00: When to buy a home
08/24/00: More 'interest' to live on
08/22/00: Paying for private school
08/18/00: Don't make huge down payments
08/16/00: IRAs for people with pensions
08/15/00: She doesn't deserve a break
08/11/00: Her shopping will ruin us
Yes, a contract means something
08/10/00: Her shopping will ruin us
08/09/00: A $1,500 car ... for $3,000
08/04/00: Time to take on the airlines
08/02/00: How can I retire at 62?
08/01/00: Cash in your savings bonds
07/28/00: Hold onto a mortgage under 7 percent
07/26/00: I want my partner to buy me out
07/25/00: Negotiate with your neighbor
07/21/00: How can I finally start saving soundly?
07/20/00: Where's my prize?
07/18/00: Getting out of an upside-down loan
07/13/00: Death is no escape
07/12/00: Multiplying dollars
07/10/00: Making sense of retirement investing
07/07/00: 'Bankruptcy does follow us around'
07/06/00: In which state should I file my income tax?
07/03/00: When to diversify assets
06/30/00: I'm buying my dad's house
06/29/00: How social security seniors should invest
06/27/00: Waiting before re-establishing credit
06/21/00: Insuring an older car
06/19/00: Take the money and run!
06/16/00: Utility company incursion
06/15/00: Insurance settlement is no bargain
06/13/00: A straightforward form of bankruptcy
06/08/00: In the computer's clutches
06/07/00: The trouble with tenants
06/05/00: Do I really need title insurance?
06/01/00: The truth about nursing home insurance
05/30/00: Keep mother-daughter loan simple
05/25/00: CDs for security, not investment
05/24/00: Battling with collection agency
05/22/00: Are callable CDs a waste of time?
05/18/00: Building a college fund
05/16/00: Even death brings no relief
05/15/00: House is 'worth' what's offered
05/12/00: Borrow from Mom and Dad?
05/11/00: Your heirs, your choice
05/09/00: Mutual-fund investigations
05/05/00: Credit cards vs. debit cards
05/04/00: Lawyer are good for something
05/03/00: The binding nature of contracts
05/02/00: You know you are in trouble when ...
05/01/00: Can primary residence be rented out?
04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
04/24/00: Beware of errors in your favor
04/18/00: $10,000 limit on gifts
04/17/00: Invest or repay student loans?
04/13/00: Beware of Internet auctions
04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

©1999, NEA