Jewish World Review April 6, 2000 / 1 Nissan, 5760
Don't be cheap on insurance
DEAR BRUCE: I recently realized that having replacement-cost homeowner insurance may not be appropriate for a home furnished with antiques and lots of collectibles. I know that you can get riders on insurance for jewelry and furs, but is there a policy that covers lifestyle without having to insure individual items? -- D.S., Topeka, Kan.
DEAR D.S.: I don't think so. Your homeowner's policy will have a strict limitation per item. Non-paper collectibles are relatively inexpensive to insure, however everything over $2,500 would have to be itemized.
If you have a house full of antiques and collectible items and you do not carry the extra insurance, you stand to lose a great deal.
DEAR BRUCE: Do you believe that a variable life insurance policy is a good investment for retirement? This is called variable comp life and is like whole life insurance but the insurer may borrow against it. My life insurance agent claims that the policy averages 8.6 percent a year. Furthermore, I must pay almost 1 percent on any withdrawal of the policy. -- J.F., Illinois
DEAR J.F.: It would not be my choice of an investment. First of all, I would be very disappointed with a return under 9 percent a year. Further, having to pay a fee for withdrawing would be something that I would not be comfortable with.
I don't look at insurance as an investment. I think it should be called "death insurance," and as a consequence, I would buy the least expensive insurance I could find that would provide monies in the event of my death.
DEAR BRUCE: I overheard a woman say that she bought a run-down, repossessed house at auction for $500 down. The backyard had weeds as tall as she was, but after five years of sweat, she sold the house for quite a profit.
We are interested in pursuing a similar situation. How do we get started? Is this possible? -- L.D., Loomis, Calif.
DEAR L.D.: There are all manner of stories of how people have done just as you have described. Generally speaking, we fail to track down whether the story was about someone's friend or a friend of a friend of a friend. Writing books about pursuing the so called "fixer-uppers" has become a cottage industry. As a consequence, while they were relatively simple to find 25 years ago, the pond is now pretty well fished out.
That doesn't mean that from time to time you won't find a beat-up house that is structurally sound in a nice neighborhood, but it will take diligent looking. If you see a house that's really beat up in a nice neighborhood with no for-sale sign, find out who owns it. Perhaps you can make an offer. But the days of just sailing out and picking up a handyman special and making a ton of money are behind us in most parts of the
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).
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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
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11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
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10/20/99: Love, honor -- and separate credit
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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)?
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08/25/99: Educational IRAs must be spent on education
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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...