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Jewish World Review April 19, 2001 / 26 Nissan, 5761

Bruce Williams

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Consumer Reports


When to incorporate; you may be breaking up my marriage


http://www.jewishworldreview.com -- DEAR BRUCE: I am working on two projects: One is a restaurant that I want to open next year, and the other is a coffee table book. Should I start a corporation to run the cost of these projects through, or should I continue incurring the cost on my own? -- K.R., Orlando, Fla.

DEAR K.R.: Those are certainly diverse projects, and unless you have unlimited funds and time, you might wish to concentrate on one and then the other. Until one of your projects generates income, I think you can just absorb the costs and declare these on your regular taxes. When there is an income flow, however, you might be better served by forming a sub-chapter S or an LLC. You certainly are ambitious. Good luck with your projects.

DEAR BRUCE: My son is 26 years old, and he would like to buy an old four-unit apartment building. His approach is that this property will appreciate and then he can have his rental income in addition to the appreciation. I don't believe it to be that simple. I understand that you have a book on real estate. Could you tell me what it is? -- L.C., via email

DEAR L.C.: The name of the book is "House Smart," and it can be ordered by It would be nice if your son's belief that "real estate property appreciates" was always true, but it is not. There is money to be made in buying property such as you have described, fixing it up yourself, and then selling it and moving on. However, this not a no-brainer. Money can be, and is, lost on these types of investments every day. As long as your son understands that property does not always appreciate and that it can depreciate too, I wish him well in his endeavors.

DEAR BRUCE: You may be breaking up my marriage. My husband says that you have continually said that people like me have to control their spending habits. I'm 24 years old and have been married for six months. We have no children, no mortgage -- in short, no nothing. I can't see any reason why I have to be watching every dime before I spend it.

When our credit-card statement came a few days ago, my husband went ballistic. I had spent a little over $1,000 on clothes. I earn almost $20,000 a year, so what's wrong with spending $1,000 on something that I need? My husband has informed me that unless I change my ways, he is going to take all of my credit cards away and cut them up.

If you think that I'm going to put up with a tyrant like this, you're crazy. I figure that now is the time for us to enjoy life, and if we spend a little extra money, so what? I think big mouths like you ought to remember what it was like to be young. We will have a whole lifetime to watch our pennies. -- B.T., Cleveland

DEAR B.T.: You have got to be kidding! You sound like a spoiled adolescent. What your husband is saying is that you have to live within your means. You have a very modest earning capacity, demonstrated by the salary that you mentioned, and without someone like your husband, you would be like many of my callers and readers who have run up huge credit-card bills and now want someone to bail them out. You are fortunate to have a mature husband. I don't envy him in helping you grow up, but you need someone to stand over you until you can think and act like an adult.



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

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...

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