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Jewish World Review March 16, 2000 / 6 Adar II, 5760

Bruce Williams

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How to buy government bonds


http://www.jewishworldreview.com -- DEAR BRUCE: We are interested in buying United States government bonds directly from the government. If we must purchase them from a broker or a bank, how safe are they? -- T.B., Jesup, Iowa

DEAR T.B: The bonds carry the full faith of the United States government without regard to where they were purchased. If you wish to buy bonds in the secondary market, you will have to deal with a broker. If you wish to buy new issues, you will need to contact the nearest Federal Reserve Bank and they can tell you precisely what to do. It is not a complicated process.

DEAR BRUCE: In the mid-'80s I purchased 5,000 shares of stock for $1 per share from a private firm. I still hold the certificate. I have never received any kind of reports on the company. I did contact the owners several years ago and was told the company was still in business and had not gone bankrupt. I expect to get the same answer again, if and when I can find them. Is there some way for me to force the owner to file a financial status report? -- R.M., York, Pa.

DEAR R.M.: The chance of your penny stock having any great value today is very, very slim. The chance of locating the owner should not be so slim.

Each corporation is required to have a registered agent on whom papers can be served and other contacts that are needed can be made. Call your Secretary of States office and ask for the registered agent for this corporation. If there is none, they have either broken the law or have gone away. If they have gone bankrupt, get proof of this bankruptcy and you should then at least be able to claim the $5,000 loss.

DEAR BRUCE: I have a 6.75-percent loan with a 10-percent to 11-percent equity in my home. I am paying a $65 per month premium for private mortgage insurance (PMI) until I have a 20-percent equity. It seems like common sense that I should pay down the house until the PMI is no longer an issue and then make the minimum loan payment. Am I missing something?

I do agree that I would be far better off to take a mortgage and invest the money, but I fear I am paying a lot for the PMI. -- R.M. (e-mail)

DEAR R.M.: The missing ingredient here is how much is your home worth? We know that we are talking about 10 percent of the value of the home, but how does that relate to the $65 a month? If it's a billion-dollar home, clearly you have the bargain of the year. If it's a $50,000 home, you have a very, very bad situation.

I agree that, ordinarily, you want to get your equity up to 20 percent, but even then it is sometimes cheaper to spend the money for your "hired gun co-signer" (the PMI insurance company) if the spread is large enough.



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

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...

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